Understanding mobility barriers
In a given marketplace we can think of different firms as having different positions or ways of competing. These may be underpinned by different resources, that allow the companies to compete in ways that are different from their competitors.
Mobility barriers are things that make it difficult for existing companies to change and become more (or less) like other firms. They mean that the positions that firms have taken are at least semi-permanent – while it may be possible for firms to adjust their operations, it is not easy to do so.
Examples of mobility barriers
Existing commitments of resources that are difficult to re-configure
One form of mobility barriers is the existing commitments of resources that are difficult to re-configure. A company may have bought machinery for example that allows for a particular way of competing but would be redundant if the company was to change to a different approach.
Required resources and capabilities that can’t be obtained
Another mobility barrier is resources that can’t be obtained, or are very costly to acquire. For example, competitors may have developed a particular capability over many years, and it would be challenging for a new firm to be able to match that ability.
Existing brand reputation for specific offerings
Another resource that is hard to adapt is a company brand. If the company is well known for a particular offering, then adapting itself to compete in a different way is not easy. PErceptions regarding the old firm may take many years to change.
Existing long term customers that would be lost if the firm were to change
A final mobility barrier is the possibility of long-term customers that may be lost if the company were to change. Customers may be specifically buying the product because of the firm’s existing position. If the company were to change, it may have to acquire a set of new customers.
How mobility barriers related to strategic groups
Mobility barriers are related to the concept of strategic groups. Strategic groups are groupings of firms in an industry that have a similar strategic position. For example, they may be competing in a similar way or have similar underlying resources. Mobility barriers are the things that keep firms in the grouping together – they make it difficult for these firms to move to other positions, and likewise, make it difficult for other firms to enter this segment of the market.
For example, in the pharmaceutical industry, there are different groupings of firms, including drug developing companies and generic manufacturers. The mobility barriers of not having drug development capabilities prevent the generic manufacturers from encroaching on the drug development companies.
Difference between mobility barriers and industry entry barriers
While mobility barriers may sound very similar to industry entry barriers, mobility and entry barriers are slightly different. Industry entry barriers make it difficult for a new firm to enter the market. Mobility barriers make it difficult for existing firms (i.e., those companies already in an industry) to change the way that they compete.