5 Force
Submitted by tomtom1007 on December 3, 2008
- Category: Business
- Words: 554
- Pages: 3
- Views: 630
- Popularity Rank: 541
5 Force
Threat of New Entrants. Incumbent utility players enjoy considerable barriers to entry. Setting up new generation plants carries high fixed costs and new power producers need a lot of upfront capital to enter the market. Gaining regulatory approval to build new plants can be a long and complicated process for merchant generators. Achieving brand-name recognition and the trust required to convince consumers to switch from incumbent utility providers is not just costly but also time consuming. Meanwhile, once a power plant is built and a market established, the cost of serving one more customer or offering one more kilowatt-hour is minimal. This is a barrier because new entrants can only...
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