The strategy of monopolies to restrict new entrants by raising prices is usually not a direct operation, but a combination of market control to form systemic barriers. The following is its core logic and specific means： --- ###**Core logic: Use monopoly profits to build a moat** The excess profits brought about by the high pricing of monopolies will be used to consolidate their market position and form barriers that are difficult for new entrants to cross. This process may involve the following links： --- ### **1. Price strategy and Cost squeeze** -**Misleading price signals**: Monopolists raise prices to release signals of "industry profits" to attract potential competitors to enter, and then expel them through cliff-edge price reductions (such as relying on scale effects to push prices below the cost line of new entrants). Typical cases include Amazon's early targeting of Diapers. com's predatory pricing. -**Differential pricing**: Implement low prices for price-sensitive customers (such as the target market of new entrants), while maintaining high prices for brand loyal customers, dividing the market and compressing the living space of new entrants. --- ### **2. Resource monopoly and Supply chain control** -**Upstream blockade**: By controlling raw materials, patented technologies, or key suppliers (such as signing exclusive agreements), forcing new entrants to pay higher costs. For example, De Beer once monopolized diamond mining sources, raising the threshold for industry entry. -**Downstream channel binding**: Sign exclusive agreements with distributors/retailers, or squeeze competitors' exposure opportunities through their own channels (such as Apple's physical store + online store). --- ### **3. Economies of scale and Sunk Cost Barriers** -**Reinvestment of excess profits**: Invest monopoly profits in research and development (such as the patent wall of pharmaceutical giant Pfizer), advertising (Coca-Cola's品牌2 billion annual brand investment) or production capacity expansion to form a scale advantage that new entrants cannot replicate. -**Industry standard manipulation**: Through leading technical standards (such as Qualcomm's layout of 5G patents), new entrants are forced to pay high license fees and increase their costs in disguise. --- ### **4. Consumer lock-in effect** - **Ecological closed-loop construction**: Through product bundling (Microsoft Windows + Office), data monopoly (Google Search + Android system) or user habit cultivation (Netflix content library), user conversion costs are increased, making it difficult for new entrants to obtain customers. --- ###**Legal risks and Avoidance methods** Monopolies often operate on the edge of the law, such as： -**Selective price reduction**: Only implement low prices in specific regions or customer groups to avoid a comprehensive price war triggering antitrust investigations. -**Innovative packaging**: The exclusive agreement is disguised as a "strategic cooperation", such as the exclusive iPhone sales agreement signed by Apple and the operator. -**Lobbying and compliance game**: Influence legislation through political lobbying (such as the intervention of U.S. telecommunications giants in network neutrality), or use judicial procedures in the European Union and other places to delay antitrust rulings. --- ###**Case study: Intel and AMD's Chip War** -**Strategic combination**: Intel paid rebates (essentially exclusive agreements) to computer manufacturers such as Dell and HP in the 2000s, requiring them not to purchase AMD chips, while maintaining high-end CPU prices to obtain monopoly profits. -**Result**: AMD's market share has been suppressed below 20% for a long time, and the situation did not gradually change until the EU issued a 1.44 billion euro fine. --- ###**The path to breaking the game for new entrants** 1. **Differentiated market segments**: Tesla cut into high-end electric vehicles in the early days, avoiding head-on competition with traditional car companies. 2. **Technological disruption**: Zoom has achieved a breakthrough under the monopoly of Cisco Cisco through a more efficient video compression algorithm. 3. **Regulatory leverage**: Spotify complained to the European Union about the 30% draw of Apple's App Store, forcing Apple to adjust the rules. The monopoly's high-priced strategy is essentially a manifestation of systemic advantages, and new entrants need to break the existing pattern through technological innovation or business model reconstruction. The strengthening of antitrust supervision (such as the EU's "Digital Market Act") is reshaping competition boundaries, and the living space of traditional monopoly strategies is gradually narrowing.