Question

New entrants can be a threat to an existing industry. What is an example of a low and/or high threat of new entrants?

For example - JetBlue, a company in the airline industry.

New entrants to the airline industry pose a very low threat to JetBlue. First, the barriers to entry are remarkably high as several airplanes are required to compete in the airline industry. Operating costs are massive and there are major government regulations for companies in the industry. Therefore, it is safe to say that the threat of new entrants in the airline industry is low as barriers to entry are high.

However, the threat of new entrants alone does not determine the overall attractiveness of an industry. The remaining forces (bargaining power of buyers, rivalry among existing competitors, bargaining power of suppliers, and the threat of substitutes) must be taken into consideration when determining overall industry attractiveness.

Answer 1

For example Coca Cola company with low threat of new entrants in the industry.
In the fast-growing world, there can be several factors that discourage new company or firm from entering in the beverage market. It is a myth that growing a brand overnight is possible if you have a certain skill set. It is necessary to have a strong financial position to establish a brand like Coca-cola. Some local brands can start it at a smaller scale and still marketing and hiring effective staff requires high investment. For any brand to build customer loyalty will take a handsome amount of time. Thus, new entrants can compete with Coca Cola But to build a brand like this require both capital and skilled human resources.