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It is questionable whether there have ever been any real long-term structural barriers to market entry. Certainly, economies of scale offer cost advantages to the large manufacturers, and high capital requirements can keep some potential competitors in check. For example, if you want to start an international oil company, you will need enough capital to produce and refine oil on the scale of ExxonMobil to be profitable. That's a pretty big nut, but it can be done.

Economies of scale have not preserved the dominance of the US auto industry or the photographic film industry. The failure to stay close to customers and innovate to better serve these customers with new technologies, services and business models was rather the reason for the loss of dominance. Dependence on structural barriers to competition is a false hope.

Companies can make it more or less difficult for competitors to enter a market. Product and brand differentiation, branding, advertising and promotion expenses, access to limited sales space, efficiency in production and operations, exemplary and responsive service processes, and strong customer relationships can make it difficult for other companies to compete. However, these so-called structural barriers only offer an advantage in the long term, as they continue to enable and support the effective fulfillment of customer needs.

A unique role for marketing, and possibly the defining role of marketing, is to ensure that investments meet customer needs and generate positive cash flow.

ContriBranding Strategy Insiders: David Stewart, Professor of Marketing and Business Law at President of Loyola Marymount University, Author, Financial Dimensions of Marketing Decisions.

The Blake Project Can Help: Discover your competitive advantage by measuring brand equity

Brand Strategy Insider is a service from The Blake Project: A strategic brand consultancy specializing in brand research, brand strategy, brand growth and branding

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