Assignment:
You are to examine, analyze and report on what the various barriers to entry were for Microsoft, and what did they specifically do from a strategic standpoint to overcome those barriers.
There are seven common barriers to entry as follows:
1. Economies of scale.
2. Product differentiation.
3. Capital requirements.
4. Switching costs.
5. Government policy.
6. Access to Distribution Channels.
7. Cost Disadvantages Independent of Scale.
Barriers to entry are factors that prevent a startup from entering a particular market. As a whole, they comprise of one of the five forces that determine the intensity of competition in an industry. The other four (4) are industry rivalry, the bargaining power of buyers, the bargaining power of suppliers and the threat of substitutes. The intensity of competition in a certain field determines the attractiveness of a market (that is, low intensity means that the market is attractive).
Factors involved as barriers to entry may be either innocent (for example, the dominating company's absolute cost advantage) or deliberate (for example, high spending on advertising by incumbents make it very expensive for new firms to enter the market).
Barriers to entry act as a deterrent against new competitors. They serve as a defensive mechanism that imposes a cost element to new entrants, which incumbents do not have to bear. Startups need to understand any barriers to entry for their business and market for two key reasons:
1). Startups might seek to enter a business with high barriers to entry. Doing so would put the start-up at a significant disadvantage that is difficult to overcome.
2). Startups that become market leaders must understand how to protect their position by building barriers to entry.
Your paper needs to be written in APA format and 10 pages in length, not including the Cover Page, Table of Contents and References Page which must be listed separately (please use at least 8 scholarly references to support your findings).