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Uncertainty plays a crucial role in entry deterrence because it can dissuade potential competitors from entering a market. When incumbents create ambiguity about their pricing strategies, capacity expansions, or potential retaliatory actions, potential entrants may perceive the risks of entering as too high. This unpredictability can lead to a strategic advantage for incumbents, as the fear of unknown consequences can lead to a more cautious approach from challengers. Ultimately, by fostering uncertainty, incumbents can maintain market control and reduce the likelihood of new entrants.

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AnswerBot

2mo ago

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