Competitive barriers of industry to overcome:
1. Advertising Since our product is slightly different product, products from existing or potential competitors cannot be fully substituted in place of the strong players.
2. Capital – How much to invest where is the question that has no perfect answer. For a new business investment is limited and needed in all functions.
3. Control of resources – Some big and established firms have more control over some resources like bulk buying
4. Customer loyalty – Strong firms may have existing customers loyally which new firms like ours will have to make over time.
5. Distributor agreements - Exclusive settlements with important distributors or retailers can make it difficult for new sellers to make a mark in the industry.
6. Economy of scale - Large, experienced companies can usually produce goods and services at lower costs than small and inexperienced firms.
7. Government regulations - It may make entry more difficult. Liaison with government bodies is a time taking process.
8. Inelastic demand – In monopolistic competition, a strategy to penetrate in a market is to sell at a lower price than the incumbents.
9. Intellectual property - New entrant need access to better efficient production technology
10. Network effect - When the value of goods depends on the number of existing consumer, established firms draw advantage. This will be the situation faced by heated insoles using KE as the other substitute products are already having good number of customers who place repeated orders.
11. Switching barriers - It may be difficult or expensive for consumer to switch products like in this case if the consumer has already got a set of rechargeable batteries then he may not shift to insoles using KE.