Entry barriers in retailing (original) (raw)
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Retail Format as a Barrier to Entry
SSRN Electronic Journal, 2009
Barriers to entry" form a key construct in strategy scholarship and pedagogy. However, limited empirical evidence exists for many putative barriers. For example, although considerable evidence suggests that managers perceive the existence of significant distribution-related barriers to entry, there is virtually no empirical evidence for distribution's actual role as an entry barrier. We exploit a field experiment conducted by Systembolaget, the Swedish government alcohol retail monopoly, and examine the role of changes in distribution through a randomized change from counter-service to selfservice stores. We find that self-service stores sell much higher product variety and new entrants do better in self-service stores. The increase in variety is comparable to the change from catalog sales to internet.
Entry efficiency and barriers to entry in the Spanish retail market
Recent studies have shown that barriers to entry for large retail establishments in Spain have been increased in the last decade. We exploit a unique dataset derived from an extensive analysis of the location of each large retail establishments in Spain to test whether the entry of large retail establishments was effectively limited by regional regulation. To achieve this aim we merge the literatures on stochastic production frontiers and on barriers to entry by estimating a frontier entry model, which allows us to get market-specific estimates of entry costs. We have found that entry costs have decreased the number of large establishments in a 25%. Most of this inefficiency is explained by legal retail legislation. The existence of significant differences among local markets discourages using regional data to analyze entry cost and barriers to entry.
Barriers to entry and competitive strategies
Strategic Management Journal, 1981
The relationships between the difficulty of entry and competitive strategies in five industries, chosen for their differing structural contexts, were tested. Statistical support was found for the value of pre-entry analysis of entry barriers and of firms' predicted responses to potential entry. In particular, the creation of idle productive capacity appears to be a potent deterrent to new entrants.
Barriers hindering the entry of new firms to the competitive market and profitability of incumbents
Management : Journal of Contemporary Management Issues, 2019
Recently, entering new firms into a competitive market is getting harder due to different industry barriers. Addressing this concern , the aim of this paper is to measure the relationship between industry barriers that prevent the entry of new rivals and increase the profitability of incumbent firms. The study was based on the data of one hundred and seven executives of firms that operate in the Republic of Kosovo, and it attempts to assert and order the market entry barriers. The responses were collected by questionnaires and the econometric model was constructed, to test this relationship. The findings were obtained using descriptive statistics, Pearson correlation, and multivariate regression. Econometric results indicated that seven dimensions of industry barriers have a direct and positive impact on the profitability of incumbents and serve as barriers for new firms to enter the market, and showed that business executives in Kosovo perceive capital requirements of non-incumbents as the most important entry barrier, whereas access to distribution channels as the least important. The theoretical and practical implications of these findings are discussed and explained.
Perceptions regarding strategic and structural entry barriers
2010
Extant literature discusses a large number of different entry barriers that may hamper market efficiency or entrepreneurial activity. In practice several of these barriers cohere and stem from the same root. Factor analysis is used to identify the underlying dimensions of these barriers. 7 generic factors have been found that drive the system. In the literature a debate exists between scholars that stress the importance of structural and/or strategic barriers. This paper shows that in the perception of firms both types of barriers are important and argues that the effectiveness of strategic barriers depends on attributes of the market structure. Based on the seven generic factors, a conjoint analysis is carried out to identify the most important factors perceived by firms. The conjoint analysis shows that in particular the barriers rooted in three underlying dimensions require attention of market authorities as they may refrain new entrants from entry: finance, access to distribution channels and strategic action. Remarkably, government rules and regulations, product differentiation, R&D and advertising constitute a minor entry problem according to the firms.
Barriers to entry and firm performance: a proposed model and curvilinear relationships
Journal of Strategic Marketing, 2013
This research examines the relationships among the barriers to market entry: capital requirements; competitive advantage of incumbent firms; business environment; and firm competence, and their relationship to firm performance. Through a mail survey, data were collected on a sample of 190 companies. A hierarchical regression analysis enabled the assessment of the relationships among barriers to entry and firm performance. In addition, the paper examines the quadratic function of second degree among the variables to see ...
Economic and Antitrust Barriers to Entry
2003
We review the extensive literature on barriers to entry in law and economics; we introduce four concepts, namely economic, antitrust, primary, and ancillary barriers to entry; we employ these concepts to classify a set of well-known structural characteristics of markets and competitive tactics by incumbents; and we apply the resulting insights to evaluate the verdicts that were reached in a set of landmark antitrust court cases in the US.
Do entry barriers perceived by SMEs, affect real entry? Some evidence from the Netherlands
The objective of this paper is to analyse the relationship between perceived entry barriers and real entry. Real entry rates are interpreted as an indicator for the dynamics in an industry. The major hypothesis of this paper is that important entry barriers restrict new entry. Real entry rates are provided by a starter ratio for different industrial sectors and provinces in the Netherlands. Firms were interviewed in December 2004 to obtain data about the perceived importance of a large number of entry barriers (structural as well as strategic). The most important barriers, perceived by firms, are related to acquiring sufficient sales volume and capital, financial risks, cost disadvantages, cost of capital, economies of scale and product differentiation. The data on perceived entry barriers and information about the attractiveness of the market, are used to explain real entry in the first six months of 2005. Generally, the results confirm the expected relationship between entry barriers and real entry. However, some barriers seem to influence the starter ratio more strongly. Remarkably, several of the most 'important' perceived barriers do not restrict real entry rates. This result contains an interesting lesson for policy makers. They should not address important barriers per se, but scrutinize the effects of barriers that seem to restrict real entry. For example, government regulations are not perceived as one of the most important entry barriers. Nevertheless, this barrier has a strong impact on starter ratios. This result justifies why the Dutch government scrutinizes the relevance of existing rules and regulations.
2013
Developing markets have been shown to have institutional frameworks that differ from that in developed economies and greatly affects the transaction costs in the market which favours the use of the collaborative mode of entry. This study argues conditions exist in unstable developing markets that support the use of the wholly owned subsidiary. It discusses these conditions from empirical analysis of the conditions in the Nigerian market and introduces the need for research to focus on a wider perspective on entry mode research suggesting a look at not just cost minimization measures, but also value creation and the notion of strategic flexibility under uncertainty as advocated by the real options theory.