Barriers to entry should technically be regarded as entry deterrent conditions. There are three broad categories of activities that deter entry; namely, structural obstacles to entry, risks of entry, and reduction of the incentive for entry. Barriers to exit are the activities and circumstances that commit a firm to its industry and its position within it. Discussion includes types of entry conditions and risks of entry.
Complementary products or services are utilized in combination with one another. Typically, a complementary good has limited significance when used alone but, when used with its complementary products, its overall utility increases. Examples of complements are cars and tiers, tablets and applications, printers and ink cartridges. Complementary products can be a significant part of a company's product portfolio with important implications for competitive advantage.
Transaction costs are costs involved in any transaction for the exchange of goods, services, or assets. They have two main components, transaction uncertainty and performance ambiguity. Transaction costs begin to be incurred during the preparation of a transaction and continue after it has been completed. Very high transaction costs may mean that an otherwise desirable transaction will be avoided. The desire to minimize transaction costs may lead to a reshaping of the transaction, internally or in ways that may include market internalization and mergers and acquisitions, thereby altering the organization, size and/or scope of a firm. As a result, transaction costs are also considered in the exercise of competition and regulatory policy
Efficiency is about the optimal use of inputs to produce an output, requiring no unnecessary resources and creating minimal waste.
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