Industries Under Fire and Stock Performance Consumers’ Uncontrollable Habits Prove to Be Good Investments

Maintaining a Competitive Position

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Another example [of a high barrier to entry business] would be the defense industry. It’s very hard to get a government contract, not because the government doesn’t entertain new entrants, but because the rules of bidding require assets in place in order to bid. If you wanted to compete with Boeing on the B-1 bomber, you’d have to build an entire facility and hire all the necessary engineers and production people to assure the government you could actually build a better B-1 bomber – all just to enter a bid that you may never win. That’s a positive situation for a company like Boeing.
Source: http://www.valueinvestorinsight.com/