barriers to entry
Hello Mike. Thanks for writing back. My barrier to entry observation was the barrier for Charles Daly into the Hi Power market with its own product, and not to the 1911. Charles Daly's 1911 entered the market successfully and could be a good model for the CD Hi Power.
According to Porter, the barrier to entry includes the “[l]earning or experience curve: in some businesses there is an observed tendency for unit costs to decline as the firm gains more cumulative experience in producing a product...Experience is just a name for certain kinds of technological change and may apply not only to production but also to distribution , logistics, and other functions.”
Another barrier to entry is the economy of scale or mass production at a very narrow profit margin.
An existing entity/firm (like Browning) can fight back against an entrant, like Charles Daly, by trying to slash prices and sell massive numbers of units.
Again according to Porter, in a competitive industry, a “[t]hreatened entity can fight the emerging industry (or competitor)...” by “foregoing profits by lowering prices…or making R&D investments aimed at making the threatened product or service more competitive…If the threatened industry chooses to invest to try to bring its quality- adjusted costs down, it is clear that the target at which learning and scale-related cost reduction in the emerging industry must shoot is a moving one.” Here, from the looks of it, the big players, Browning and FN were not able to fight back. FN tried to sell less expensive Hi Powers at the $400 range to block the new, economical Hi Powers from Charles Daly, Arcus, and FM Argentina.
I could be mistaken, but it looks like FN gave up trying to block Charles Daly's entry into the HP market. Arcus dropped out of the US HP market. Browning HAS NOT even tried to block Charles Daly by flooding the market with $300 Hi Powers. Browning sells Hi Powers for $800+. So, as Judo techniques in production go, Charles Daly created a niche for itself by selling those $300 Hi Powers, a terrain on which FN and Browning could not compete. Yes, I understand that selling Hi Powers at the $280 range is not profitable for Charles Daly. Note the silver lining- Charles Daly moved into that gulf between the the $325 FM Hi Power and the $800 Browning, establishing a foothold.
CZ-USA went through a similar learning curve period with its CZ75 and other variants at the $300 range in order to establish brand recognition and a niche. It achieved brand awareness. Today, the CZ family has been a success and those pistols sell for upward of $400.
What I mean to say is don't throw out the baby with the bath water. Once CD leaves the Hi Power market, the sole firm will be Browning-again- at $800, leaving a gap in the $300-$800 range.
If the FEG/KBI Hi Power was a success, when lower manufacturing was offered in Hungary, that and the Armscor 1911 experience might be road maps for future Hi Power production for Charles Daly.
Maybe, another reason for CD to drop the HP is to focus on more profitable market segments. That's understandable. I encourage CD to return to the HP market someday.