market entrythe entry into a MARKET of a new supplier in the form of either a GREENFIELD operation (i.e. an additional supply source) or the MERGER with, or TAKEOVER of, an existing supplier. Market entry constitutes a major BUSINESS STRATEGY decision, reflecting a strategic initiative on the part of a firm to develop, or reshape, its product/market positioning. Such entry occurs largely in response to the perceived long-run profit potential of the target market, which in turn is importantly influenced by the size of the market and its perceived growth potential, both with respect to the expansion of total primary demand and particular market segments. Successful new entry requires the firm not only to overcome any initial BARRIERS TO ENTRY, but also to develop a long-term strategy for establishing and sustaining COMPETITIVE ADVANTAGE over rival suppliers. See MARKET SYSTEM.
market entrythe entry into a MARKET of a new FIRM or firms. In the THEORY OF MARKETS, entrants are assumed to come into the market by establishing a new plant, thereby adding to the number of competing suppliers in the market (see GREENFIELD INVESTMENT). New entry into a market occurs when established firms are earning ABOVE-NORMAL PROFITS. The entry of new firms plays an important role in enlarging the supply capacity of a market and in removing above-normal profits. In practice, new entry also takes place through TAKEOVER of, or MERGER with, an established firm.
Most markets are characterized by BARRIERS TO ENTRY, which impede or prevent entry, protecting established firms from new competitors. See CONDITION OF ENTRY, POTENTIAL ENTRANT, CONTESTABLE MARKET, PERFECT COMPETITION, MONOPOLISTIC COMPETITION, OLIGOPOLY, MONOPOLY, LIMIT PRICING.