What are the steps needed for incumbents to raise entry barriers?

To compare the cost of exit against the benefit, one needs to conduct a thorough cost-benefit analysis. This involves calculating the total cost of exit, including direct and residual costs, and comparing it with the potential benefits of staying in the industry. The benefits could be in terms of revenue, market share, or strategic advantages. If the cost of exit is higher than the benefits, it might be more advantageous to stay in the industry. To lower exit barriers, one can consider strategies such as selling assets, transferring employees, or negotiating termination clauses in contracts.

Comparing the levels of resources, skills, and technology against those required to pass the entry barriers is significant as it helps in understanding the feasibility of entering a particular market. It allows businesses to assess whether they have the necessary resources, skills, and technology to overcome the entry barriers. This comparison also helps in strategic planning, as it can identify gaps that need to be filled before entering the market. Furthermore, it can provide insights into the competitive landscape and the challenges that might be faced.