Barriers To Exit
Definition of 'Barriers To Exit'Obstacles or impediments that prevent a company from exiting a market. Typical barriers to exit include highly specialized assets, which may be difficult to sell or relocate, huge exit costs, such as asset write-offs and closure costs, and inter-related businesses, making it infeasible to sell a part of it. Another common barrier to exit is loss of customer goodwill. |
|
Investopedia explains 'Barriers To Exit'A company may decide to exit a market because it is unable to capture market share or turn a profit or for some other reason altogether. High barriers to exit might force it to continue competing in the market, which would intensify competition. Specialized manufacturing is an example of an industry with high barriers to exit, because it requires large up-front investment in equipment that can only do one task. |
Related Definitions
Articles Of Interest
-
Which of these is not one of Porter's 5 competitive forces?
Which of these is not one of Porter's 5 competitive forces? a) Threat if new entrantsb) Threat of subsitute goodsc) Rivalry from existing competitiond) Threat of government policy Correct ... -
Does perfect competition exist in the real world?
First, let's review what economic factors must be present in an industry with perfect competition: 1. All firms sell an identical product. 2. All firms are price-takers. 3. All firms have a ... -
7 Unconventional Ways Businesses Can Borrow Money
Find out how your business can get the money it needs - even when the bank says "no". -
Should You Head Back To Business School?
Find out if an MBA is necessary for you to reach your professional goals. -
Women And Finances: Is There A Gender Bias?
Uncover some very complex reasons for female gender biases in the finance world. -
The Basics Of A Financial Analysis Report
Running financial analysis on a company or industry is a key skill every investor must learn and understand how to undertake without which an ineffective financial report and investment recommendation ... -
Female Entrepreneurs Are Surpassing Their Male Counterparts
The world of entrepreneurship is constantly changing; the last year has seen a significant shift in the performance of female entrepreneurs. -
5 ETFs Flaws You Shouldn't Overlook
Despite their popularity, exchange traded funds have some drawbacks that investors should know about. -
Using The Price-To-Book Ratio To Evaluate Companies
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! -
Small Business: Speed Up Receivables To Avoid A Cash Crunch
Waiting for customers to pay can be a losing game. Look to factoring for quicker cash.
Free Annual Reports