A column on bloomberg.com discusses whether tech firms like Google, Apple, Facebook, and Amazon will be able to maintain their high market shares indefinitely. The column notes that the firms “argue that their dominance is hardly durable because barriers to entry are low for new competitors. As Google is fond of saying, competition is just ‘one click away.’”
a. What does the columnist mean by “barriers to entry”? Name one barrier to entry a new firm would face in competing with:
i. Google in online advertising
ii. Apple in smartphones
iii. Facebook in social media apps
iv. Amazon in online retailing
b. For each barrier to entry you identified in part (a), briefly discuss whether technological change is likely to reduce the importance of the barrier in the long run.