This could be one of the time that shisha or nicotine patch to change the consumer’s path from cigarettes to nicotine patch. Based on research smokers think of quitting at least once every 2 months. The new entrants in cigarettes industries that are actually a threat are shisha or nicotine patch. Profitability requires economies of scale Profitability does not require economies of scaleģ. High threat of entry of new competitors:ġ. Barriers to entry are factor or conditions in the competitive environment of an industry that make it difficult for the new businesses to begin operating in that market. Many of these factors fall into the category of barriers to entry, or entry barriers. There are several factors that determine the degree of the new threat of new entrants to each industry. The new competitors entering the marketplace can threaten or decrease the market share and profitability of the existing competitors and may result in changes to existing product quality or price levels. Threat of new entrants porter created affects the competitive environment for the existing competitors and influences the ability of existing firms to achieve profitability.Ī high threat of entry means new competitors are likely to be attracted to the profits of the industry itself and can enter the industry with ease. Porter’s threat of new entrant’s definition revolutionized the way people look at the competition in each industry. According to the porters 5 forces, threat of new entrants is actually one of the forces that shape the competitive structure of an industry. That clearly means less profit to go around. More competition or increased production capacity without the concurrent increase in the consumer demand. A profitable industry will attract more competitors looking to achieve profits and If it’s easy for these new entrants to enter the market, if entry barriers are low this poses a threat to the firms already competing in that market. In the porter’s five forces, threat of new entrants refers to the threat of new competitors pose to existing competitors in an industry.