Threat of New Entrants
The competition in an industry will be the higher, the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry.The threat of new entries will depend on the extent to which there are barriers to entry.These are typically:
· Economies of scale (minimum size requirements for profitable operations),
· High initial investments and fixed costs,
· Cost advantages of existing players
· Brand loyalty of customers
· Protected intellectual property like patents, licenses etc,
· Scarcity of important resources, e.g.

posted by Abd ur Rehman