Services can create barriers to entry by______.
A) using economies of scale
B) creating switching costs
C) using databases and information technology
D) all of the above

Question

Quizplus · Accepted Answer

All of the above choices can create barriers to entry for new potential competitors in a market. Using economies of scale to achieve lower costs through higher production levels can make it difficult for new entrants to match those lower costs. Creating switching costs for customers, such as through long-term contracts or unique services, can make it difficult for new competitors to attract customers away. Using databases and information technology to improve service delivery and customer experiences can also be a barrier to entry if new competitors do not have access to similar resources or lack the capital to invest in such technology.

Services Can Create Barriers to Entry By______