Expected Retaliation Entry Barrier
Retaliation from established companies
Expected retaliation refers to the potential for established companies to retaliate against new entrants in a market or industry. This can create a barrier to entry for new companies, as they may not be prepared for the retaliation and may face difficulties in competing with established companies.
- Established companies may retaliate against new entrants in a market or industry.
- Expected retaliation can create a barrier to entry for new companies.
- Companies can anticipate retaliation from established companies by analyzing their behavior and strategies.
- Analyze established companies' behavior and strategiesCompanies should analyze the behavior and strategies of established companies in a market or industry to anticipate potential retaliation.Pro tipConduct market research to understand the behavior and strategies of established companies.WarningBe aware of the potential risks of underestimating the potential for retaliation, as this can lead to a lack of preparedness.
- Develop a strategy to mitigate retaliationCompanies should develop a strategy to mitigate the potential retaliation from established companies, such as by differentiating their products or services or by building a strong brand.Pro tipConsider partnering with other companies or organizations to build a strong coalition against retaliation.WarningBe careful not to over-rely on a single strategy, as this can lead to a lack of flexibility.
- Monitor and adjustCompanies should continuously monitor the behavior and strategies of established companies and adjust their strategies as needed to ensure they are prepared for potential retaliation.Pro tipRegularly review market research and customer feedback to identify areas for improvement.WarningBe aware of changes in the market or industry that may affect the potential for retaliation.
Microsoft
Microsoft has faced retaliation from established companies in the technology industry, but has been able to mitigate the retaliation through its strong brand and differentiated products.
OutcomeMicrosoft has become one of the largest and most successful technology companies in the world.
Underestimating the potential for retaliation
Companies may underestimate the potential for retaliation from established companies, leading to a lack of preparedness.
Over-reliance on a single strategy
Companies may over-rely on a single strategy to mitigate retaliation, leading to a lack of flexibility.
The concept of expected retaliation has been around for decades, but it was first formally identified by Michael Porter in his book 'Competitive Strategy'.
Source · BOOK
Competitive Strategy