Question

Suppose that you are an entrepreneur. Pick a specific industry (in which there is a dominant firm that is profitable) into which you would like to enter. What entry-barriers do you see? What post-entry response do you anticipate, if you nevertheless decide to enter the industry?

Answer 1

The entry barriers I am going to experience will have decided to penetrate into any industry are as whenever I follows:

1) Barriers to entry : the dominant firm won't allow me to share his market willingly. So from an entrepreneur's perspective I am facing hard time to get my own market share.

2) Cost effectiveness: the dominant firm will enjoy the economies of scale so he can charge little bit lower price. But as a new entrant, it will be difficult for me to reduce and enjoy economies of scale.

3) Popularity : it takes sometimes a decade to create popularity of brand. So I need to work on my popularity.

4) Product differentiation : we need to differentiate our products to create our market share.

5) Start up costs: generally the start up costs wipe away the short run profits of the entrepreneurs. So they need to be vigilant to curb their costs as much as possible.

If I have decided to enter into the industry after facing so many barriers Then I need to maintain the followings

1)I may have to enter into price war. As the dominant firm will like to reduce the existing price depending on his economies of scale

2) I should have a very good team to take any undue pressure

3) I have to employ the latest technology to upgrade the quality

4) Last but not the least I have to ensure consumer satisfaction.