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Highly Concentrated Industries
Highly Concentrated Industries
Highly Concentrated Industries
Special Report
Highly Concentrated: Companies That February 2012
Dominate Their Industries
USA Inc. and Namco Cybertainment Inc., Paper Product Manufacturing industry is
a subsidiary of Japanese parent company expected to grow 2.5% in 2012 to
Namco Bandai Holdings, are the third $11.7 billion in revenue.
and fourth largest companies in this
industry. The industry has become Wireless Telecommunications
increasingly concentrated over recent Carriers
years as large players seek cost Top four market share: 94.7%
advantages through higher volumes of Major companies:
sales. For instance, during the economic Verizon Wireless: 36.5%
slowdown, stronger firms pursued AT&T Inc.: 32.1%
financially challenged firms in order to Sprint Nextel Corporation: 15.4%
expand market share. The Arcade, Food T-Mobile USA: 10.7%
and Entertainment Complexes industry There were two waves of mergers and
will generate about $1.5 billion in 2012, acquisitions (M&As) in this industry over
which represents a 1.1% revenue increase the past decade. First, there was a high
from 2011. level of M&A activity among the “baby
bells” (the spin-offs of the former AT&T
Sanitary Paper Product monopoly), which led to the creation of
Manufacturing new number-one and number-two
Top four market share: 92.7% players. This event was then followed by
Major companies: a second wave of M&A activity that
Kimberly-Clark Corporation: 35.5% yielded a significant increase in
Proctor & Gamble: 30.0% concentration across the various
Georgia-Pacific: 27.2% telecommunications industries.
The Sanitary Paper Product Major companies have pursued
Manufacturing industry has a high level substantial M&A activity in this
of market share concentration, with an industry to acquire subscribers and
estimated 92.5% of the market being expand coverage. A large subscriber
held by the top three producers in 2012. base is critical to competitiveness
The level of concentration differs among because it delivers considerable scale
various product groups. For example, economies, enabling a carrier to offer
the disposable diapers market effectively cheaper prices and realize higher
has a duopoly, with Texas-based margins. With a stronger cash flow, a
Kimberly-Clark and Cincinnati-based carrier is able to invest more heavily in
Procter & Gamble both holding more upgrading network infrastructure to
than 40.0% of the segment market deliver new and improved services. In
share. A similar situation exists with 2012, industry revenue is expected to
tissue products: Atlanta’s Georgia- increase 3.1% to $20.2 billion.
Pacific is estimated to hold nearly half
the market share for these products. Satellite TV Providers
This kind of product separation among Top four market share: 94.5%
the large companies intensifies the Major companies:
market power held by each player, DirecTV: 57.6%
making the industry effectively more Dish Network: 36.9%
concentrated. There is a higher degree of For the past decade, high-definition
brand loyalty in this industry compared (HD) programming has been the focus of
to other paper converting industries, and the Satellite TV Providers industry (as
the industry has become increasingly well as cable networks). Since delivering
competitive over the years. The Sanitary HD services to customers in 2002,
WWW.IBISWORLD.COM Special Report February 2012 3
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