This post is a result of an email I received from one of my respected clients. Chris Lamontagne, who runs a rugby coaching business in Merseyside(UK) area, emailed me his thoughts about expanding his business. He does not want his business model to be ruthlessly copied and as a result face unnecessary competition in future. He wants to innovate and provide something that won;t be as easy to replicate, not at least in quick time.
This reminded me of my Chartered Marketing days. And Michael Porter’s Five Forces Model. Although the model is as old as I am, I understood a part of it in a different light while reading Chris’s email this morning. The importance of ‘barriers to entry’ part dawned upon me.
Its not only the big boys anymore who are always scouting for ways of shutting-off, or, controlling new entrants. Of course, the artificially created ‘barriers’ to stop new entrants from entering an industry, often fall under vigilance, sometimes rightly so. Buy-outs of small start-ups by big players will always continue. That’s not the point here.
The point I am trying to understand is, how can small entrepreneurs raise legit ‘barriers to entry’ within their niche? How can they ensure that the new entrant threat is kept at a constant low? What can they do within their business model to make any head-on new competitor sweat harder?
Answers.
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