Newcomers are likely to fear expected retaliation if

a.

Incumbents possess substantial resources to fight back, including excess cash and unused borrowing power, available productive capacity, or clout with distribution channels and customers

b.

Incumbents have previously responded vigorously to new entrants

c.

All of the above

d.

Industry growth is slow so newcomers can gain volume only by taking it from incumbents

e.

Incumbents seem likely to cut prices to retain market share at all costs or if the industry has high fixed costs, which create a strong motivation to drop prices to fill excess capacity