Artificial entry barriers in business include strategic actions by incumbent firms designed to discourage or prevent potential entrants. Examples include predatory pricing, exclusive agreements with suppliers or distributors, and heavy upfront investment in advertising and customer acquisition. Natural entry barriers, on the other hand, arise from the inherent characteristics of the industry. Examples include high setup and R&D costs, network effects, and ownership or control of key resources. For instance, in industries with high fixed costs like utilities or airlines, the high cost of infrastructure can be a significant barrier to entry. Similarly, in technology industries, network effects can create a barrier where the value of the product or service increases with the number of users, making it difficult for new entrants to compete.
How do you pass market entry barriers? What do you need to know about market barriers to have a soli...
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