If, after reading this article, you are still struggling to identify the barriers to entry for your company, please contact us. Together, we will determine which factors are most threatening to your company and advise you on how to overcome them in the most effective way.The environment is one of the biggest barriers to entry in many markets. Environmental barriers are often social or political market barriers related to regulation. High environmental costs, such as fees for emissions, use of natural resources or disposal of waste, can be difficult for new companies to bear, especially when competitors already benefit from economies of scale.
New businesses may also face resistance from residents or community organizations if their activities threaten health or the environment. This can lead to backlash and resistance to market entry. Solutions to overcoming environmental barriers may lie in sourcing alternative sources of raw materials and energy, using more efficient technologies, and investing in research and development. Businesses may also consider collaborating with existing businesses or organizations to gain support in accessing resources and addressing environmental issues.
Competitive market barriers
This barrier to entry is directly caused by the presence of existing operators (a person already performing a function, a position) with a strong market position, which gives them an advantage over new entrants, for example through greater distribution opportunities, economies of scale , reduced production costs, brand recognition and image, favourable access to raw materials, logistics centres in strategic areas or improved relations with suppliers.
The solution may be to launch a new and innovative offering or to focus on a niche market that is not served by existing companies or is not sufficiently well served. This way, you can avoid direct competition and focus on delivering value to your customers.
Is it worth overcoming barriers to entry?
Given that there are so many barriers to entry, is it worth starting your own business and is there any chance of winning this “battle”? There are no simple answers to this question, but surely every prospective entrepreneur should be aware of their existence and take them into account when creating their company strategy to analyse whether their business will be profitable. It is also important to note that the higher the barriers to entry, the lower the competition and, conversely, the lower the barriers to entry, the higher the competition. Therefore, high barriers imply high risk, but also greater opportunities for growth and more profit. Regardless of the type of business we are going to run in the future, the decision to start one must be well thought out and supported by a thorough analysis of the possible obstacles and how to overcome them.