Fragmented and a Consolidated Industry Essay

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New players are usually very slow to enter the market, not only because the market has been consolidated through various mergers and acquisitions, but also because of the high entry costs.

Another important difference is given by the access to capital. In a consolidated industry, the big players have access to capital and, generally, investors are deterred to investing in smaller companies simply because they don't truly believe in their capacity to fight with the larger players in the market, except perhaps on small niches. On the other hand, in a fragmented market, access to capital and resources in general is easier, because there are fewer influential players in the industry and larger possibilities for the smaller companies.

Competition is usually stronger on a fragmented rather than a consolidated market.

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The reason for this is that there are more opportunities on the market and the smaller players fight for every niche. In consolidated industry, there are market agreements between the major players that tend to regulate the market and divide it into spheres of influences. This does not necessarily mean that consolidated industries cannot sometimes be extremely competitive. The automobile industry, for example, will have the players fighting to share the markets around the world. However, a lower competition is a general tendency on a consolidated

Finally, usually there are more mergers and acquisition on a consolidated market rather than on a fragmented one. In general, this is not necessarily a tendency aimed at controlling the markets, but a way of investing more into research and development by….....

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