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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: J.Y. Wang who wrote (30946)	4/16/1999 5:43:00 PM
From: J.Y. Wang	Read Replies (1) \| Respond to of 122087

A couple of people emailed me about examples of "barriers to entry." Before I explain, check out: thestreet.com Again, two terms: "Competitive advantage" and "barriers to entry." Those net retailers are getting pretty desperate because they have neither. Any monkey can buy stuff from Tech Data at cost, sell it over the internet, and try to make profit on advertisement. They are doomed to fail. What kind of retailers will be profitable on the internet? GAP, IBI, DELL, etc. Gap jeans are Gap jeans -- onsale.com can sell jeans for $5 but people will still pay $20+ for Gap jeans. Victoria's Secret lingerie is Victoria's Secret lingerie. Buy.com can sell bras for $0.25 each, but women will still buy Victoria's Secret bras for $10+. You can buy cheaper computers than Dells, but you won't have the support and confidence you can have with Dell. Brand recognition and perceived difference(s) in product contribute to competitive advantage and barriers to entry. Note the frequent references to buy.com in thestreet.com's article? I have mentioned buy.com several times because they are bringing to light the reasons why most current internet companies will never, ever, ever be profitable, including buy.com. It will just take them a while to realize that, for many to go out of business, and for the real future internet retailers to step in. And guess what? The real future internet retailers are mostly going to be current non-internet retailers. Be careful.