Is Setting up Barriers to Entry Always Profitable for Incumbent Firms?

Does Exogenous Barriers to Entry Make Firms Less Competitive? A Field Study in Inebolu

“…In economic literature the most known barriers to entry can be listed as Generally, barriers to entry are investigated in two groups which are exogenous (technical) and endogenous (strategic) (Türkkan 2001, Greer, 1992Dilek and Top, 2012). In fact, Bain sees the whole of barriers as exogenous from decisions of managers while Kepler (2009) finds it wrong because incumbent firms can create some of barriers to entry.…”

“…In fact, Bain sees the whole of barriers as exogenous from decisions of managers while Kepler (2009) finds it wrong because incumbent firms can create some of barriers to entry. Shortly, barriers to entry which are sourced from structure of market and independent from activities of incumbents are exogenous barriers to entry (Dilek and Top, 2012).…”

“…In economic literature the most known barriers to entry can be listed as cost advantage of incumbents, product differentiation, capital requirements, customer switching costs, access to distribution channels, government policy, advertising, number of competitors, Research and development, price, technology and technological change, market concentration, seller concentration, divisionalisation, brand name and trademark, sunk costs, selling expenses, expected reaction of incumbents to market entry, possession of strategic raw materials (Dilek and Top, 2012;Niu et.al, 2011).…”

“…Firms generally care on their future profits and in some instances new competitors can increase these profits. Because of this reason they can prefer not to deter potentials (Dilek and Çolakoğlu, 2013;Dilek and Top, 2012).…”

“…We also asked questions to reveal presence of exogenous barriers to entry in participant's markets. These questions are prepared by the help of previous studies Türkkan ( 2001), Dilek and Top (2012). Descriptive statistics, skewness and kurtosis values are given in Table 2.…”