Two highly competitive industries are technology and beverage industries. I consider these industries competitive because of the customer base they serve and changing patterns of consumers’ preferences. For instance, the technology industry is competitive because there are incessant developments and inventions to meet the needs of the consumers. According to Radia, tech companies like Google are highly innovative, and they are continuously improving their products to meet the changing needs of consumers (Radia, 2016). On the other hand, the beverage industry is also considered competitive because of the need to stay within the consumer’s preference, despite the need to provide new tastes. This has been evident in the entrance of small brewery industries, which have found it difficult to penetrate the highly competitive market, where established breweries offer formidable competition
Barriers to the Entry in Technology and Beverage Industries
The technology industry is one of the most competitive industries that also offer significant barriers to entry by new firms. Firstly, the industry is characterized by customer loyalty (Dans, 2013). The technology industry is characterized by loyalty, whereby consumers prefer some products from specific companies than from others. A new entrant in the market will have a difficult time winning the loyalty of the target market. Furthermore, consumers’ desire to learn the features of the new technology provider may be costly. Secondly, research and development in technology require intensive capital investment. This is an implication that new entrants’, especially small companies, may lack enough capital to fund their projects, particularly in research. Thus, they may opt for generics that are not effective businesswise. One of the most significant barriers to the entry in the beverage industry is the high amount of capital that is required for manufacturing, marketing, and distribution of beverages. This makes it hard for new entrants to gain their way to the beverage industry.
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References
Dans, E. (2013 Aug. 22). Technology and barrier to entry. Medium . Retrieved from https://medium.com/enrique-dans/technology-and-barriers-to-entry-c6adb0a9ab0b .
Radia, R. (2016 April 28). Monopolies, like Google, are innovators, which is good for consumers. The New York Times . Retrieved from https://www.nytimes.com/roomfordebate/2016/04/28/is-google-a-harmful-monopoly/monopolies-like-google-are-innovators-which-is-good-for-consumers .
