When you build up you business, beyond differentiating, you want to build up barriers to entry to make it more difficult for the other guys to copy you.
Here are a number of typical barrier to entry:
- Capital intensive industries (airline, mobile operators) / capital requirement. The bigger you are, the better the economics are
- Limited goods e.g. spectrum
- Regulation / licencing e.g. mobile operators again!
- Quasi-monopoly / dominant market share: e.g. Microsoft, Google
- High switching costs for end-users
- Access to distribution channels
- Lobbying power
- Best pool of talents / R&D engineers; ‘A-player’ team
- Speed of execution
- Reputation e.g. banks
- Brand name e.g. Mc Kinsey