Great examples of near pure monopolies

A big hat tip to one of my students Arno Albici for spotting a superb article in the Economist about a cluster of mid-sized Japanese manufacturers who continue to enjoy near pure-monopoly power in highly specific, high value-added businesses. decades of industry expertise and reinvesting profit to fund high levels of research and innovation continue to give these companies a remarkable competitive strength in the market. The barriers to entry for rival manufacturers are very high and this helps to explain the limited contestability in the global marketplace.

For example:

Shimano earns around $1.5 billion a year by supplying 60-70% of the world’s bicycle gears and brakes
YKK makes around half the world’s zip fasteners by value,
75% of motors for hard-disk drives in computers come from a firm called Nidec
90% of the micro-motors used to adjust the rear-view mirror in every car are made by Mabuchi

“Many technology products have become commodities, but certain components have not, since they require continual innovation. So entry barriers to the business of making them remain high, and although the margins on the final goods have deteriorated, the margins on specialised, high-end components are still juicy.: Much more here

Unit 4 Macro: Focus on India - Comparative Advantage [27 Jan 2012]
Unit 4 Macro: Focus on India - World’s Cheapest Computer [26 Jan 2012]
Unit 2 Macro: Can China Stay Competitive [25 Jan 2012]
Unit 1 Micro: Can the UK Computer Games Industry Grow [24 Jan 2012]
Unit 4 Macro: Focus on India - Economic Growth [24 Jan 2012]
Unit 3 Micro: 3D Printing and a Manufacturing Revolution [23 Jan 2012]
Unit 2 Macro: Exporting to the Booming Chinese Economy [23 Jan 2012]
Unit 1 Micro: Nano Technology and Energy Efficiency [17 Jan 2012]
Unit 2 Macro: Videos on Productivity [17 Jan 2012]
Using Infographics in the classroom [15 Jan 2012]
Unit 4 Macro: Competitive Advantage in Trade (Some Videos) [12 Jan 2012]
Unit 4 Macro: Does Manufacturing Matter? [10 Jan 2012]
Unit 2 Macro: Factors Driving Business Investment [10 Jan 2012]
2012 - Carnage on the High Street [28 Dec 2011]
Unit 3 Micro: Sub Normal Profits - BP Leaves the Solar Industry [21 Dec 2011]
Unit 3 Micro: Patent Wars- A Touchy Subject for Apple [16 Dec 2011]
Unit 1 Micro: Inside a Biscuit Factory [1 Dec 2011]
Unit 3 Micro: Hope Bikes - A Commitment to Excellence [30 Nov 2011]
Unit 4 Macro: Does UK Manufacturing have a Future? [30 Nov 2011]
Some Practice Interview Questions [27 Nov 2011]
Unit 3 Micro: Brand Loyalty in Mobile Phones [27 Nov 2011]
Unit 3 Micro: Patent Wars might Stifle Innovation [23 Nov 2011]
Analysis and evaluation - do monopolies always make supernormal profits? [21 Nov 2011]
Unit 2 Macro: Should the EU introduce a Tobin Tax? [14 Nov 2011]
AS Macro: The State of British Business [13 Nov 2011]
Unit 4 Macro: Richard Florida on the Great Reset [5 Nov 2011]
Unit 2 Macro: A New £50 comes into circulation [2 Nov 2011]
Unit 3 Micro: UK Executive Pay - All in it Together? [29 Oct 2011]
Unit 1 Micro: Is the Sun Dipping on Solar Subsidies? [27 Oct 2011]
Keynes Prize: The Economics of Cities (3) [14 Oct 2011]
Can the “invisible hand” solve Africa’s poverty? [13 Oct 2011]
Keynes Prize: The Economics of Cities (2) [13 Oct 2011]
Keynes Prize: The Economics of Cities (1) [12 Oct 2011]
Why Is Macroeconomics Such A Mess? [11 Oct 2011]
Unit 1 Micro: Waste Mountains as Above Ground Mining [6 Oct 2011]
Unit 3 Micro: Amazon launches the Kindle Fire [1 Oct 2011]
Unit 1 Micro: Exercise on Market Supply [26 Sep 2011]
Unit 4 Macro: Bangladesh and Comparative Advantage in Textiles [19 Sep 2011]
Study Note - Value Added and Contributions to a Nation’s GDP [16 Sep 2011]
Another Economics prop - for remembering MC=MR! [15 Sep 2011]
Unit 2 Macro: Value Added in Production and GDP [11 Sep 2011]
Mixing with the Nobel Economists [4 Sep 2011]
Unit 3 Micro: Quiz on Business Costs and Profits [25 Aug 2011]
Capital labour substitution at FoxConn [2 Aug 2011]
Unit 1 Micro: Cotton Prices and the Retail Price of Clothing [13 Jul 2011]
Unit 1 Micro: Economics of Volatile Corn Prices [12 Jul 2011]
Unit 3 Micro: Motorsport Valley and External Economies of Scale [12 Jul 2011]
Unit 4 Macro: Dangers of High Inflation [11 Jul 2011]
Unit 3 Micro: Oligopsony - Dairy Losses Drive Farmers from the Fields [10 Jul 2011]
Where there’s muck there’s brass [6 Jul 2011]
China: The End of Cheap Labour [28 Jun 2011]
Two new RSA Videos - Matthew Taylor and Tim Harford [27 Jun 2011]
Evan Davis ‘Made in Britain’ - and a new trade data tool to play with [21 Jun 2011]
Six Global Trends Shaping Business Strategy [15 Jun 2011]
Do you agree that the government should provide support to the UK car industry? [12 Jun 2011]
AS Macro Key Term: Supply-Side Policies [25 May 2011]
AS Macro Key Term: Demand Pull Inflation [24 May 2011]
AS Macro Key Term: Cost Push Inflation [24 May 2011]
AS Macro Key Term: Recession [23 May 2011]
AS Macro Key Term: Spare Capacity [23 May 2011]
A2 Micro: Competition Policy [20 May 2011]
A2 Micro: Oligopoly and Collusion [20 May 2011]
A2 Micro: Oligopoly [20 May 2011]
A2 Micro: Price Discrimination [19 May 2011]
A2 Micro: Entry Barriers in Markets [19 May 2011]
A2 Micro:  Monopsony Power in Markets [19 May 2011]
A2 Micro: The Importance of Profit [19 May 2011]
A2 Micro: Market Structure, Conduct & Performance [19 May 2011]
A2 Micro: High and Low Marginal Cost Products [19 May 2011]
A2 Micro: Consequences of Price Discrimination [19 May 2011]
A2 Micro: Examples of Price Discrimination [19 May 2011]
A2 Micro: Perfect Competition [19 May 2011]
A2 Micro: Competition and Efficiency [19 May 2011]
A2 Micro: Outsourcing [18 May 2011]
A2 Micro: Business Growth [18 May 2011]
A2 Micro: Innovation and Economic Policies [18 May 2011]
A2 Micro: Innovation Efficiency and Welfare [18 May 2011]
A2 Micro: Moving Away from Profit Max [18 May 2011]
Unit 3 Micro: Diseconomies of Scale [18 May 2011]
A2 Micro: Minimum Efficient Scale [18 May 2011]
A2 Micro: External Economies of Scale [18 May 2011]
A2 Micro: Economies of Scope [18 May 2011]
UK Economy Update: What Mervyn Said [11 May 2011]
Review of “Adapt” by Tim Harford [9 May 2011]
A2 Micro: Innovation in Markets [4 May 2011]
What America makes [4 May 2011]
Management lessons from the War in Iraq [30 Apr 2011]
AS and A2 Macro Revision: Keynesian Economics [28 Apr 2011]
A2 Micro: EU Aviation - State Aid and State Ownership [28 Apr 2011]
Economics Recommended Reading - Summer 2011 [26 Apr 2011]
Wiki Revision: A to Z on Monopoly [23 Apr 2011]
A2 Micro: Changes in Costs and Profits [23 Apr 2011]
Rise in investment could kick start recovery [18 Apr 2011]
Key AS Micro Terms: Competition and Monopoly [17 Apr 2011]
Key AS Micro Terms: Economic Efficiency [16 Apr 2011]
Key AS Micro Terms: Costs and Profits [16 Apr 2011]
Smartphones and Creative Destruction [16 Apr 2011]
China set to become exporter of inflation [14 Apr 2011]
AS Macro Key Term: Frictional Unemployment [11 Apr 2011]
Unit 3 Micro: Solar Panels and Economies of Scale [11 Apr 2011]

ECONOMICS TEACHER RESOURCE NEWSLETTER

Join over 6,000 other Economics Teachers in the UK and around the world who receive the tutor2u regular Economics Resource Email Newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops + loads of great ideas for teaching economics from our blog authors.