Market Dominance as a Precursor of Market Failure: Emerging Technologies and the Competitive Advantage of New Entrants

Dominant players in a number of industries have pursued policies that may once have been effective, but that now make their markets attractive targets for new entrants. The strategies of new entrants rely on lower overhead costs, new technologies, and alternative distribution channels, and the active targeting of profitable customers. Dominant firms will struggle to respond to the threats, and may find that their existing resources, customers, and contracts lim it their ability to react.