Typical Barriers To Market Entry

Developing a strategic asset, like a trademark or brand name, creates a competitive advantage over other companies, which means raising the barriers to entry in your marketplace. 

If there are no barriers, competitors can walk in and take over.  No one would have a competitive advantage over another.  All would be equal, with regular profit margins.

“In business, I look for economic castles protected by unbreachable ‘moats’.”

Warren Buffett Berkshire Hathaway Annual Report 1995

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company, and above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.”

 Warren Buffett writing in Fortune November 1999

In order to achieve and maintain a competitive advantage over your rivals for any invention or product, it is wise to develop some line of defense.  Just as in sports, a team must have a defensive plan against the competition.  If it is a strong line of defense, they will eventually give up.

The more competitive the market is, the more barriers are recommended to maintain a competitive advantage.  It is worth the effort, as rewards are high.

With a trademark in effect, as a strategic asset, that product becomes recognized over others in the industry, and will hold against strong competition, sustaining prices and profit margins.

Another strategic asset is establishing a brand name.  This deters competitive companies in the beginning stages, or any others trying to challenge.  Brand names take more time to establish. 

A company definitely would command a stronger presence with three barriers, as a patent, or copyright, and would lead the pricing in their industry.

As a company manages to attain four strategic assets, they would definitely be a winning company, leading their industry.  They would have such an advantage of resources and capabilities, and would achieve rapid growth.  Five strategic assets means the company would monopolize the market in their industry, enjoying high profits.