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.

THANK YOU