ER06
Market Contestability & Exit Friction
Structural assessment of industry fluidness. Measures the 'Permit/Knowledge Gating' for entrants and the 'Liability/Asset Lock' for incumbents, independent of current market competitiveness.
Composite Score Components
Entry Contestability
Structural hurdles for a new, well-funded player to achieve parity.
0
Permissionless: No licenses, IP, or specialized infrastructure required (e.g., basic retail, generic labor services).
1
Standardized: Requires common certifications or off-the-shelf equipment.
3
Gated: Requires specialized IP, scarce talent, or significant regulatory licensing (e.g., commercial banking, specialized chemicals).
5
Fortress: Requires decade-long capex cycles, unique geographical rights, or sovereign-level approvals (e.g., deep-sea mining, aerospace).
Exit Friction
The cost and complexity of ceasing operations and liquidating capital.
0
Liquid: Assets easily resold; zero environmental or social tail-liabilities.
3
Frictional: Requires moderate severance, contract termination fees, or specialized asset decommissioning.
5
Locked/Enduring: Massive terminal liabilities (e.g., mine reclamation, nuclear decommissioning) or 'Too Big to Fail' social/sovereign mandates prevent exit.
Score Distribution
How 129 industries score on this attribute
0
1
2
3
4
5
5
14
56
52
2
Scoring Notes
v2.0 prioritizes 'Terminal Liability' (Exit) and 'Gating Architecture' (Entry) over simple HHI.
Industry Examples
129 industriesReal industries from our analysis demonstrating each score level for Market Contestability & Exit Friction.
5
Very High / Critical
4
High
Mining of hard coal
ISIC 510
3.2
Extraction of crude petroleum
ISIC 610
3.3
Support activities for petroleum and natural gas extraction
ISIC 910
3.4
49 more industries
Manufacture of refined petroleum products ISIC 1920 Manufacture of soap and detergents, cleaning and polishing preparations, perfumes and toilet preparations ISIC 2023 Manufacture of pharmaceuticals, medicinal chemical and botanical products ISIC 2100 Manufacture of glass and glass products ISIC 2310 Manufacture of basic iron and steel ISIC 2410 Manufacture of structural metal products ISIC 2511 Manufacture of computers and peripheral equipment ISIC 2620 Manufacture of irradiation, electromedical and electrotherapeutic equipment ISIC 2660 Manufacture of motor vehicles ISIC 2910 Building of ships and floating structures ISIC 3011 Manufacture of railway locomotives and rolling stock ISIC 3020 Manufacture of air and spacecraft and related machinery ISIC 3030 Electric power generation, transmission and distribution ISIC 3510 Water collection, treatment and supply ISIC 3600 Construction of roads and railways ISIC 4210 Construction of utility projects ISIC 4220 Other specialized construction activities ISIC 4390 Wholesale of computers, computer peripheral equipment and software ISIC 4651 Retail sale via mail order houses or via Internet ISIC 4791 Sea and coastal freight water transport ISIC 5012 Passenger air transport ISIC 5110 Warehousing and support activities for transportation ISIC 52 Short term accommodation activities ISIC 5510 Event catering ISIC 5621 Software publishing ISIC 5820 Sound recording and music publishing activities ISIC 5920 Wired telecommunications activities ISIC 6110 Wireless telecommunications activities ISIC 6120 Computer programming activities ISIC 6201 Data processing, hosting and related activities ISIC 6311 Other monetary intermediation ISIC 6419 Life insurance ISIC 6511 Non-life insurance ISIC 6512 Other activities auxiliary to financial service activities ISIC 6619 Real estate activities with own or leased property ISIC 6810 Real estate activities on a fee or contract basis ISIC 6820 Packaging activities ISIC 8292 Defence activities ISIC 8422 Higher education ISIC 8530 Hospital activities ISIC 8610 Medical and dental practice activities ISIC 8620 Other human health activities ISIC 8690 Residential nursing care facilities ISIC 8710 Creative, arts and entertainment activities ISIC 9000 Library and archives activities ISIC 9101 Gambling and betting activities ISIC 9200 Operation of sports facilities ISIC 9311 Repair of computers and peripheral equipment ISIC 9511 Hairdressing and other beauty treatment ISIC 9602
3
Moderate
Growing of cereals (except rice), leguminous crops and oil seeds
ISIC 111
3
Mixed farming
ISIC 150
3.1
Marine fishing
ISIC 311
3.2
53 more industries
Processing and preserving of meat ISIC 1010 Processing and preserving of fish, crustaceans and molluscs ISIC 1020 Manufacture of vegetable and animal oils and fats ISIC 1040 Manufacture of dairy products ISIC 1050 Distilling, rectifying and blending of spirits ISIC 1101 Preparation and spinning of textile fibres ISIC 1311 Manufacture of wearing apparel, except fur apparel ISIC 1410 Printing ISIC 1811 Manufacture of plastics products ISIC 2220 Manufacture of communication equipment ISIC 2630 Manufacture of consumer electronics ISIC 2640 Manufacture of measuring, testing, navigating and control equipment ISIC 2651 Manufacture of electric motors, generators, transformers and electricity distribution and control apparatus ISIC 2710 Manufacture of batteries and accumulators ISIC 2720 Manufacture of domestic appliances ISIC 2750 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines ISIC 2811 Manufacture of lifting and handling equipment ISIC 2816 Manufacture of bicycles and invalid carriages ISIC 3092 Manufacture of jewellery and related articles ISIC 3211 Manufacture of medical and dental instruments and supplies ISIC 3250 Repair of fabricated metal products ISIC 3311 Materials recovery ISIC 3830 Construction of buildings ISIC 4100 Electrical installation ISIC 4321 Plumbing, heat and air-conditioning installation ISIC 4322 Sale of motor vehicles ISIC 4510 Retail sale in non-specialized stores with food, beverages or tobacco predominating ISIC 4711 Retail sale of clothing, footwear and leather articles in specialized stores ISIC 4771 Freight transport by road ISIC 4923 Warehousing and storage ISIC 5210 Courier activities ISIC 5320 Accommodation ISIC 55 Restaurants and mobile food service activities ISIC 5610 Beverage serving activities ISIC 5630 Motion picture, video and television programme production activities ISIC 5911 Television programming and broadcasting activities ISIC 6020 Computer consultancy and computer facilities management activities ISIC 6202 Web portals ISIC 6312 Legal activities ISIC 6910 Management consultancy activities ISIC 7020 Architectural and engineering activities and related technical consultancy ISIC 7110 Technical testing and analysis ISIC 7120 Research and experimental development on natural sciences and engineering ISIC 7210 Market research and public opinion polling ISIC 7320 Renting of video tapes and disks ISIC 7722 Private security activities ISIC 8010 General cleaning of buildings ISIC 8121 Landscape care and maintenance service activities ISIC 8130 Combined office administrative service activities ISIC 8211 Organization of conventions and trade shows ISIC 8230 Activities of collection agencies and credit bureaus ISIC 8291 Social work activities without accommodation for the elderly and disabled ISIC 8810 Activities of professional membership organizations ISIC 9412
2
Low
Manufacture of parts and accessories for motor vehicles
ISIC 2930
3.1
Manufacture of furniture
ISIC 3100
2.8
Building completion and finishing
ISIC 4330
2.7
11 more industries
Maintenance and repair of motor vehicles ISIC 4520 Wholesale trade, except of motor vehicles and motorcycles ISIC 46 Other credit granting ISIC 6492 Activities of insurance agents and brokers ISIC 6622 Accounting, bookkeeping and auditing activities; tax consultancy ISIC 6920 Specialized design activities ISIC 7410 Veterinary activities ISIC 7500 Activities of employment placement agencies ISIC 7810 Travel agency activities ISIC 7911 Combined facilities support activities ISIC 8110 Activities of call centres ISIC 8220Archetype-Specific Considerations
This attribute has special risk drivers when applied to certain industry archetypes:
DIG
Digital, IP & Knowledge
Driven by bits, code, and cognition. Zero marginal cost.
Risk Driver: Network Effect Lock-in (Multi-sided platforms)
UTL
Utility, Grid & Network
Driven by continuous capacity, uptime, and infrastructure.
Risk Driver: Regulated Asset Base (RAB) Protection
BIO
Bio-Organic & Perishable
Driven by biology, nature, and decay. Time is the enemy.
Risk Driver: Biosecurity & Sanitary Gating
Related Strategies
Strategies that incorporate Functional & Economic Role pillar analysis (17 strategies):
Playbooks Using This Attribute
1 playbook use ER06 in their feasibility checks:
Rules Using This Attribute
3 risk rules use ER06 in their trigger conditions: