mobility barriers

isolating mechanisms

economic forces that limit the extent to which a firm's COMPETITIVE ADVANTAGE can be duplicated or neutralized through the activities of other firms.

There are two broad groups of mobility barriers. The first are barriers to imitation, which make it difficult for existing firms in a market or potential market entrants to duplicate the resources that form the basis of a firm's competitive advantage. These impediments include legal restrictions on imitation, such as PATENTS, copyrights, trademarks and licensing; superior access to factor inputs information, distribution channels and customers; ECONOMIES OF SCALE; and the specific know-how, collective wisdom and skills of the firm.

The second group of mobility barriers are early-mover advantages that allow a firm with competitive advantages to increase the magnitude of its advantages relative to competitors and potential market entrants over time. Early-mover advantages include EXPERIENCE-CURVE economies; reputation which reduces buyer uncertainty about product quality; and high buyer-switching costs.

Isolating mechanisms protect a single firm from immediate competitors in much the same way that BARRIERS TO ENTRY protect incumbent firms from potential market entrants. See RESOURCE-BASED THEORY OF THE FIRM, STATEGIC GROUP.

mobility barriers

economic forces that limit the extent to which a firm's COMPETITIVE ADVANTAGE can be duplicated or neutralized through the activities of other firms. Mobility barriers, or isolating mechanisms as they are sometimes referred to, prevent other firms from competing away any ABOVE-NORMAL PROFIT that a firm earns as a result of its competitive advantage.

There are two broad groups of mobility barriers. The first are barriers to imitation, which make it difficult for existing firms in a market or potential market entrants to duplicate the resources that form the basis of a firm's competitive advantage. These impediments include legal restrictions on imitation, such as patents, copyrights, trademarks and licensing; superior access to factor inputs, information, distribution channels and customers; ECONOMIES OF SCALE; and the specific know-how, collective wisdom and skills of the firm.

The second group of mobility barriers are early-mover advantages, whuch allow a firm with competitive advantages to increase the magnitude of its advantages relative to competitors and potential market entrants over time. Early-mover advantages include learning-curve economies; reputation, which reduces buyer uncertainty about product quality; and high buyer-switching costs.