Definition and examples of the barriers to entry a new business often faces

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Barriers to entry are challenging but necessary business forces that ensure the highest quality products at the lowest prices for consumers.

Every runner knows how easy it is to reach your destination when the path is clear and the surface level. But when obstacles are added—say a tree falls after a storm, cutting across the roadway—achieving your goal becomes much more challenging.

A taxi driver in 2016, for example, had to pay $2,000 in fees and go through a 33-step process in order to be licensed in Washington, DC, which greatly hindered cab companies’ attempts to compete with ride-sharing apps like Uber and Lyft. Established businesses considered heavyweights in their respective fields often monopolize resources: Standard Oil controlled 95% of the oil produced in the United States at the turn of the century, and while it took an act of Congress to split it up, its descendants, Chevron

 

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