Market entry with credit
Market entry
New entrants to a market pose a competitive threat that firms underestimate at their peril. So firms should always think hard about who might enter the market, how and when this might happen, and who has the resources, technical skills and ingenuity to move in on your territory with a more attractive product offer.
Substitutability
Businesses with a product or service for which customers might choose an alternative face a competitive threat, especially if the alternative is cheaper. For example, an airline may face competition from a high speed rail operator. What matters is recognising that some organisations need only to redefine their business in slightly broader terms for it to become a competitor. This was highlighted in the 1960s by Theodore Levitt, a business writer and marketing guru, who warned of the dangers of marketing myopia: seeing a business in simple, narrow terms, rather than from the perspective of the market. It is important to a business in broad terms that are understood by the market: for example, an airline company is a transport company, and may therefore enter the rail or shipping business; a theatre is In the leisure industry, and may start competing with cinemas or restaurants, and so on.