in the united states, which type of industry is often considered part of an oligopoly

In The United States, Which Type Of Industry Is Often Considered Part Of An Oligopoly?

Business 23 November 2023 5 Mins Read

In The United States, Which type of Industry Is Often Considered Part Of An Oligopoly?

Several industries in the U.S. have an oligopoly market. But which companies are part of such a market? 

Read this article to discover the signs that make a market part of an oligopoly. Also, we have listed different industries in the USA that come under the oligopoly structure. 

Signs An Industry Shows Defining Itself As A Part Of Oligopoly

Many experts consider the cell carrier services to be under oligopoly in the U.S. However, the cell services are not the only oligopolistic markets. There are other markets as well. However, apart from the oligopolistic structure in the cell service industry, other industries in the U.S. also have an oligopolistic structure. 

Oligopoly, to some extent, has a similar ring to it when compared to perfect market competition. An ideal competition economic structure is defined by the consumers having m multiple choices for similar items. This structure follows a consumer-driven system where consumers’ choices can drive and bind the producers and cellars. 

Oligopolies consist of specific choices and prices set by consumers. Oligopoly exists between some of the largest companies that dominate the industry. These companies create a difficult entry barrier for the smaller competitors and overshadow them. They outperform the sales and performances of other companies. How? Here are some reasons –

High Brand Value

The brand identity and value of larger-sized businesses are more ingrained inside the minds of the consumers. So, presumably, the higher competition exists only between the companies that are on top. They also have the power to decide the product pricing.

Companies Control Pricing

So, if we follow the previous explanation, it leads to the conclusion that consumers do not have complete control over product pricing. The consumers in such a market have options for different products in a specific price range. The companies, in this case, decide the price range of the products. 

Expansion

A primary feature of an oligopolistic setting is that a set of companies must dominate the market, although different smaller companies already exist. These companies also expand themselves into other businesses. Eventually, they also amalgam other industries with themselves. 

Innovation & Improvisations

The companies on top are always competing. So, they have to maintain specific standards of product quality to maintain their place for specific types of consumers in the market. Improvisation and innovation are two main techniques to succeed in such a market and stay in the competition. 

In The United States, Which Type Of Industry Is Often Considered Part Of An Oligopoly?

Coming to the central question of this article –In The United States, Which Type Of Industry Is Often Considered Part Of An Oligopoly? Well, If we look into the computer operating system of the U.S. Economy, which the biggest giants like Google and Apple Inc dominate. 

These two companies are potential rivals in the market of operating system business. However, their innovative techniques and the motive to improvise have put them in a cooperative and competitive position where they hold the market. 

Now, I will discuss a few industries in the U.S. that are parts of an oligopolistic market structure. In most cases, the business history of the U.S. has seen oligopoly in industries such as railroad, steel manufacturing, oil, grocery store chains, tire manufacturing, and wireless carriers. But what are the current industries that are supposedly parts of an oligopoly market?

1. Entertainment Industries

The most notable examples of oligopolies in today’s time are in some of the U.S. film, T.V., and recorded music industries. The trend started in 1980, and most of the industries are starting to be dominated by two or three firms. Merger agreements between some of the highest players also caused industries to consolidate. 

You will find a better picture of the same if you take an in-depth look at the film industry. There are not so many companies in the film industry with huge control over the entire market share. There are a few ( 4 to 5 ) conglomerate companies that dominate the film industry. 

Some worth mentioning names would be -The Walt Disney Company, NBCUniversal, WarnerMedia, Sony, and Viacom. Thanks to Marvel, in 2018 only, The Walt Disney Company had surpassed a number of $7 billion. 

Most of these companies have engraved themselves in the minds of the consumers with their high brand authority. They are coming up with innovative ideas for new films and T.V. shows. You can check the Marvel and Star Wars movie lineups and the T.V. series lineups. 

Also, if we talk about consuming a business in the industry, we all know the fight Disney had to fight with Comcast to buy 20th Century Fox. Disney bought $71.3 billion.

2. Wireless Carriers

The USA wireless carriers industry shows a high concentration of market shares owned by merely four different companies – AT&T, Sprint-Nextel, T-Mobile, and Verizon. The entire market share would be over 98%. The industry being penetrated creates a problem for the consumers – which are – highly concentrated fees, hidden overcharges, etc. 

Most of the consumers of this industry are constantly locked forever with these companies with a meagre recourse for such oligopolistic etiquette.  

3. USA Domestic Airlines Oligopoly

There is no need to argue. The USA domestic airline industry is basically an oligopoly. Two thousand seventeen data shows that Delta Air Lines, American Airlines, Southwest Airlines, and United Airlines combined have flown almost 80% of the total passengers in that year. 

The industry had faced an extensive consolidation, and many new airlines tried and failed to enter the industry. But the flight tickets are getting costlier, even as we speak. Despite an increase in the price of fuel, there has been a sharp growth in flight ticket prices, showing the control the few airline companies have over the market. So, yes, this market, too, is a part of an oligopoly. 

4. Music Labels

Yes, there are many labels that create music for specific genres and audiences. But the majority of music production contracts go to the major music labels – Universal Music Group, Sony BMG, and Warner Music Group. Also, we see the sign of expansion in this industry as EMI became a part of Universal Music Group in 2012.

Bottom Line

So, in response to your question, we have identified several industries that come under an oligopoly structure. These industries include entertainment industries, wireless carriers, domestic airlines, and popular music labels. These industries and the companies in them show the signs that industry must have. 

Hopefully, you have found your answers. In case you need further assistance, please comment below.

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business market structure oligopoly

Shahnawaz is a passionate and professional Content writer. He loves to read, write, draw and share his knowledge in different niches like Technology, Cryptocurrency, Travel,Social Media, Social Media Marketing, and Healthcare.

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