2056671
Description
Mind Map by Sandra Reed, updated more than 1 year ago
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Created by Sandra Reed
almost 10 years ago
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Industry Rivalry - Threat of new
entrants
- Threat of new entrants
- Economies of scale: New competitors
usually achieve at the beginning a lower
sales volume than incumbents, and thus
have a cost disadvantage if economies of
scale play a role in the industry
- Absolute cost advantages: learning curve
based on proprietary products,
proprietary cost-effective design, secure
access to essential inputs (raw materials)
- Product differentiation often
increases customer loyalty,
which is the reason why it is
more difficult for new
competitors to attract customers
- Capital Requirements: A high need for
investment, for example for research and
development, production, infrastructure or for
marketing. It only allows financially strong
companies to enter the market. Moreover, the
high investment requirements increases the risk
for market entry, causing it to be less attractive
- Switching costs for customers
supplier changing reduces
their willingness to change
- Access to distribution channels: When key
distribution channels bound or occupied, a new
competitor has poor sales opportunities
- Expected reactions of
established competitors
- State influence: State restrictions,
requirements and regulations and
subsidies can impede market entry or lead
to disadvantages for new competitors
- Economies of scale: New competitors
usually achieve at the beginning a lower
sales volume than incumbents, and thus
have a cost disadvantage if economies of
scale play a role in the industry
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