Entry Deterrence

Entry deterrence is a strategy used by established companies to prevent new competitors from entering their market. They might do this by setting low prices temporarily, creating high-quality products, or investing heavily in advertising and brand recognition. The goal is to make it so difficult or unprofitable for new entrants that they decide not to compete, thereby maintaining the existing company's market share and profitability. This approach helps protect the company's position and can influence market dynamics by discouraging potential rivals from attempting to enter.