Final answer:
New entrants in an industry can impact established organizations through increased competition, driving innovation, and forcing improvements. However, they can also pose threats to market share and profitability.
Step-by-step explanation:
When new entrants enter an industry, they can have several effects on established organizations. One of the main impacts is increased competition. New entrants often bring innovative products, services, or pricing strategies to the market, which can attract customers away from existing businesses. This can lead to a decrease in market share and profitability for established organizations. For example, in the airline industry, a new start-up airline offering lower prices may cause the incumbent airline to slash prices in response.
In addition to increased competition, new entrants can also drive innovation and force established organizations to improve their products or services. This is because new entrants may introduce disruptive technologies or business models that challenge traditional approaches. For instance, the introduction of streaming services such as Netflix forced established video rental companies like Blockbuster to adapt or face obsolescence.
Overall, the entry of new players in an industry can have both positive and negative effects on established organizations. It can spur competition and innovation, but it can also pose threats to market share and profitability.