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Learn what barriers to entry are and how they affect competition and market power in economics. Find out the different types of barriers, such as economies of scale, network effects, capital requirements, and government policies, and see how they apply to various industries.
The six forces model is an extension of Porter's five forces model that considers six key drivers of competition and profitability in any given industry. It includes competition, new entrants, end users, suppliers, substitutes and complementary products.
A monopoly is a market with a single seller and no competition, which can charge high prices and make abnormal profits. Learn about the sources of monopoly power, the effects of monopolies on the economy, and the legal and regulatory aspects of monopolies.
Learn how to use Porter's five forces framework to evaluate the competitive environment of a business. The framework consists of five forces that determine the industry attractiveness and profitability: threat of new entrants, threat of substitutes, bargaining power of customers, bargaining power of suppliers, and competitive rivalry.
Vertical integration is an arrangement in which a company owns and controls different stages of the supply chain of a product or service. Learn about the advantages, disadvantages and varieties of vertical integration, such as backward, forward and balanced integration, with real-world examples.
Market power is the ability of a firm to influence the price of a product or service by manipulating supply or demand. Learn how market power is measured, regulated, and affected by different market structures, such as perfect competition, monopolistic competition, oligopoly, and monopoly.
Vendor lock-in is a situation where a customer is dependent on a vendor for products, unable to use another vendor without substantial switching costs. Learn about different types of vendor lock-in, such as monopolistic, collective, technology and personal, and see examples from economics, technology and society.
For industrial firms, mass production becomes both a strategy and an end in itself. Higher levels of output both require and result in high market share, and create an entry barrier to potential competitors, who may be unable to achieve the scale necessary to match the firms low costs and prices.