BARRIERS TO ENTRY ANALYSIS

Group 8

Sana Nabi
Kirti Siddapur
Mandanna TM
Rohan Nair
Sudipta 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

œ
œ Product differentiation
œ
œ Economies of scale
œ
œ Customer loyalty
œ
œ TRAI Regulations and policies
œ
New Entrant

œ TATA DOCOMO
œ
œ Branding Perception
Petrochemicals Industry overview

œ Production process – Cracking Crude Oil and

Polymerization (polymers, polyesters, fibre
intermediaries and other industrial
chemicals)
œ 4 main players
• Reliance Industries Ltd (RIL)
• Indian petrochemicals Corporation Ltd (IPCL)
• Gas Authority of India Ltd (GAIL)
• Haldia Petrochemicals Ltd (HPL)
œ RIL and IPCL account for 70% of production
capacity in India
Petrochemical Industry – Entry
Barriers

œ 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
œ Economies of Scale
• Lower operating costs
œ 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..

œ Government Policy
• Deregulation in Natural Gas pricing
• Lowering of Import duties
œ Technology requirement
• Developed in-house and kept as a closely
guarded secret
• Competitive advantage



BARRIERS OF ENTRY

œ ECONOMICS OF
SCALE
œ
œ CAPITAL
INVESTMENT
œ
œ GOVERNMENT
POLICIES
ECONOMICS OF SCALE

Hindustan Zinc Limited

Bharat Aluminum Company
Sesa Goa
Neyveli Lignite Corporation
National Aluminum Company
Hindalco Industries
Dempo
 CAPITAL INVESTMENT

WHEEL LOADER TRUCK LOADER

EXCAVATOR
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
œ the minimum period of a mining lease is twenty
years and a maximum period of thirty years.


œ Area restrictions notified for reconnaissance


permit, prospecting license and mining lease
have been made applicable state-wise, instead
of the country as a whole.
œ 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.
œ 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

œ Capital requirement

- Plant, location, machines etc.
œ
œ Distribution channels
œ
œ Economies of scale

œ Government policy

Ex: Environment Stds, Safety, Export &
Import Duties etc


œ Advertisements
œ
œ Globalizations
œ
Maruti Suzuki India Ltd

œ Leading four wheeler automobile

manufacturer in south Asia.
œ Leader in small car segment
œ Most trusted automobile brand in India
œ Large domestic Market Share.


œ
MSIL

œ Efficient after sales service,2628 Authorized

Service stations
œ Advertisements
œ Efficient Distribution channels
œ
MSIL


Additional service:-
œ Maruti insurance

- Vehicle insurance as a value added
service.
œ Maruti finance

-To Promote bottom line growth
œ Maruti True value
œ Maruti driving school

- As a CSR Initiative
œ
Entry Barriers for MSIL

œ Product Differentiation
œ Technology

Barriers to entry-Consultancy

œ
œ
œ High Barriers to Entry-Low exit barriers
œ
œ High profit margins
 Barriers to Entry- New Entrant

œ Customer loyalty
œ Network Effect
œ Intellectual Property
œ Globalization
Barriers of entry-Mindtree


Service Differentiation

Poaching

Local Networks

R&D
Non Disclosure Agreement

œ 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.
œ
œ 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

œ
œ 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.
THANK YOU
