Exit and entry barriers for mobile phone industry

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Exit and entry barriers for mobile phone industry

The dynamics of a particular industry or market may change to such an extent that a company may see divestiture or spinoff of the affected operations and divisions as an option.

However, circumstances, regulations, and other impediments may prevent such moves. A retailer might also wish to leave one location for another that offers potentially higher foot traffic or access to a demographic with customers with higher salaries.

Before making such moves, the retailer might be locked into a lease with terms that make it prohibitive to shut down or leave their current locations. A company could have received certain benefits, such as tax breaks and grants from the local government that encouraged it to set up shop in a location.

Those incentives may have come with high penalties if the company attempts to move its operations before fulfilling the obligations and terms set forth in the deal. High barriers to exit might force it to continue competing in the market, which would intensify competition.


Specialized manufacturing is an example of an industry with high barriers to exit, because it requires large up-front investment in equipment that can only do one task. If a specialized manufacturer wants to switch to a new form of business, they may be constrained by the money already invested in the cost of their equipment.

Companies in heavy industry can face extensive cleanup costs if they consider closing a factory or other production facility that used or produced materials that left traces at the site.

The expense of removing that material may outweigh the benefit of relocating the operation.In economics, barriers to exit are obstacles in the path of a firm which wants to leave a given market or industrial sector.

These obstacles often cost the firm financially to leave the market and may prohibit it . Think of telecommunications as the world's biggest machine. Strung together by complex networks, telephones, mobile phones and internet-linked PCs, the global system touches nearly all of us.

It. – The purpose of this paper is to examine economic debates over the conception of barriers to entry and speculates which definitions can be applicable to the telecommunications industry, more specifically, the residential broadband market. Mobile Marketing Tactics & Barriers to Entry This is the second in a series of posts from a presentation I am currently giving to advertising & marketing organizations.

Exit and entry barriers for mobile phone industry

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Barriers to exit - Wikipedia