Bain looked at product differentiation in 20 different industries and found that,
although the importance of product differentiation varied between industries, overall it
was the biggest barrier to new entry. The height of the barrier depended upon factors
such as the amount of advertising, the durability of the product and the extent to which
the reputation of the producer was important in the buying process. Again it should be
stressed that Bain’s conclusions apply only to entry by completely new firms. In the case
of cross-entry, the height of the barrier might well be reduced.