Barriers to entry

Examples of Barriers to entry in the following topics:

• The Prevalence of Small Businesses

  • If you're going to start a business, it's important to realize that there are specific forces acting upon each industry that affect profit.
  • The point here is that barriers to entry are central factors in determining the feasibility of the average business owner entering a given industry.
  • This is a smaller barrier to entry, thus there are more SMBs in the restaurant industry than in the aerospace industry.
  • The 80% of SMBs that reside in the service-providing sector is largely a reflection of the overall U.S. economy (services over goods), as well as the greater feasibility of service industries for small-scale entry.
  • In a global economy, manufacturing goods competitively involves being able to do so in high volumes in order to remain cost efficient.

• Small Businesses and U.S. Jobs

  • It has fluctuated slightly in response to economic conditions, declining slightly when the economy is doing well and increasing when the economy struggles.
  • By addressing a need left unmet or innovating more rapidly than large multinational corporations, small businesses are able to carve out new niches for themselves.
  • Recent advancements in technology can reduce the amount of capital needed to start a small business and increase opportunities to scale up rapidly and cost efficiently.
  • While different industries display differing degrees of entry barriers, most small businesses must obtain a certain amount of capital to begin operations.
  • Discuss the growth of small businesses in relation to the U.S. economy

• Selling to Consumers

  • Its origins can be traced to online retailing (or e-tailing).
  • B2C e-commerce also reduces market entry barriers since the cost of putting up and maintaining a website is much cheaper than installing a "brick-and-mortar" structure for a firm.
  • Another form of e-commerce involving selling to consumers is known as consumer-to-consumer (C2C).
  • Peer-to-peer systems, such as the Napster model (a protocol for sharing files between users used by chat forums similar to IRC) and other file exchange and later money exchange models
  • B2C e-commerce makes up a smaller portion of the market share of e-commerce compared to B2B, and appears to be shrinking in comparison.

• Cultural Barriers

  • It is typically more difficult to do business in a foreign country than in one's home country due to cultural barriers.
  • People from different cultures find it hard to communicate not only due to language barriers but also because of cultural differences.
  • In a survey of Texas agricultural exporting firms, Hollon (1989) found that from a firm management perspective, the initial entry into export markets was significantly more difficult than either the handling of ongoing export activities or the consideration of expansion to new export product lines or markets.
  • Two of these items, market entry and transaction complexity, remained problematic in ongoing operations and in new product market expansion.
  • Explain how cultural differences can pose as barriers to international business

• Economics

  • Another negative aspect of trade barriers is that it would cause a limited choice of products and, therefore, would force customers to pay higher prices and accept inferior quality.
  • Tariffs, quotas, and non-tariff barriers lead too few of the economy's resources being used to produce tradeable goods.
  • An export subsidy can also be used to give an advantage to a domestic producer over a foreign producer.
  • In contrast to tariffs, export subsidies lead to an over allocation of the economy's resources to the production of tradeable goods.
  • Generally, governments impose barriers to protect domestic industry or to "punish" a trading partner.

• Technological Barriers

  • Standards-related trade measures, known in WTO parlance as technical barriers to trade play a critical role in shaping global trade.
  • As tariff barriers to industrial and agricultural trade have fallen, standards-related measures of this kind have emerged as a key concern.
  • But when standards-related measures are outdated, overly burdensome, discriminatory, or otherwise inappropriate, these measures can reduce competition, stifle innovation, and create unnecessary technical barriers to trade.
  • These standards-related trade measures, known in World Trade Organization (WTO) parlance as "technical barriers to trade," play a critical role in shaping the flow of global trade.
  • But standards-related measures that are non-transparent, discriminatory, or otherwise unwarranted can act as significant barriers to U.S. trade.

• The Argument Against Barriers

  • Trade barriers, such as taxes on food imports or subsidies for farmers in developed economies, lead to overproduction and dumping on world markets, thus lowering prices and hurting poor-country farmers.
  • Tariffs also tend to be anti-poor, with low rates for raw commodities and high rates for labor-intensive processed goods.
  • If international trade is economically enriching, imposing barriers to such exchanges will prevent the nation from fully realizing the economic gains from trade and must reduce welfare.
  • Protection of import-competing industries with tariffs, quotas, and non-tariff barriers can lead to an over-allocation of the nation's scarce resources in the protected sectors and an under-allocation of resources in the unprotected tradeable goods industries.
  • Therefore, the ultimate economic cost of the trade barrier is not a transfer of well-being between sectors, but a permanent net loss to the whole economy arising from the barriers distortion toward the less efficient the use of the economy's scarce resources.

• Reducing Barriers and Promoting Healthy Conversations

  • Language barrier: Language barrier is another important factor in business communication, if communication happens without a common language, it is not worthwhile.
  • The remedy is to stick to the point, use clear and concise messages that are easy to understand.
  • Language Barrier: language barrier is another important factor in business communication.
  • Healthy communications are possible once barriers are reduced .
  • Discuss how to overcome the top six reasons for communication barriers in business

• Reasons to avoid international markets

  • The biggest barrier to entering foreign markets is seen to be a fear by these companies that their products are not marketable overseas, and a consequent preoccupation with the domestic market.
  • The following points were highlighted by the findings in the previously mentioned study by Barker and Kaynak, who listed the most important barriers: (S.

• Common Markets

  • A common market is the first stage towards a single market and may be limited initially to a free trade area.
  • Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community (EC) to reflect that it covered a wider range of policy.
  • A common market is a first stage towards a single market and may be limited initially to a free trade area with relatively free movement of capital and of services, but not so advanced in reduction of the rest of the trade barriers.
  • Upon the entry into force of the Maastricht Treaty in 1993, the EEC was renamed the European Community (EC) to reflect that it covered a wider range of policy.
  • However, France faced some setbacks due to its war with Algeria.