Consolidated Competitive Landscape

Question 1

Consolidated comp landscape definition

Answer 1

A consolidated comp landscape implies that there are a few major players that capture the lion’s share of the market, leaving a small fraction of the market for the smaller players

Question 2

General examples of consolidated mkts

Answer 2

• aircraft manufacturers (Boeing and airbus capture 88% of global market)
• US cell phone service providers (T-Mobile, Verizon, AT&T)
• non-alcoholic beverages: Pepsi(20) and Coke(40) capture about 60% of the mkt

Question 3

Characteristics of consolidate competitive landscape

Answer 3

• usually 2-4 dominant players that capture significant portions of the market
• dominant players with developed distribution networks, high brand recognition, high R&D budgets and large marketing budgets
• with economies of scale, dominant players typically have cost structure advantages that give them some degree of price flexibility
• all else being equal, it is challenging to compete against dominant players given the scale of their business and the resources they have at their disposal (high marketing budgets, high R&D budgets, developed distributor relationships)

Question 4

Consolidated comp landscape example: client produces and distributes windows in the US, currently only vertically integrated player and they are losing their market share. Brought us in to understand reasons behind that and turn it around

Answer 4

Window manufacturing mkt:
- likely mature and commoditized market, which suggests low margins and limited industry growth
- likely consolidated industry with several major players capturing the lion share of the market
- dominant players enjoy competitive cost structure, high brand awareness, large marketing budgets, developed distribution and high R&D budgets