Barriers to Entry Flashcards
What are Barriers to Entry?
The costs, or other obstacles that prevent, deter, new competitors from easily entering the market.
What are the 3 types of Barriers to Entry?
Legal Barriers
Set-Up Costs
Brand Loyalty
Expertise
Location
Availability of Information
What are Legal Barriers?
Businesses may be required to obtain licenses from the Government.
What are Set-Up Costs?
The initial costs of setting up a business before starting trading.
What are some examples of Set-Up costs?
Premises, Marketing, Capital Expenditure and Purchases of Inventory.
What is Brand Loyalty?
Building an established market.
What is Expertise?
Expert skill or knowledge in a particular field.
What is Location?
Where the business is in a a particular place or position.
What is Availability of Information?
Increasing levels of competition by preparing information.
