Oligopoly vs. monopoly
Two years ago, I published an article that caused a great response: “There are indeed monopoly in this world” Today I plan to change the perspective and talk about some of the more famous oligopolistic companies in the world.
Please note that there is one difference between an oligopoly and a monopoly: a monopoly is basically certain to make money because there is only one company that controls the entire market, but an oligopoly is not necessarily certain to make money because there are multiple companies sharing the market. The best example is the US airline industry. Although it is controlled by a few operators, each of them has suffered heavy losses for a long time.
Strategic Consulting
McKinsey and Boston Consulting Group are two groups that can be said to have monopolized most of the global strategic consulting market, but both companies are private companies.
Accenture also has a small number of strategic consultants, but the business volume is very small. For more details about Accenture, please see my post of “What kind of company is Accenture, the McKinsey of technology industry?“
Commercial aircraft
Boeing (ticker: BA) and Airbus (ticker: EADSY) have long shared the global civil commercial aircraft market. But their days may be numbered, as their biggest common enemy, Commercial Aircraft Corporation of China (Comac), has begun to enter this market. In the future, the global civil commercial airliner market will change from a duopoly of two companies to a trio.
Commercial aircraft engines
The global civil commercial aircraft market has long been monopolized by four companies: Safran (ticker: SAFRF), Pratt & Whitney (ticker: RTX), General Electric (ticker: GE), and Rolls-Royce (ticker: RYCEY). For example, the engines used by COMAC are from Safran, a US-French joint venture.
Regarding General Electric, please see my post of: “How did three listed companies make money after GE spinoff? What are the prospects?“
Cryptocurrency trading
Currently, the two largest cryptocurrency trading platforms are Binance and Coinbase (ticker: COIN). Regarding these two companies; please see the introduction of my post of: “How do Coinbase and Binance make money? Advantages comparison“
Credit card network
Visa (ticker: V) and Mastercard (ticker: MA) are the world’s most famous duopoly.
In Sections 2-3 of my book “The Rules of Super Growth Stocks Investing“, I have introduced in detail the two credit card issuing networks, Visa (ticker: V) and Mastercard (ticker: MA). If you are not very clear about important issues such as the basic business, moat, market share, etc. of these two companies, I suggest that readers refer to the contents of this small chapter in my book.
The following is an article set in my blog about these two credit card issuers:
- “Several possible threats to the Visa and Mastercard credit card networks“
- “What’s the credit card difference among American Express, Visa and MasterCard ? at least 8 differences“
- “American Express, one of the best investments of Buffett’s career“
- “The differences between Visa and Mastercard?“
- “Has the moat of ubiquitous credit card networks loosened?“
Credit ratings of countries and companies
There are only three companies in the world that monopolize this market, as I introduced in Section 2-2 of my book “The Rules of Super Growth Stocks Investing“, the three major corporate credit rating companies that are well-known in the business community and capital markets are Standard & Poor’s (US stock code: SPGI), Moody’s (US stock code: MCO), and Fitch (not listed).
Consumer credit agency
In the field of personal consumers, the United States also has three major consumer credit rating companies (please refer to my post: “Three major consumer credit rating companies Equifax, Experian, and TransUnion“). Their business is to evaluate personal credit ratings. Their status is like Taiwan’s Financial Joint Credit Information Center, China’s Baihang Credit, or Ant Group’s Sesame Credit.
Home mortgage loans in the United States
Fannie Mae (ticker: FNMA) and Freddie Mac (ticker: FMCC) are the first and second largest mortgage lenders in the United States and the largest U.S. franchised companies. Their main business is to acquire loans in the secondary market for U.S. home mortgages and raise funds at a lower cost by issuing agency bonds or securitized mortgage bonds to investors, earning the spread. Fannie Mae’s full name is the Federal National Mortgage Association (FNMA). Freddie Mac was formerly known as the Federal Home Mortgage Corporation (FMCC), both of which are companies sponsored by the US government.
I have introduced them in detail in Sections 2-3 of my book “The Rules of Super Growth Stocks Investing“.
Core semiconductor equipment
There are currently five major semiconductor equipment manufacturers in the world, among which Applied Materials and Lam Research are particularly important. Regarding semiconductor equipment manufacturers, please see my following posts:
- “Top five semiconductor equipment providers“
- “How does Applied Materials, lord of semiconductor equipment, make money?“
- “How does Lam Research, top chip equipment player, make money?“
- “Why was ASML founded?“
- “ASML, who dominate TSMC’s fate“
Photoresist
The global photoresist market is divided among five companies: Japan’s JSR (ticker: JSCPY) (28%), Tokyo Ohka TOK (ticker: TDTH) (21%), Rohm and Haas under Dow Chemical (ticker: DOW) (15%), Shin-Etsu Chemical (ticker: SHECF) (13%), and Fuji Electronics (ticker: FELTF) (10%). Japanese companies account for approximately 70% to 90% of the global photoresist market, especially in the field of high-end ArF and EUV photoresists, where the market share even exceeds 90%.
EDA Electronic Design Automation
There are currently three major EDA electronic design automation manufacturers in the world, namely: Synopsy (ticker: SNPS), Cadence (ticker: CDNS), and Mentor Graphics (ticker: SIEGY) under Siemens. For more information about this EDA electronic design automation manufacturer, please see my following related posts:
- “Three EDA oligopoly vendors: Synopsys, Cadence, and Mentor Graphics“
- “How does, the EDA oligopoly, Cadence make money?“
- “How does Synopsis, the EDA oligopoly, make money?“
Memory Chip
Currently, there are only three major memory manufacturers in the world: Samsung (ticker: SSNLF), Hynix (ticker: HXSCL), and Micron (ticker: MU). In my book “Super Growth Stock Investment Rules”, in the section 3-1 on the third category of industries, I took Micron as an example. Please see my post of “How does Micron make money? What investors should know?“
I have also introduced Samsung in detail in Section 3-3 of my book “The Rules of Super Growth Stocks Investing“.
But now the situation of these three monopolizing the memory market has changed, because China’s Yangtze Memory Technologies (YMTC) has been no less than Amon in terms of technology and market share in recent years. YMTC not only expects to increase its monthly production capacity to 130,000 pieces by the end of 2024, but also plans to challenge 15% of the global NAND Flash production by the end of 2026.
China’s Changxin Memory Technologies (CXMT) will have a monthly production capacity of 280,000 pieces by the end of 2025, and is expected to exceed 300,000 pieces in the future, equivalent to 15% of the global DRAM production.
In short, the good days of the three memory monopolies are over.
Cell phone modem chips
Qualcomm (ticker: QCOM) , Apple, and MediaTek are currently the three major mobile phone modem chip manufacturers. For this part, please refer to the following posts in my blog:
- “Qualcomm PC might bring it back to glory“
- “Qualcomm diversifies success, no nonger highly dependend on phone“
Wireless Transmitter
Broadcom (ticker: AVGO), Skyworks (ticker: SWKS), and Qorvo (ticker: QRVO) are currently the three major manufacturers of wireless transmitters for mobile devices. Regarding Broadcom, please refer to the posts in my blog:
- “The reasons behind Broadcom share price consistantly outperformance“
- “Significant changes in Broadcom’s business approach“
Enterprise network communication equipment
The global enterprise network communication equipment market is mainly monopolized by several manufacturers, including Cisco (ticker: CSCO), Arista (ticker: ANET), IBM (ticker: IBM), Hewlett Packard Enterprise (ticker: HPE) which acquired Juniper, Broadcom (ticker: AVGO), Huawei, etc.
For more information about these companies, please see my posts below:
- “The reasons behind Broadcom share price consistantly outperformance“
- “Significant changes in Broadcom’s business approach“
- “How Arista, the nemesis of Cisco’s monopoly, makes money?“
- “HPE expertizes on enterprise technology services“
- “IBM decision-making mistakes in the past 4 decads led to today’s outcome“
- “How’s IBM performing these years?“
- “How does IBM make money? What’s next?“
- “How does the all-powerful Huawei make money?“
x86 computer central processing unit
Intel (ticker: INTC) and AMD (ticker: AMD) are currently the two major x86 computer central processing unit manufacturers. For this part, please refer to the following posts in my blog:
- “Gelsinger faces a impossible mission, time is running out“
- “How bad is Intel right now?“
- “Intel is spinning into five separate companies“
- “Will Intel go bankrupt?“
- “How does Intel make money? and the benefits to invest in it“
- “Intel’s current difficult dilemma“
- “How AMD makes money? A rare case of turning defeat into victory“
- “Why is AMD’s performance so jaw-dropping?“
Discrete graphics processor
Nvidia (ticker: NVDA) and AMD are currently the two major independent graphics processor manufacturers. For this part, please refer to below posts in my blog:
PC
HP (ticker: HPQ), Dell (ticker: DELL), Lenovo (ticker: LNVGY), Apple (ticker: APPL), Asus, and Acer, a total of six companies, almost monopolize the global desktop and notebook personal computer market. Here are some posts on my blog related to PC manufacturers:
- “How does HP make money? The pros and cons of investing in HP“
- “HPE expertizes on enterprise technology services“
- “How does the resurrected Dell make money?“
- “AI PC is changing the PC supply chain and ecosystem“
Mobile operating systems and stores
Alphabet’s (ticker: GOOGL and GOOG) Google’s Android and Apple’s (ticker: APPL) iOS both monopolize the operating systems and stores for mobile devices. Here are some of the posts on my blog about mobile operating systems and mobile app stores:
- “How does Apple make money?“
- “Did Apple really lose the lawsuit with Epic Games?“
- “The importance of the App Store legal battle between Apple and Epic Games“
- “Consider Alphabet if you can buy one stock only to retire from it? “
- “Alphabet’s urgent crisis“
Cloud Service Providers
Amazon (ticker: AMZN), Microsoft (ticker: MSFT), Alphabet (ticker: GOOGL and GOOG), and Alibaba (ticker: BABA) are the world’s top four cloud service providers.
I have mentioned it in several places in my book “The Rules of Super Growth Stocks Investing“, including page 90 of 2-2, page 137 of 2-4, pages 184, 186, 190-1916 of 3-3, and page 348 of 5-1! We have introduced the world’s top cloud service providers in great detail.
There is also a related post in my blog: “Cloud computing No.1 should be Microsoft, not Amazon“
Streaming Video
Netflix (ticker: NFLX), Disney (ticker: DIS), Amazon (ticker: AMZN), and YouTube, owned by Alphabet (ticker: GOOGL and GOOG), are the major streaming video companies in North America. Here are some posts related to them on my blog:
- “How does Netflix make money? what’s great about“
- “How does Disney make money? How is the future?“
- “Disney is currently facing its biggest crisis since its inception“
- “Disney’s ESPN enters sports betting, and US listed gambling companies“
- “Why Amazon acquired MGM?“
- “Warner Bros. Discovery, a new media giant“
- “The global streaming video throne is replaced“
- “Decisive factor for AT&T and Verizon stocks valuation“
Streaming Music
Spotify (ticker: SPOT) and Apple (ticker: AAPL) are the two major streaming music companies in North America.
GPL-1 weight loss drug
It is recommended that you also read the following posts related to Eli Lilly (ticker: LLY) and Novo Nordisk (ticker: NVO):
- “Novo Nordisk’s new diabetes drug Semaglutide,Ozempic,Wegovy and Mounjaro found to have surprising weight-loss effects“
- “Why Eli Lilly become global pharmaceutical market value king?“
- “Eli Lilly, a big pharma with astonishing valuation“
Garbage disposal in the United States
Waste Management (ticker: WM) is one of the few major waste management companies in the United States. Republic Services (ticker: RSG) is the second largest in the industry, and Waste Connections (ticker: WCN) is the third largest. That’s all. The other operators are very small and can be ignored.
I have introduced Waste Management (ticker: WM) in my book. I will not repeat the content in the book. Investors are welcome to refer to my article:
- Introduction on page 179, Section 3-8 of the book “The Rules of 10 Baggers“.
- Introduction on pages 120-121 in Section 2-3 of my book “The Rules of Super Growth Stocks Investing“.
And my post of: “Quasi-monopoly Waste Management (WM)“
The U.S. aviation industry
I introduced the U.S. aviation industry in Section 3-1 of my book “The Rules of Super Growth Stocks Investing“. Although the U.S. aviation industry is controlled by a few companies, they have been suffering heavy losses for a long time.
In the United States, after decades of mergers, there are only four large airlines left: American Airlines Group (ticker:AAL), Delta Air Lines (ticker:DAL), Southwest Airlines (ticker:LUV) and United Airlines (ticker:UAL).
Top three telecom operators in US
There are currently three major telecommunications operators in the United States, namely Verizon Communications (ticker: VZ), AT&T (ticker: T), and T-Mobile (ticker: TMUS). In my blog, there is a post discussing companies in this area: “Decisive factor for AT&T and Verizon stocks valuation“
Rail transport in the Northwest
Rail transportation in the Northwest region of North America mainly relies on two railway companies; these two railway companies are Burlington Northern Santa Fe Railway (BNSF, ticker: BRK.A and BRK.B) and Union Pacific Railway (Union Pacific, ticker: UNP), which form a monopoly in the Northwest region. Burlington Northern Santa Fe Railway has been acquired by Berkshire Hathaway.
For more details, please see my post of “Union Pacific, representative of the duopoly“
Mobile payments in China
Currently, there are two major mobile payment providers in China: Alibaba (ticker: BABA) and Tencent (ticker: TCEHY). Regarding Alibaba and Tencent, please refer to the following posts of mine:
- “Tencent vs. Alibaba, part one“
- “Tencent vs. Alibaba, part two“
- “Why is Alibaba spin-off unanimously optimistic?“
- “How does Pinduoduo make money, why it surpass Alibaba and become No. valuable listed Chinese companies in US?“
- “Amazon vs. Alibaba“
E-commerce in China
Currently, there are three major e-commerce companies in China: Alibaba (ticker: BABA), Pinduoduo (ticker: PDD), and JD.com (ticker: JD). Regarding e-commerce in China, please refer to the following posts of mine:
- “Why is Alibaba spin-off unanimously optimistic?“
- “How does Pinduoduo make money, why it surpass Alibaba and become No. valuable listed Chinese companies in US?“
- “Amazon vs. Alibaba“
Related articles
- “The world’s most well-known oligopoly companies“
- “How do monopolies or oligopolies work in the real world?“
- “What kind of company is Accenture, the McKinsey of technology industry?“
- “There are indeed monopoly in this world“
- “Industries with moat and going downhill“
- “Antitrust and governance faced by Chinese and American technology giants“
- “Investors should not afraid of antitrust investigation on your holdings“
- “Inventors are rarely successful, but improvers are successful and profitable“
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