Market Penetration

  

This kind of penetration is totally acceptable for viewing by all ages on television. Think: the iPhone entry into the telephone market in the early 2000s. That hardware industry had been dominated by phone-makers, Motorola and Nokia, both of whom are essentially gone now. The iPhone had tremendous market penetration, having gone from zero to comprising about a third of the total phone handset market, worldwide, in just 15 years. Amazing feat for a relatively slow-moving industry.

When you're an upstart, Goliath-killing David, big market penetration is a good thing. And yes, back then, Apple was a David. Or rather, a Steve.

Related or Semi-related Video

Finance: What are monopolies and monopso...5 Views

00:00

Finance Allah Shmoop What are Monopolies vs Monopoly Sinese Ah

00:10

monopoly that great nineteen Our game control a whole side

00:14

of the board build houses then hotels on it and

00:16

odds of a competitor landing there to suffer huge fees

00:18

are wickedly Hi You take that cash buy more properties

00:21

build more houses and hotels and eventually rule the world

00:24

or at least the board That's a monopoly When you

00:26

own everything and can raise rates it's pretty much whatever

00:29

level the market will pay before just opting Tio do

00:32

nothing and stay at home with a key phrase Here

00:34

is mono and it's not related to the you know

00:37

team kissing disease mano as in one one owner One

00:41

center of price is the only game in town will

00:44

think Microsoft in the nineteen nineties where its operating system

00:47

was pretty much the only way in which computers around

00:50

the globe could work pork Today a Google search which

00:53

is almost a monopoly with some ninety eight percent of

00:56

searches on its servers Is it bad that these companies

00:59

produce such amazingly high desired products that they grew into

01:02

monopolies No no not at all However regulators got all

01:06

willy on them for using that monopoly leverage to then

01:09

restrict business from peripheral competitors And that's a naughty That's

01:14

a no no The key issue revolves around what governments

01:17

defined as quote fair competition unquote like what is fair

01:20

here Well if a gas station uses its leverage as

01:23

a place where SUVs go to drink up is it

01:26

fair for that station to sell a pack of gum

01:28

for five bucks Totally But what if the station forced

01:31

you to buy that stick of gum with every gallon

01:33

of gas Do you have alternatives What if the owner

01:36

of that station owned all of the stations within five

01:39

hundred miles and then forced everyone who filled up toe

01:43

by that five dollar gun with each fill fair pausing

01:46

Yeah probably not Well you could say that they have

01:49

a local monopoly and that they are unfairly leveraging that

01:53

monopoly to there Gummi advantage But okay so that's Monopoly

01:57

What about Manafort's une Well a monopoly Billy was one

02:00

seller Ammen Ops Unni is one buyer Think a coal

02:05

mine in a small town in West Virginia As a

02:07

buyer of labour there simply isn't another employer anywhere remotely

02:11

close I'm an optioning Well certainly a local one What

02:14

about a public school district buying textbooks for its students

02:17

Yeah pretty much of an option E Yes private schools

02:20

by textbooks but they usually represent a small percentage of

02:22

the public school volumes at least in most areas of

02:24

the country And there's not a whole lot of demand

02:27

for American textbooks in Russia right Amazon Well as faras

02:31

books go Amazon probably is well they're responsible for some

02:35

seventy percent of all books sold in the country and

02:37

well over half around the world And that number's going

02:40

up not down So that vaunted man ops any status

02:43

is probably coming The result While Amazon can buy it

02:46

pretty much any price they want to buy at just

02:49

up until the cellar of that book decides it's not

02:51

even worth the effort to go pack up the book

02:53

in a box and ship it to him or Teo

02:55

Get them the log in codes you know to download

02:58

it from their servers That isthe Sellers will sell to

03:00

a monopoly money until the marginal value at our contribution

03:04

of that last book is zero Then they'll stop and

03:07

sit there on a whole pile of books or data

03:08

that they have to store and we'll do a whole

03:10

lot of nothing Well all of this may sound like

03:12

it brings the wheels of the world to a halt

03:14

It doesn't necessarily mean that right if monopolies price their

03:18

products so high that nobody buys well their monopolies worthless

03:21

And if men ops inis pay so little for the

03:23

product they consume That producer stopped producing it Well then

03:27

the need they lived to serve isn't filled and they

03:30

more or less die So there is eventually kind of

03:32

economic detente in this war of power and leverage It

03:36

just you know sheds a lot of blood getting there

Up Next

Finance: Are monopolies evil? Should they be regulated? Should they be illegal?
28 Views

Are monopolies evil? Should they be regulated? Should they be illegal? Monopolies in and of themselves, are neither good nor evil. How they conduct...

Find other enlightening terms in Shmoop Finance Genius Bar(f)