Threat of new entrants or barriers to entry

Barriers to entry, identified as one of the five forces, presents five structural determinants that affect a company’s ability to enter new markets; economies of scale, product differentiation, government as with telecom licences for example, favourable access to the distribution channels and capital requirements (Whittington and Melin, 2005). The government policies and regulations could also impose a significant barrier to entry in the telecom industry. For example, this industry is getting more concerned about the customers’ convenience, setting competitive price structure, invest in corporate social responsibilities which could be difficult to maintain by a new company.

revering entry

After the financial statements are prepared and the books are closed it is often helpful to reverse some of the adjusting entries before recording the regular transactions of the next period. Such entries are called reversing entries. A reversing entry is made at the beginning of the next accounting period and is the exact opposite of the adjusting entry made in the previous period. The recording of reversing entries is an optional step in the accounting cycle.