- Predatory Pricing and Limit Pricing– Firms that have lower costs are able to set costs extremely low so competitors are unable to compete.
- Advertising – Large firms can spread the fixed costs of advertising so advertising cost is low ( economies of scale) while new firms will find it hard to do this.
- Branding– Through advertising and allows these big firms to show their unique characteristics making demand more inelastic.
- Integration – grow in size they can integrate both horizontally and vertically(forward and backwards) enabling them to pursue predatory pricing.
- Research and Development– These big firms can increase their expenditure by developing new methods that would create new products to edge over their competitors.
- Multiplicity of Brands – many customers like to change brands so it is good for a firm to own a number of brands from different markets. This should restrict the new firms from entering.
- Non Price Competition – If they help to increase customer satisfaction this would allow them to avoid price war and build up brand loyalty.