Competite pressures stemming from the threat of entry are stronger whenIs is dificult or costly for…

➤ Why do capital requirements and government regulations act as barriers to entry?
Large capital needs (for example, a $5 million startup outlay) and heavy regulatory compliance raise fixed costs and risk. These barriers favor incumbents with scale, financing, or compliance experience. Smaller or informal entrants often cannot meet these thresholds, lowering the chance of successful entry.