REACTION OF EXISTING FIRMSCAN BE AN ENTRY BARRIER

REACTION OF EXISTING FIRMSCAN BE AN ENTRY BARRIER

• WHEN existing firms
  • Indicate they’ll aggressively defend their position
  • Have substantial resources to wage defense
  • Can use leverage with customers to keep their business
• THEN potential entrants likely to be discouraged by
  • Prospects of a costly struggle
  • Strong threat of competitive retaliation
• WHICH makes entry barriers HIGHER

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