BARRIERS TO ENTRY ANALYSIS
Group 8
Sana NabiKirti SiddapurMandanna TMRohan NairSudipta Sar
Barriers to Entry
Definition:
The term refers to hindrances that an individual may face while trying to gain entrance into a profession or trade. Barriers to entry restrict competition in a market.
Reliance Telecommunications
Product differentiation
Economies of scale
Customer loyalty
TRAI Regulations and policies
New Entrant
TATA DOCOMO
Branding Perception
Petrochemicals Industry overview
Production process – Cracking Crude Oil and Polymerization (polymers, polyesters, fibre intermediaries and other industrial chemicals)
4 main players • Reliance Industries Ltd (RIL)• Indian petrochemicals Corporation Ltd (IPCL)• Gas Authority of India Ltd (GAIL)• Haldia Petrochemicals Ltd (HPL)
RIL and IPCL account for 70% of production capacity in India
Petrochemical Industry – Entry Barriers
Capital Requirements• The minimum economic size of an integrated plant is around 1
million tonnes per annum• High lead-time before the assets generates a reasonable return on
investments• Investment in R&D
Economies of Scale• Lower operating costs
Product Differentiation• Minimal product differentiation, ccompetition is largely price
based• International competition from countries like China and other
South East Asian countries• Manufacturing flexibility• Level of integration in operations
Petrochemical Industry – Entry Barriers contd..
Government Policy• Deregulation in Natural Gas pricing• Lowering of Import duties
Technology requirement• Developed in-house and kept as a closely
guarded secret• Competitive advantage
BARRIERS OF ENTRY
ECONOMICS OF SCALE
CAPITAL INVESTMENT
GOVERNMENT POLICIES
ECONOMICS OF SCALE
Hindustan Zinc LimitedBharat Aluminum CompanySesa GoaNeyveli Lignite Corporation National Aluminum Company Hindalco IndustriesDempo
CAPITAL INVESTMENT
TRUCK LOADER
EXCAVATOR
WHEEL LOADER
Articulated Trucks
GOVERNMENT POLICIES
The Mines and Minerals (Regulation and Development) Amendment Act, 1958
The Mines and Minerals (Regulation and Development) Amendment Act, 1972
The Mines and Minerals (Regulation and Development) Amendment Act, 1986
The Mines and Minerals (Regulation and Development) Amendment Act, 1994
The Mines and Minerals (Regulation and Development) Amendment Act, 1999
the minimum period of a mining lease is twenty years and a maximum period of thirty years.
Area restrictions notified for reconnaissance permit, prospecting license and mining lease
have been made applicable state-wise, instead of the country as a whole.
In the interest of scientific mining, minimum area for grant of mining lease has been fixed as one hectare in respect of small deposits (including float ore deposits), two hectares for beach sands or placers; and four hectares for all other mineral deposits.
The royalty that companies have to pay state governments for extracting minerals is around 2-3 per cent of the price that minerals fetch in the market!
Entry Barriers For
Entry Barriers for the Industry
Capital requirement- Plant, location, machines etc.
Distribution channels
Economies of scale
Government policy Ex: Environment Stds, Safety, Export &
Import Duties etc
Advertisements
Globalizations
Maruti Suzuki India Ltd
Leading four wheeler automobile manufacturer in south Asia.
Leader in small car segment Most trusted automobile brand in India Large domestic Market Share.
MSIL
Efficient after sales service,2628 Authorized Service stations
Advertisements Efficient Distribution channels
MSIL
Additional service:- Maruti insurance - Vehicle insurance as a value added
service. Maruti finance -To Promote bottom line growth Maruti True value Maruti driving school - As a CSR Initiative
Entry Barriers for MSIL
Product Differentiation Technology
Barriers to entry-Consultancy
High Barriers to Entry-Low exit barriers
High profit margins
Barriers to Entry- New Entrant
Customer loyalty Network Effect Intellectual Property Globalization
Barriers of entry-Mindtree
Service DifferentiationPoachingLocal NetworksR&D
Non Disclosure Agreement
A non-disclosure agreement (NDA is a legal contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to by third parties.
It is a contract through which the parties agree not to disclose information covered by the agreement.
Non-compete agreement
• A non-compete clause or covenant not to compete (CNC), is a term used in contract law under which one party (usually an employee) agrees not to pursue a similar profession or trade in competition against another party (usually the employer).
• As a contract provision, a CNC is bound by traditional contract requirements including the consideration doctrine..
Patent
A patent is a set of exclusive rights granted by a state (national government) to an inventor or their assignee for a limited period of time in exchange for a public disclosure of an invention.
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