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