Entry deterrence is an important strategy in competitive economic world. Especially, its importance increases in the industry where technological penetration is not so difficult.
The purpose of this study is to investigate the role and property of product durability as a strategic entry barrier. Previous studies on product durability focus on the relation of market structure an durability choice. Now, we are to show the role of durability as an entry barrier by adding the entry threat to the market structure assumed by previous studies.
The major findings of the study are as follows.
1) Entry barrier is higher as the product is more durable.
2) In producing durable goods, present product volume is increased as the impact of entry threat.
3) In deterring entry with durability choice, its effect is increased as entry barrier resulting from durability is lower
Further researches are needed to extend the practical implications of result as generalising our model.