A third area in Porter’s five forces framework is new entries, entry barriers and resulting degrees of rivalry in an industry. They are presented in a combined approach in this subsection because of their interrelations (Porter, 1985, pp. 5-11).

In railway transportation an initial entry barrier arises from the limited availability of railway network and station slots. Most attractive network slots are often already served by incumbents and only a small amount of slots is accessible for new entrants in most countries. Therefore, fair distribution of limited infrastructure capacity is essential. Second, an entry into the TOC business involves a high degree of capital requirements for the initial investment in rolling stock. The procurement process of new rolling stock lasts between two and five years depending on the product choice and on available capacities of rolling stock OEMs. For a train operating company this seems to be an unsatisfying long time frame. However, markets for second-hand rolling stock hardly exist.

Economies of scale, scope and density and as well as network externalities create additional entry barriers in the long-distance passenger rail transport business. One can conclude that size is an important factor in railways. Because leveraging those advantages takes time, those production-related advantages seem to be important in a far developed and liberalized European market and not in the early beginnings of rail reforms. However, early exploitation can increase strategic advantages.