While Southwest Airlines is the world’s largest low-cost carrier, with over $21 billion in annual revenue, United Airlines operates a large domestic and international route network spanning six continents. As of 2018, there were 58 airlines in the US, out of which 17 were classified as major carriers with more than $1 billion in annual revenue. However, nearly 55% of the US airline revenue comes from the top 4 airlines.

Subaru Corporation, which owns the Subaru brand, is an independent automaker. However, the company collaborates with major auto manufacturer Toyota on several models, such as the BRZ and the Solterra (which is built in a Toyota factory). Toyota also has a stake in the Subaru Corporation, further creating overlap between the interests of the two companies. While these companies are still technically considered competitors within their particular market, they also tend to cooperate or coordinate with each other to benefit the group as a whole. For example, instead of competing to attract customers by lowering prices or offering better contracts, they may all use similar contracts or keep prices around the same level.

Earlier this week, in a move that has significance for the Indian cement sector, the Adani Group announced its acquisition of Switzerland-based cement major Holcim’s Indian assets. Here’s how that has played out in the last two decades or so, when the sector has grown faster than the economy and delivered market-beating returns. The paper also hints that regulation and (poll) campaign spending are responsible for an increase in mark-up of 1-2 per cent.

The goods produced by different firms have their own distinguishing characteristics, yet all of them are close substitutes of each other. In spite of increasing demand, the oligopolistic nature of the cement sector gives manufacturers the ability to calibrate prices by controlling supply. The presence of large unutilized capacity also reinforces supply not being fully responsive to demand. Over the past decade, cement prices have mostly fluctuated along with global commodity cycles, with increased input costs translating to higher prices. However, there has been a secular increase in cement prices since 2019, with prices at a consistently higher level. Between January 2003 and May 2022, the bellwether BSE Sensex grew at a compounded annual growth rate (CAGR) of 16.3%.

What Are Current Examples of Oligopolies?

“These are fears that are being created to generate a false narrative,” he adds. The DEA appraisal also argued oligopoly examples in india that awarding them to different companies would facilitate yardstick competition and that ‘in case of project failures there would be capable bidders available’. Former Telecom Regulatory of India (TRAI) Chairman Rahul Khullar had said in 2018 that Jio’s entry had to be disruptive as it was the only way for it to succeed. However, he was quick to mention the regulatory action that became the ‘invisible hand’ determining Jio’s economic fortunes.

Additionally, the combined market share of these two brands is 70%, which makes other companies, especially start-ups, face intense competition. If the firms produce a differentiated product, like automobiles, the industry is called differentiated or imperfect oligopoly. Under oligopoly, there is complete interdependence among different firms. So, price and output decisions of a particular firm directly influence the competing firms. Instead of independent price and output strategy, oligopoly firms prefer group decisions that will protect the interest of all the firms.

Once a company develops a new medicine, it patents the drug, and it lasts for 20 years. While other companies are more than welcome to produce the medicine, they can only do so by purchasing the patent. Unsurprisingly, large pharmaceuticals have both aspects under their control, creating an oligopoly. The entire pharmaceutical industry in the United States is controlled by Novartis, Merck, and Pfizer. Oligopolies exist naturally or can be supported by government forces as a means to better manage an industry.

In oligopolistic industries the process is generally a blend of monopolistic and competitive tendencies. Oligopolies can be followed in several industries such as steel, aluminum and automobile industries. The price change of each producer affects the actions of other producers. For instance, a reduction in the price of one producer may lead to an equal deduction by the other producers. Unlike a monopoly, where a single corporation dominates a certain market, an oligopoly consists of a select few companies.

Current Examples of Oligopolies

Aviation is a unique type of oligopoly because unlike other industries, that have an oligopoly on a global level, air travel only functions as an oligopoly within a nation. For instance, among 58 airlines in the United States, only four of these dominate the sector by 55% market share. These companies are American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines.

Collaboration between existing Vendors in the Market:

According to the Cellular Telecommunication and Internet Association, there are 30 facilities-based wireless service providers in the US. The top three of them hold more than 80% of the cellular network market share. In the area of laptop and desktop machines, Microsoft Windows is the most commonly installed operating system, with over 80% of the global market share. Apple macOS accounts for 10-12%, followed by Google Chrome OS (4%) and Linux distributions (2%). Sony Music is the largest of these “Big Three,” generating an annual revenue of over $7.27 billion.

1. Oligopolies exist in several industries from mass media and entertainment to carmakers and airlines to segments of big tech.
2. The second reason for the oligopoly in pharmaceuticals is patenting.
3. While oligopoly is the market strategy that involves a number of producers in the market.

The landscape of India’s cement oligopoly, in five charts

The entire mobile industry was changed when Apple introduced its iPhone, and the term ‘smartphone’ emerged. Within 3 years of its launch, Google had also installed its operating system in a majority of popular brands. While Apple perfected its one premium smartphone, Google contracted with numerous manufacturers to spread its operating system, specifically targeting developing countries. Presently, the entire smartphone market is governed by Apple and Google.

Computer technology industry

“Our approach is calibrated in nature, so that intervention remains effective and targeted; it does not restrain innovation and would in turn help the market to regulate itself.” Sectors, including cigarettes, non-banking finance companies (NBFCs), small cars, paints, adhesives, baby milk powder, hair oil, pharma APIs and health diagnostics, also throw up such examples. In the modern era, there exist different market strategies such as monopoly and duopoly. In this strategy the industries are allowed to sell their product through a centralized syndicate.

It is the opposite of partial oligopoly and no particular industry or firm dominates the market. If conditions are right, companies in the oligopoly will come to realize that they are best served individually not by competing tooth-and-nail. Instead, they can achieve higher profits by coordinating and cooperating on particular aspects of business, such as setting prices or limiting customer options. Oligopolies exist in several industries from mass media and entertainment to carmakers and airlines to segments of big tech. Industries where smaller companies have been bought out or merged, or where large corporations dominate, tend to have oligopolies. Hollywood has long been an oligopoly, with a select few movie studios, film distribution companies, and movie theater chains to choose from.