Examples Flashcards
Examples Of Barriers To Entry
Economies Of Scale for other firms (Large Firms dominate with lower costs per unit, allowing for them to charge low prices that new entrants cannot compete with)
High Capital Requirements - Industries such as auto manufacturing require massive upfront investment, in factory plants and production machines, that can be difficult to obtain
Control of key resources e.g existing firms hoarding raw materials make it difficult and more expensive for new entrants for firms to obtain these raw materials
Predatory Pricing (temporarily reducing prices to drive out new entrants)
Switching Costs (consumers may struggle to switch)
Examples Of Barriers To Exit
Regulatory and Environmental Costs - Factory Plant Decommissioning
Long Term Contracts
High Sunk Costs (Machinery) makes exiting costly
Examples Of Typical Costs (PHYSICAL BUSINESS)
- High Rent Costs
- Staff Wages
- Utilities (heating, electricity, water)
- Inventory Costs
- Marketing Costs
- Equipment Costs
Examples Of Typical Costs (ONLINE BUSINESS)
Website Hosting and Domain Costs
E-Commerce Platform Fees and Payment Processing Costs
Digital Marketing Costs
Storage Costs
