The threat of new entrants is high when it is Easy for competitors to enter the market. A high threat of new entrants makes an industry less attractive – there are low barriers to entry. Therefore, new competitors are able to easily enter into the industry, compete with existing firms, and take market share. There is a reduced profit potential as more competitors are in the industry.
Which of the following connections allows the fastest download speeds?
If it is easy for competitors to enter the market, the threat of new entrants is considered high. Threat of new entrants refers to the threat new competitors pose to existing competitors in an industry. Therefore, a profitable industry will attract more competitors looking to achieve profits.