Threats of New Entrants

Our industry requires new entrants to make large investments in capital equipment. Due to new in
the market, we may have earned strong customer loyalties that may be difficult for new entrants
to overcome. Since we are the first one in the market to enter, the demand of our product will be
high which help us to achieve economy of scale which acts as barrier for new entrants to
compete on a large scale that is quite challenging. Capital requirement for a new entrant is very
high. Large financial resources are required in order to compete us. We will provide such
incentive in form of prize discounts, promotion and cooperative advertising. Such expenditures
act as a barrier by reducing the profitability of new entrants. Since our business is highly eco-
friendly and sustainable, government policies can limit or prevent new entrants from entering
industries through pollution standard, product testing regulations etc. Analyzing all those factors,
there are high entry barriers that makes challenging for competitor or new entrant to enter or
compete us.