what are the barriers to entry in the market to illustrate t

what are the barriers to entry in the market to illustrate the potential for new competition and its impact on Walmart future in the market over time

Solution

Entry in the market for a new firm has some possibility but some barriers also. If there are some stablised company ,which are enjoying super noramal profit and they have covered a large part of the market .It is very difficult for a new firm to enter in the market..There are two types of market-

1.State supported absolute Monopoly market.

2.Free entry Market.

In first category market , where government supports the monopoly ,not any firm can enter in the market.

But in the second categories of market ,where entry is totally free A new firm can enter but face some problems( barriers) These barriers are-

1.Cost-Existing firms are enjoying absolute cost advatages by earning economies of sacle beacause they are producing a large amount of goods and enjoying economies of scale .so they can sale its products at minimum price ,it is not possible for a new firm.

2.Capital - existing firms have already satisfied there customers but for a new firm it is very difficult to attaract the customers.for this it has to invest a large amount of capital only for attaracting the customers.

3.Know How-An exist firm is an experience firm due to its rich experience it know each and every way of commanding and controling the market for a new firm it is a difficult task.

4.Location-beacuse the stablised firms have already capture the market so for new firm location selection is a very difficult task.

5.Control Over Key raw Materiels-it is also a very imoprtant barriers.

Some other barriers can also be discuss such as government policy , custome\'s cost of switching,access to distribution channels & capital requirment to enter in the market.

In the present senerio of market where there are so many retailors in the market ,Future of Walmart is no so safe.Reports are showing that it sales have declined fro five straight quaters.

The birth of online retailers Like-Amazon has contributed to the problems at the Walmart and these days consumers are less likly to make trip to the stores when they could get free delivery online.