|
|
|
|
|
|
by timoth3y
2779 days ago
|
|
|
> Examples of markets where this actually happens: Coca Cola (as discussed), Walmart (in local areas), YKK in zippers, AB inBev in Brazil, Luxottica in eyewear. None of these is the result of the "slight price advantage" and increased efficiencies you claimed. Luxottica is expensive and uses their vertically integrated monopoly power to keep competitors like Oakley out. Warby Parker gained success so quickly largely because of this dysfunctional system. Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products. > It's also common for this to happen with open source software, e.g. Linux on embedded devices, OpenSSH as an ssh client/server, These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power. |
|
|
The eyewear market is weird because opticians use free eye exams as a loss leader to sell expensive frames, and if you have insurance then the insurance is paying and customers aren't sensitive to price, so the market selects for expensive high margin frames even though they're an inexpensive commodity with low barriers to entry. (This is a primary reason why healthcare is so expensive in general.)
The scale advantage then isn't low "price" (because the market selects for a specific high price, namely the limit on what insurance will pay), rather the advantage is lower cost which leaves the seller with more to spend on marketing etc.
And this leaves a niche for the likes of Warby Parker to capture the segment of the market which is paying out of pocket and is actually sensitive to price.
> Coke, where it controls the market it does so by controlling distribution, menus, and retail space, not by offering cheaper products.
But it still sells at competitive prices. Having retail space gives them volume, not pricing power.
> These are not monopiles. They are more akin to standards. It's like saying the kilogram has a monopoly. It's kind of true if you play with the meaning of the word a bit, but in terms of markets, there is no monopoly power.
That's the point. They have overwhelming market share but minimal market power. If suddenly Linux cost a lot of money, people would switch to BSD.