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Threat of New Entrants
Kinds of Barriers to Entry
Switching Costs
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Michelle Academics
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Cards (4)
are the one-time costs customers incur when they buy from a different supplier
switching costs
manufacturers producing new, innovative product creates
high
switching costs for customers.
If switching costs are high, a new entrant must offer either a offer substantially
lower
price or a much better product to attract buyers.
the
more
established the relationships between parties, the
greater
the switching costs