Incumbents are known for being aggressive to new entrants: If at least one of the incumbents is well known for retaliating aggressively against new entrants, that could be a deterrent for companies tinkering with the idea of entering the market.Incumbents have a privileged position: For example, exclusive access to distribution channels, large economies of scale, intellectual property or strong brands.If they needed to invest in specialized machinery, for example, their investment may be at risk of becoming a capital sunk cost they may not be able to recover. There’s a high risk of stranded costs: This happens if new entrants have to make investments that would be hard to recoup if the business doesn’t go as well as they expected.Threat of new companies trying to enter, will be lower if: In general, the attractiveness of a market and in turn the
