THREAT OF ENTRY. New entrants to an industry bring
new capacity and a desire to gain market share that puts
pressure on prices, costs, and the rate of investment necessary
to compete. Particularly when new entrants are
diversifying from other markets, they can leverage existing
capabilities and cash flows to shake up competition, as
Pepsi did when it entered the bottled water industry, Microsoft
did when it began to offer internet browsers, and Apple
did when it entered the music distribution business.