Recommendations for Non-Price Barriers to Entry
- Views: 2878
- Category: Politics: Economics
- Date Submitted: 07/15/2010 10:07 AM
- Pages: 7
- Report this Essay
Abstract
Big Drive Auto’s creation of a price strategy will provide fair prices and increase consumer demand for products and lower competition. The use of non-price barriers will provide a unique market strategy to prevent competitors from gaining an edge in the auto industry and prepare for any unexpected changes in the future. The use of product differentiation will provide consumers with efficient products and service after the purchase of vehicles. The advertisement of extended warranty, vehicle service and innovative products can ensure the consumer is satisfied.
Recommendations for Non-Price Barriers to Entry
There are a few items that Big Drive Auto can do for non-pricing strategies such as advertising, control of resources, and customer network effect to name a few.
• Big Drive Auto can make it difficult for new competitors by increased advertising so that new firms find it hard to compete. Therefore, brand loyalties can be created through advertising and other marketing strategy. These strategies help Big Drive Auto gain market power that act as barriers to entry for competitors and make it difficult for them to gain consumer acceptance.
• If Big Drive Auto has control of a resource essential for the automobiles, then other firms are not able to compete in the industry. For example, control over raw materials or other inputs in production process.
• Getting exclusive agreements with key distributors and suppliers can also make it difficult for competitors to enter the industry.
• Network effect is another good way to hinder competitors from entering the industry. For instance, when a product or service has a value that depends on the number of existing customers, then other players have hard time entering a market where the company has already captured a significant customer loyalty to the established products.
• Additionally, it is unclear what the state of the economy will be in the next five years, Big Auto will also want to build in...
Big Drive Auto’s creation of a price strategy will provide fair prices and increase consumer demand for products and lower competition. The use of non-price barriers will provide a unique market strategy to prevent competitors from gaining an edge in the auto industry and prepare for any unexpected changes in the future. The use of product differentiation will provide consumers with efficient products and service after the purchase of vehicles. The advertisement of extended warranty, vehicle service and innovative products can ensure the consumer is satisfied.
Recommendations for Non-Price Barriers to Entry
There are a few items that Big Drive Auto can do for non-pricing strategies such as advertising, control of resources, and customer network effect to name a few.
• Big Drive Auto can make it difficult for new competitors by increased advertising so that new firms find it hard to compete. Therefore, brand loyalties can be created through advertising and other marketing strategy. These strategies help Big Drive Auto gain market power that act as barriers to entry for competitors and make it difficult for them to gain consumer acceptance.
• If Big Drive Auto has control of a resource essential for the automobiles, then other firms are not able to compete in the industry. For example, control over raw materials or other inputs in production process.
• Getting exclusive agreements with key distributors and suppliers can also make it difficult for competitors to enter the industry.
• Network effect is another good way to hinder competitors from entering the industry. For instance, when a product or service has a value that depends on the number of existing customers, then other players have hard time entering a market where the company has already captured a significant customer loyalty to the established products.
• Additionally, it is unclear what the state of the economy will be in the next five years, Big Auto will also want to build in...