What does the term "barriers to entry" refer to?

The term "barriers to entry" refers to the challenges and obstacles that new competitors face when attempting to enter a particular market. These barriers can take many forms, including high startup costs, strong brand loyalty among consumers for established companies, regulatory requirements, access to distribution channels, and economies of scale that favor existing players.

Understanding barriers to entry is crucial for analyzing market structure and competition. When barriers are high, it limits the number of new entrants, thereby protecting established firms and allowing them to maintain or enhance their market share and profitability. This concept is foundational in strategic management as it helps in assessing the competitive landscape of an industry and the potential for new entrants disrupting existing market dynamics.

The other options do not accurately represent the concept of barriers to entry. Factors that increase supplier power relate to supplier dynamics, not the challenges new entrants face. Means to keep prices stable pertain to pricing strategies rather than entry hurdles. Strategies used to reduce competition involve efforts by existing firms, rather than the specific challenges posed to newcomers in a market.