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i don’t understand why low competition is incorrect i think low competition means low fragmentation and less powerful suppliers
Ken Garrett says
Low competition means that you might have the market to yourself or at worst share with poor companies. Therefore, it is relatively easy to enter.
Low fragmentation means that there are few players in the market. So if the market were divided between only two, each might have around 50%, so they will be big and powerful and will resist new entrants very strongly.
A highly fragmemted market implies many suppliers (the market has been broekn down and sharedmby many suppliers). Low fragmemtation means that there are a few large, powerful suppliers.
Thanks for the reply. So how does few large suppliers raise the bar for new entrants? Is it that those suppliers have monopolies?
They are big and powerful and therefore are often able to crush new entrants.
I don’t understand what is meant by market fragmentation. Can you elaborate on it please?
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