Ways of Overcoming Entry Barriers in Markets

In contestable markets the entry and exit barriers are low creating a situation where both actual and potential competitive pressures are high. How can a business overcome some of the traditional entry barriers?

Here are some suggestions:

1. Start with a minimum viable product and then iterate - responding to consumer feedback
2. Use a disruptive pricing model / have different objectives
3. Produce outstanding content/products – this makes a product less price sensitive
4. Leveraging an existing brand to enter a new market - an economy of scope!
5. Viral marketing to cut the marketing costs of attracting new sales
6. Acquisition of a business that is already well-established in a market
7. Leasing rather than buying equipment / retail space to reduce fixed costs
8. Out-innovate existing firms (using high research intensity)
9. Use of open-source rather than proprietary software to cut costs
10. Lean and flexible manufacturing / supply on demand
11. Free-ride on scaled channels e.g. using Amazon market place / You Tube as a sales platform
12. Play the long game – accept that losses will be made initially - but can shareholders tolerate these losses?