High sunk costs limit competition

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High sunk costs make it difficult for a competitor to enter a new market, because they have to commit money up front with no guarantee of returns in the end. High sunk costs positively affect Investment Banking. …

Five Forces Analysis Survey This statement has a significant impact? Has a positive impact over the long term? Has a negative impact over the long term? Has a positive impact over the short term? Has a negative impact over the short term? This statement leads to reduced costs? This statement leads to increased costs? This statement leads to increased profits? This statement leads to decreased profits? Easy to defend this advantage? Easy to overcome this disadvantage? Difficult to defend advantage? Difficult to overcome this disadvantage? Affected Investments

Threat of New Competitors: High sunk costs limit competition
High sunk costs make it difficult for a competitor to enter a new market, because they have to commit money up front with no guarantee of returns in the end. High sunk costs positively affect Investment Banking.

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