4 ms·
How can they be amazingly competitive industries AND have amazingly high margins at the same time? I thought those were mutually exclusive things.
by cjdavis 15y ago
How can they be amazingly competitive industries AND have amazingly high margins at the same time? I thought those were mutually exclusive things.
- blantonl 15y agothe reason is because of the lack of players in the industry in any given locale. First, in my examples above, those businesses are highly undesirable industries to be involved in as an owner and an employee, but highly profitable. Second, most of those above listed businesses are family owned with a lot of experience and background in the industry they represent. Newcomers are viewed as strongly suspicious and since those existing entities know the ins and outs, it is an uphill climb. This doesn't mean that good innovation cannot overcome the obstacles that these very established businesses have, but you can bet that tradition and experience in those businesses will lead to a lot of ammunition for a fierce fight when newcomers arrive on the scene.
- Joakal 15y agoOr there's high costs to entry and this can lead to collusions "Lets agree on 100x mark up for this suburb". Eg telcos.