It's tough. Tough, in fact, because there are some problems in business that are hard, perhaps impossible to fix. One of those intractable problems is market share structure in a well-developed industry.
Typically, a rule of thumb suggests, the market leader has twice the share of the number-two provider, which in turn has twice the share of number three, and then share falls off dramatically after that.
It might be more accurate to say that market share has a direct bearing on profit margins, as well.
The U.S. mobile market does not have precisely that classic stable distribution. Verizon, early in 2012, had about 32 percent share, AT&T about 26 percent.
Sprint had about 16 percent and T-Mobile USA had about 10 percent.
That suggests, to some of us, that the market remains unstable, and would be expected, over time to move in the direction of the "classic" structure. That doesn't mean real-world markets always assume the classic structure perfectly, only that the stable structure of a market will feature dramatic differences in both market share and profitability.
But regulators will have a say, having already firmly suggested that AT&T could not grow to 38 percent market share.
That suggests, over time, combinations of the smaller providers. The point is that one might argue there actually is little executives at firms such as T-Mobile USA and Sprint can do to fundamentally alter the direction of the market, no matter how talented they might be.
Typically, a rule of thumb suggests, the market leader has twice the share of the number-two provider, which in turn has twice the share of number three, and then share falls off dramatically after that.
It might be more accurate to say that market share has a direct bearing on profit margins, as well.
The U.S. mobile market does not have precisely that classic stable distribution. Verizon, early in 2012, had about 32 percent share, AT&T about 26 percent.
Sprint had about 16 percent and T-Mobile USA had about 10 percent.
That suggests, to some of us, that the market remains unstable, and would be expected, over time to move in the direction of the "classic" structure. That doesn't mean real-world markets always assume the classic structure perfectly, only that the stable structure of a market will feature dramatic differences in both market share and profitability.
But regulators will have a say, having already firmly suggested that AT&T could not grow to 38 percent market share.
That suggests, over time, combinations of the smaller providers. The point is that one might argue there actually is little executives at firms such as T-Mobile USA and Sprint can do to fundamentally alter the direction of the market, no matter how talented they might be.
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