Jack Teeling Barriers To Entry

Barriers to entry are factors that prevent a startup from entering a particular market. Jack and Stephen Teeling faced two kinds of barriers to entry in the Irish whiskey business in 2012. The two barriers to entry were capital requirements, such as financial and human capital, and access to distribution channels. As in any industry, there are costs for starting and operating a business. Some of the high capital costs Jack and Stephen incurred are mostly start-up costs; High capital costs typically occur when setting up for the first time. These cost included: buying whiskey, building a distillery, and various other start-up losses. In 2012, Jack extracted an agreement from Jim Beam to sell him and his brother sixteen thousand barrels of aged Cooley whiskey. As Jack stated in the article, “if you don’t have whiskey, you’re not in the whiskey business,” so the agreement he had with Beam helped start up the new company.
Human capital is a barrier to entry because there are payments such as taxes, benefits and other costs that are given to the whiskey specialist. In the whiskey business it is extremely important to find experts that have skills, knowledge, and experience. An …show more content…
As Brendan Greeley mentioned in the beginning of the article, Jack Teeling was pitching his products to America’s trendy mixologists in hopes of getting in on the growing craft liquor movement. Jack wants his whiskey to be sold in New York City bars so he introduced his products to bartenders. There is a barrier to entry because new entrant’s need to obtain distribution for the products. This is the main reason Jack is meeting up with bartenders, so he can persuade them to accept and sell his products at the bars. This may include providing extra incentives to the distribution channels which may reduce profit, but will be beneficial for him to establish his market position and gain