BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A high threat of new entrants makes an industry less attractive – there are low barriers to entry. Therefore, new competitors are able to easily enter into the industry, compete with existing firms, and take market share.

Detailed explanation-2: -Governments often create regulations that protect particular firms, industries, and occupations from would-be competitors. These regulations are referred to as “barriers to entry” because they keep some from entering into a market.

Detailed explanation-3: -Common barriers to entry include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs. Other barriers include the need for new companies to obtain licenses or regulatory clearance before operation.

Detailed explanation-4: -Licenses and permits are another government granted barrier to entry. These are usually issued by the government to maintain quality, but reduce the level of competition at the same time. As a result, new businesses or individuals will find it hard to enter.

Detailed explanation-5: -High Threat of Entry of New Competitors When: Brand names are not well-known. Initial capital investment is low. Consumer switching costs are low. Accessing distribution channels is easy.