Barriers to Entry

A Science & Engineering OnLine Laboratory Notebook

This is the laboratory notebook of Damon Bruccoleri. Here you will find engrossing, thoughtful and fun commentary/opinion. Leave a comment and let others know what you think about any post here, view my photo gallery, or sign my guestbook.

"...one of the strongest motives that lead men to art and science is escape from everyday life with its painful crudity and hopeless dreariness, from the fetters of one's own ever-shifting desires. A finely tempered nature longs to escape from the personal life into the world of objective perception and thought." - Albert Einstein

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Friday, October 26, 2007

Barriers to Entry

One of the problems an established company might face is disruptive technologies allowing new startup companies coming into their established market, eroding their market share and profits. There are many ways a large company could protect their market share or even grow it. Patents of course are one obvious answer. Another is regulation.

A large company has a problem. Its large. A small company can be nimble and respond to market changes. That is one way a small company can take market share from a larger, or more entrenched player. New companies take advantage of this asset when they attack a new market. The trick for the older more established company is to turn a liability into a asset. A large company can protect its market from new players by creating a morass of bureaucracy and regulation.

Over the years I have been following an interesting story. The internet has been a revolution and may be the downfall of the conventional newspaper and music distribution businesses. Time will tell on those markets. I have been wondering about the credit reporting agencies though. Over the last several years there has been a flap about consumer data security. Data was leaked to thieves and other nefarious entities. Personally I have received at least two letter in the last few years apologizing to me for some leak of some of my personal credit information. Perhaps you have gotten one of these as well. These leaks have been reported in the news and investigated by Congressional committees. The credit reporting agencies are now more tightly regulated in how and to whom they can distribute the data they collect on us, the consumer.

Now I am not claiming the credit reporting agencies created these situations. Perhaps these situations were there to begin with and the credit reporting agencies allowed attention to be drawn to them. I will say that for the four major credit reporting agencies, all whom are large companies, that the resulting bureaucracy can only help them.

Otherwise, how hard would it be for some internet startup to create a database to connect the credit card companies so they could share consumer data?

dbruccoleri at 2:05 PM | (4) Comments | Add a comment | Permalink

Commments

Lou said...

I seemed to have a hard time following your article. Can you focus more on how large companies can protect their market share. There seemed to be dissociation of ideas.

Monday, November 05, 2007 8:04 AM

damon said...

Sorry Lou. That suggestion is well taken. My next blog will be more concrete. The problem is in creating an interesting story around it. It takes some effort, even though I enjoy it.

Monday, November 05, 2007 8:06 AM

Lou said...

Be kind and nice to your wife...family is important and even more compared to our work.

Wednesday, November 28, 2007 8:20 AM

Willy Nero said...

Damon's, I am a junior technology student. I have few servo's sitting at my basement. I have also few PIC microcontrollers and some transmitter and receiver IC. I have hacked into an RC car and just got to the bare chassis. I really wanted to do my first RC car programming. But I have never controlled a servo. I am sure am that programmed the first all digital servo can put a demo program in his site and do with the PIC. Can you whip a program like this with the servo turning only left, right, stright and back. No fancy staff like PID controlling or fussy logic. Just come bare basics. Thanks.

Thursday, March 13, 2008 12:15 AM