What Industry Structure Can Reveal About Competition And Antitrust Implications (Forbes.com, August 8, 2024)

Check out my latest article in forbes.com:

Some takeaways from this article:
1. Industry Structure as a Competitive Indicator: The article suggests using industry structure as an alternative to Michael Porter’s Five Forces model for understanding competition.
2. Measuring Industry Concentration: Industry concentration can be measured using the four-firm concentration ratio (CR4) or the Herfindahl-Hirschman Index (HHI). The CR4 ratio, which calculates the market share of the four largest firms, helps assess industry concentration levels — from fragmented to concentrated (consolidated).
3. Antitrust Implications: Antitrust laws promote fair competition and prevent monopolistic practices. The Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) enforce these laws in the U.S. They use metrics like the HHI to evaluate mergers and acquisitions to ensure they do not reduce market competition.
4. Strategic Considerations for Businesses: Companies in fragmented industries should focus on cost reduction and efficiency to withstand price wars and maintain strategic flexibility to anticipate new competitors. In contrast, firms in concentrated industries should emphasize non-price competition through innovation, branding, and superior customer service.

See the complete article at:
https://www.forbes.com/sites/forbesbusinesscouncil/2024/08/08/what-industry-structure-can-reveal-about-competition-and-antitrust-implications/?utm_content=303282518&utm_medium=social&utm_source=facebook&hss_channel=fbp-120847875303511