Browse Definitions :
Definition

market concentration

Market concentration is the distribution of a given market among the participating companies. Market concentration is also known as seller concentration or industry concentration.

Market concentration is sometimes expressed as a concentration ratio (CR), which quantifies the distribution of a market among competitors. CR4, for example, expresses the percentage of the market that is controlled by the top four companies.

The more highly concentrated a market is, the less competitive it is. A market with low concentration is not dominated by any large players and is considered competitive. Markets with extremely low concentrations are said to be fragmented.

When a single business dominates a market, it is said to have a monopoly; a two-business concentration is known as a duopoly. When more than two companies (but still a small number) control a given market, the situation is known as an oligopoly.

Assessing concentration is an important part of the market research stage for business planning to gauge the feasibility entering a given market. Governments, on the other hand, often study markets to ensure that illegal or unethical practices aren’t contributing to anti-competitive environments, which can lead to unfair prices for consumers and other undesirable outcomes. Highly concentrated markets may result from collusion and anti-competitive practices, although they can also develop naturally. Anti-competitive practices may also be used to discourage startups and less-established companies trying to enter a highly concentrated market.

This was last updated in April 2019

Continue Reading About market concentration

SearchNetworking
SearchSecurity
  • man in the browser (MitB)

    Man in the browser (MitB) is a security attack where the perpetrator installs a Trojan horse on the victim's computer that is ...

  • Patch Tuesday

    Patch Tuesday is the unofficial name of Microsoft's monthly scheduled release of security fixes for the Windows operating system ...

  • parameter tampering

    Parameter tampering is a type of web-based cyber attack in which certain parameters in a URL are changed without a user's ...

SearchCIO
  • e-business (electronic business)

    E-business (electronic business) is the conduct of business processes on the internet.

  • business resilience

    Business resilience is the ability an organization has to quickly adapt to disruptions while maintaining continuous business ...

  • chief procurement officer (CPO)

    The chief procurement officer, or CPO, leads an organization's procurement department and oversees the acquisitions of goods and ...

SearchHRSoftware
SearchCustomerExperience
  • clickstream data (clickstream analytics)

    Clickstream data and clickstream analytics are the processes involved in collecting, analyzing and reporting aggregate data about...

  • neuromarketing

    Neuromarketing is the study of how people's brains respond to advertising and other brand-related messages by scientifically ...

  • contextual marketing

    Contextual marketing is an online marketing strategy model in which people are served with targeted advertising based on their ...

Close