Decisions made by one company impact the decisions of its competitors and vice versa. Patents are being registered for the drugs in circulation, which enables easy resolution of the issue while it protects the new drug from potential competition. As a result, they can create an edge from their experiences, which will help them succeed in the future.

Delta Air Lines, with over 5,400 daily flights, is the second-largest airline in the US. According to the National Funeral Directors Association, a funeral costs $7,323 on average. And if you add a burial plot and flowers, the cost increases to $9,000.

1. A firm considers the action and reaction of the rival firms while determining its price and output levels.
2. That was the initial consolidation in the sector at the top, one that has stuck.
3. Industries where smaller companies have been bought out or merged, or where large corporations dominate, tend to have oligopolies.
4. In the current scenario, the number of these players is increasing.
5. However, no single model can accurately describe the operation of an oligopolistic market because two to ten companies compete in terms of innovation, quantity, price, marketing, and reputation.

Identical or differentiated products

The trend between the periods 1960 – late 1970 showed that Chrysler would announce the price rise first; then General Motors would announce the second price rise. The strategy was that General Motors would announce a price rise less than that of Chrysler. Further, Ford joined them in raising the price, and all three settled to the ford price. However, this oligopoly is blamed as the main cause of the downturn in the US automobile sector. An oligopoly is different from a monopoly, which is dominated by only one major player in the market. In the latter form of structure, businesses exploit the market by raising the prices of the products they have a monopoly in.

In other words, oligopoly is defined as the market strategy that consists of several small numbers of firms. These firms or producers work explicitly to restrict output and thus control the market returns. With an endless stream of new music surfacing in the market, it is obvious that the music industry is one of the most profitable markets. Interestingly, while the record labels are considered significant by the musicians, it is the giant music companies that promote and distribute their music. Unsurprisingly, there are many music companies in the world; however, three are considered the largest. These are Sony Music, Universal Music Group, and Warner Music Group.

Universal Music Group is one of the most innovative music companies that has signed licensing agreements with over 400 platforms worldwide. Warner Music Group employs more than 3,500 people and has an annual revenue of over $4.4 billion. Between them, ACC and Ambuja have 65 million tonnes of annual cement manufacturing capacity. As a combine, this is next only oligopoly examples in india to the 120 million tonnes of UltraTech, from the Aditya Birla Group. Over 1999 and 2000, the Tata Group sold its stake in ACC to Ambuja. In between these two transactions, Grasim (an Aditya Birla company) acquired the cement operations of L&T, which is UltraTech today.

Funeral Services

Mukherjea of Marcellus Investment Managers cites the example of the infant milk powder segment, where, he says, no one can compete with Nestle, partly because advertising is prohibited. Infant Milk Substitutes (IMS) Act, 1992 bans any kind of promotion of infant formula, feeding bottles and infant foods for 0-2 year-old children. The Reliance-Future deal will put Reliance Retail beyond the reach of most players.

News Media

Cement is also a business that is inextricably tied to economic growth, especially in a developing economy like India. It is an indispensable commodity for the building of capital goods and key infrastructure such as highways, ports, airports and real estate, which have a multiplier effect on the economy. A mapping of cement production levels along with economic growth over the past three decades shows that cement manufacturing has indeed risen in tandem with economic growth. So while competition experts do not see companies with a higher share as an automatic threat to the rest of the market or consumers, stock markets also view them favourably in certain cases.

That was the initial consolidation in the sector at the top, one that has stuck. Collaboration on a set price is more advantageous to businesses economically than trying to outbid rivals. Recently, the US Federal Trade Commission, an independent consumer protection agency, has sought the break-up of Facebook, asking it to sell Instagram and WhatsApp.

While it is a childish question, it does provide us with an insight into the oligopolistic nature of the soft drink industry. Even if you don’t go for Pepsi or Coca-Cola, these brands cannot be ignored, as other high-selling beverages like Mountain Dew, Gatorade, 7Up, Fanta, Dasani, Powerade, and more are owned by these two companies. When it comes to revenue, Coca-Cola generates $40 billion annually, as for Pepsi, its revenue was $79 billion in 2021.

A type of oligopoly known as pure or perfect oligopoly develops when a commodity is a uniform in composition. Industries in the FMCG sector, airlines, and apparel are perfect examples of oligopolistic companies such as Coca-Cola – Pepsi, Airbus – Boeing, Nike – Reebok, H&M – Zara, etc. An oligopoly occurs when a small number of relatively large enterprises create similar but slightly different items.

Customers, in turn, have to agree to pay whatever businesses ask for as they have no other place or seller to go to. The competition is limited but entry is often restricted and the actions of each firm affects the others. Electric power is the fundamental source of energy in our digitized world. It is of immense significance to humanity, as the entire world is trying to switch to electricity from fossil fuels.

By following this, even though the scalability of the TV channels will get limited to an extent across those ranges, all the players can coexist, and that too with relative gains. As a result of this oligopoly, the relative cost will decrease for the new foray. Let us take the media sector in the US, where 5-6 players are capturing almost 90% of this sector. At the same time, a 10% share is being captured by the other small players who command the chunk of viewership, including the likes of Viacom, Disney, Time Warner, and NBC.

The music entertainment industry, too, is dominated by only a handful of producers, many of whom also own some of the top movie production companies. There is also a great deal of overlap between the businesses that control the industry. Within the top 15 major production studios, for example, many are subsidiaries of other large media corporations—sometimes the same large media corporations as others on the list. The concentration ratio measures the market share of the largest firms in an industry and is used to detect an oligopoly.