Competitive pressures stemming from the threat of entry are stronger when?

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Competition is a major issue for businesses. It is especially important when looking at the threat of entry, which stems from new entrants into an industry. The competitive pressures stemming from the threat of entry are stronger when:

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-The market size is small and there are few customers to go around -When barriers to exit exist in your industry (e.g., high capital requirements)-Existing firms have strong reputations or customer loyalty These elements limit the ability for new entrants to enter into a market and gain traction.

As such, it is important for managers in an industry with weak competitive pressures stemming from entry to consider: -How much resources are spent on sales efforts -The amount of time invested by management -The level of customer service or support provided by firms (e.g., warranty terms)

For example, if your company spends most of its resources selling product rather than providing good customer service then there might not be any barriers to exit even though you have low competition coming from other companies because customers will leave when they start receiving poor treatment. It’s also important that firms with strong reputations work hard at maintaining them–especially when facing


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