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Essay / Research Paper Abstract
This 4 page paper examines entry threats. First, the concept is defined. Then two industries are discussed : contracting such as plumbing or electricity, and real estate. Bibliography lists 3 sources.
Page Count:
4 pages (~225 words per page)
File: RT13_SA420ent.rtf
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Unformatted sample text from the term paper:
will need to be professional doctors, nurses and so forth. There are many entry threats inclusive of government regulation and it would take a great deal of money to foster
such a business. On the other hand, one can open a house painting business by creating business cards and invoices and the only overhead necessary is perhaps a truck and
some paint. There is little expertise involved nor training needed. Clearly, the prospect of opening a health care facility poses a great deal more entry threats than does a new
painting business. Entry threats do vary from industry to industry. In some they are high and in other businesses, threats are low. First, what are entry threats?
The possibility that new companies may enter a market poses a threat and affects the competition and theoretically, when a firm can enter or exit a market and if
free entry and exit is possible, then profits will be nominal ("Porters," 2004). The reality is that industries embrace characteristics that tend to protect high profit levels of companies
in the market as well as to inhibit additional rivals from market entry and these are considered to be barriers to entry (2004). Any restriction creates a barrier. Government regulation,
patents needed, assets as well as other things, all create barriers (2004). Easy entry occurs when technology is in common, there is little brand franchise, there is access to distribution
channels and a low scale threshold, but it is difficult to enter if there is the necessity of patented or proprietary knowledge, a restriction in distribution channels and difficulty
in brand switching as well as a high scale threshold (2004). A trade business such as plumbing or electricity seems to have many entry threats, but the real estate
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