Hey, what is going on guys? Rishabh is here back with another awesome post “How to create a monopoly in our business?”. This time let’s talk about monopoly in business.Every businessman and Entrepreneurs want to create an entry barrier in their business, the scale of business doesn’t matter.Entry barrier means to create or make barriers to entry in your business, so nobody can enter easily into your business.Everybody wants to become a king in their field or any business, so they have to need to create barriers.there are some examples of entry barriers- Scale, Investment, Branded differentiation, Execution and most important is brand equity. As we talk about brand equity in our previous topic, if you did not read that article then you can read that article by click here.
There are some ways to create monopoly in business
Intellectual property protection-
Intellectual property protection refers to creations of the reason or purpose for which a monopoly is assigned to designated owners by law.In other words, intellectual property protection gives the copyright or trademark on his/her copyrightable works, ideas, discoveries, and inventions.
Examples of intellectual property protection -The idea that the secret formula for Coca-Cola is only known by two people.this is the best example of it, because it helps the coca-cola to create monopoly in their market that’s why nobody can ever try to compete with coca-cola because they have no idea about the secret syrup of coca-cola.
Patent and Licenses-
Patents protect the rights of inventors. A patent is a 20-year exclusive property right granted by the PTO for an invention.Licenses are contracts that transfer IP rights from the owner of the rights (the Licensor) to a third party who wants to use them (the Licensee).In the patent and licenses. it gives the ownership right of product and no one can produce or manufactured that product, so it creates a monopoly in their business because only he has the right to produce that product and sells at any cost.
Distribution Network –
A distribution network is an interrelated arrangement of people, storage facilities and transportation systems that move goods and services from producers to consumers. A distribution network is a system a company uses to get products from the manufacturer to the retailer.A fast and reliable distribution network is essential for successful business because customers must be able to get products and services when they want them.
A right reserved exclusively for a particular person or group.The exclusive right also helps to create an entry barrier by selling that product or produce that product which has them an exclusive right to that product, so nobody can sell that product so it creates barrier itself.
Microsoft is the biggest example of exclusive right, The founder of Microsoft bill gates creates the entry barrier in their field.That’s why nobody enters in their business.
Economies of scale-
When more units of a good or a service can be produced on a larger scale, on average fewer input costs, economies of scale (ES) are said to be achieved. Alternatively, this means that as a company grows and production units increase, a company will have a better chance to decrease its costs. According to this theory, economic growth may be achieved when economies of scale are realized.