5. Entry barriers to markets
… obstacles that have an impact on the chances of
the enterprise to gain a foothold in the market - the
first real condition for success. Entry barriers vary
over time and across industries.
Barriers have not necessarily been raised as a
protection against new ventures - but may be
inherent to an industry or a cluster of enterprises.
6. Entry barriers type A: Customer access
• Without customer access there is no business
7.
8. Entry barriers type B: Customer
acceptance
• Customer access is a necessary, but not always
sufficient condition for conquering market
shares
• you should not underestimate performance,
functional and design attributes, production
costs and hence price because they are
important acceptance promoting elements
9.
10. • Economies of scale
The diminishing unit cost as a function of volume
per time unit. Large scale operations protect
against invaders who will, initially, be short of
volume
• Experience curve
Declining unit costs as a function of learning
through the accumulated production during the
overall life of the product class.
Experience curve advantages constitute an
effective price barrier which is rarely overcome
by competing head-on.
11. • System ties
are not just a matter of being able to guarantee
interoperability and persistence (proprietary standards)
and assure the customer that no unforeseen
consequences, disruptions or other factors will happen
to the existing routines. System ties also occur by way
of workflows and procedures that have to be changed
if new concepts are introduced.
• Transaction costs
part of the price and so constitute a barrier to
customer acceptance. 3 Cs: Contact, Contract and
Control
12. • Product differentiation
Differentiation may entail a physical as well as a
perception dimension, and in many industries it works
as an effective blocking mechanism against
entrepreneurial ventures.
In industries with a high degree of product
differentiation suppliers have apparently understood
the value of effective segmentation and positioning.
• Compatibility
a supply or a product will seamlessly fit into a
customer's activities and processes
13. • References
• The newcomer enterprise may attempt to concentrate its
foothold-gaining strategy on customers who are especially
willing to run a risk, or who have done well by being
innovators. Or they may try to interest customers in a joint
venture development (pilot projects) in which the customer
becomes the co-owner of the innovation and has a certain
ability to influence things at a modest price
• Brand equity
perceived quality, mindshare, and loyalty. Branded goods or
corporate branding are predominant decision criteria for
customers indicate considerable differences in customers'
quality perceptions.
14. Entry barriers type C: Competitor
reaction
• obviously a barrier that the entrepreneur will
always have to consider
• important for the entrepreneur to understand
what kind of countermoves may be expected
18. Marketing Plan
• The target market strategy
• The product/service strategy
• Pricing strategy
• Distribution strategy
• Advertising and promotion
• Sales strategy
• Sales and marketing forecasts.