An example of a unique legal advantage would be a drug company that is the first to discover and successfully manufacture a medication to treat a certain disease.
However, other companies may not be able to enter the market due to another barrier to entry, intellectual property (IP) rights.
Considering that, companies can decide between two main approaches, i.e. competitive strategies :[1] • First approach is directed towards development and implementation of competition oriented strategies whose main goal is to create “better state of peace” between the market competitors.
• Second approach is directed towards development of strategies whose main goal is to weaken, eliminate or destroy the competitor company.
In cases where there are no significant barriers to enter the market present, dominant companies will refrain from setting supracompetitive prices, at least in the long run.
Price regulation and state intervention can thus discourage potential investments since the rewards are lower in less risky environment.
In those cases authorities can fine the company setting supracompetitive prices in order to stop excessive charging.
But these types of activities can be implemented periodically and in the end don't represent the long-term solution for the problem of supracompetitive pricing.
Those primarily include the presence of predatory company in multiple markets with multiple products and services, information distribution where possible new entrants and existing competition don't recognize the signs of predatory strategy and presence of market conditions and entry barriers that enable supracompetitive pricing.
[7] Claims of predation and supracompetitive pricing are not uncommon in dynamic market, but in many cases those are just attempts of the competitors to raise their rivals’ cost .
That task is becoming more complex and difficult with the possible presence of predatory marketing strategy, i.e. supracompetitive pricing (Gundlach, 1995).