You can remove this barrier to entry but it may well kill you…
Any organisation that can create a barrier to entry which prevents new competitors entering the market can, in theory, keep prices high.
Economies of scale (think Airbus or Boeing), branding (think Apple) and distribution channels (think Coke) are all excellent examples of barriers to entry but one of the toughest barriers to break through are government licenses.
If a licence is needed to operate in that industry then that is the ultimate barrier. After all, without the license the company can’t operate.
Japan is the home of sushi and as you would expect some of the top sushi restaurants can be found in Tokyo.
Sushi is fish and we all know that fish is healthy for you. It may come as a surprise then that one particular sushi delicacy in Japan could end up killing you rather quickly if it is prepared incorrectly.
Certain parts of the poisonous blowfish are considered by many to be the ultimate in sushi. It tastes gorgeous although to be honest I’ve never tried it so I’m taking somebody else’s word for this.
I’ve never tried it because I’ve never had the opportunity although even if I did have the opportunity I would have a few doubts. The reason is that as well as the edible parts of the fish, some of the organs of the fish are filled with poison called tetrododoxin which is more deadly than cyanide.
Now, if you’re eating blowfish then one thing for sure is that you want the chef to know what he or she is doing. You don’t want them making a little slip of the knife and including by mistake some of the poison as before you have a chance to say “does this fish taste a bit funny to you?” you would be on your way to a quick death.
The Japanese government have therefore heavily regulated this part of the sushi industry and there are only a handful of locations that have a licence to prepare and serve blowfish.
In October though new laws are coming into place which remove the need for a licence (or to use business strategy terminology, remove a barrier to entry).
So the good news for anyone that fancies trying some of the blowfish is that it’s likely to become a bit cheaper after October. The question though is whether price will be the key decision making factor when people are deciding to eat a meal which if prepared incorrectly could quickly kill you…