Introduction to Monopoly Examples
Under monopoly, only one firm exists in a particular industry. There is one single seller who sells the unique product with no substitute and no competitors. The seller enjoys the power of the setting of the prices according to his own wish. There are several examples of the monopoly according to the different situations. The different examples of the monopoly structure considering the different possible areas are as given below
Examples of Monopoly
Below are the different Examples of Monopoly:
Start Your Free Investment Banking Course
Download Corporate Valuation, Investment Banking, Accounting, CFA Calculator & others
These are some of the most famous monopolies, mainly for historical significance,
- Carnegie Steel Company created by Andrew Carnegie (now U.S. Steel). From the late 19th century to the early time of the 20th century, Carnegie Steel Company maintained singular control over the supply of steel over the market. Carnegie Steel Company during the period of monopoly was effectively setting the price for the steel nationally without the free market competition. The regulation of the Government was not present initially. Andrew Carnegie was successful in creating the monopoly for a long time in the steel industry after which J.P. Morgan took possession of the company by buying it and melded the same into the U.S. Steel.
- Another famous example of a monopoly of historical significance is the American Tobacco Company. This company maintained singular control over the supply of Tobacco over the market. Government regulation was also not present initially. However, this company got dismantled after the creation of the antitrust regulation in the form of the Sherman Antitrust Act. The Supreme court in the year 1911 ordered the American Tobacco Company to dissolve.
Example 2 – Luxottica
Most of us have never heard of the company ‘Luxottica’ despite the fact they are the biggest manufacturer of glasses in the world. It is founded in the year 1961 in one of the small villages in Italy. It started a business at the International level in the early ‘80s and it started taking over the other eyewear company whichever it can afford. Many sunglasses companies of international levels are selling their sunglasses in their own brands like Ray-Ban, Vogue, Killer Loop, T3, Armani, etc. It has also controlled the prime vision care provider in the United States such as Eye Med and Vision Care. It is one of the examples of a monopoly.
Example 3 – Google
One can’t even think of the internet layout without Google. Its competitors are Microsoft and Yahoo but they own a very small share in the market that too in the downward trend. Google makes the majority of money from advertising and the same can be clearly seen that it controls 60% of the global advertising revenue. It has a good revenue generation through the process of harvesting user data with the track over our online activity and popping up with the advertisement as per our searching history and locations. Smaller advertisers lag as they are not having the level of user data as Google is having. Thus Google undoubtedly is one of the largest monopolies in present in the world. The company, in fact, monopolizes several other different markets in the world.
Example 4 – Natural Monopoly
The rare availability of natural resources like oil makes it create a monopoly called a natural monopoly. John D Rockefeller who was the founder of Standard Oil along with his partners took advantage of both the rarity of resource and price maker.
At the earlier time when there were a lot of oil companies who were manufacturing most of their finds, companies hardly bother of environment and pump waste product directly into the river without undergoing to the cost of researching proper disposal. They were also using a shoddy pipeline which was very prone to leakage. Later standard oil started creating a monopoly along with developing infrastructure aiming to cut down the cost and dependency. Despite the eventual breakup of the company in 1911, the government understands that this upcoming monopoly will create a reliable setup, infrastructure and deliver low cost. The profits of the standard oil and a good trend of dividend helped in gaining investor trust and thereby resulting in more investment from the investors which helped it to grow larger further.
Example 5 – AB InBev
The company came into existence after the merger of two huge brewing companies named Anheuser Busch and InBev. After the merger, they become the distributor of over 200 types of beer across the world. Many well-known companies like Budweiser, Corona, Beck’s, Stella Artois, Leffe, Skol, Hoegaarden, etc are selling beers in their name by purchasing the same from AB InBev. The marketing companies of beers might be different but their manufacturers are the same.
Example 6 – Social Media Market
The social media market which we can’t think is ripe for monopoly but it is. Facebook is the leader in the social media market with a maximum percentage of the market share. It is considered to be a monopoly because it lacks direct competition for any competitor, it has the pricing power and it has the dominant user base all over the world.
Moreover, in the year 2014, it also acquired WhatsApp who was giving good uptrend competition to Facebook in the social media segment. In this way, almost the majority of share for the social media market lies with Facebook only. Thus Facebook is a good example of a monopoly in the social media market.
Conclusion – Monopoly Examples
Thus monopoly is the industry or the sector which is dominated by one firm or corporation. It is the market structure that is characterized by the single seller who sells his unique product in the market and becomes large enough for owning all the market resources for the particular type of goods or service. For controlling and discouraging the operations of the monopoly, different antitrust laws are put in the place. These antitrust laws help in prohibiting the practice of restraining the trade and allowing free trade and competition in the market, thus protecting the consumers. Thus the above-mentioned examples are some of the examples of monopoly in the different industries. There are various other examples as well which shows that a monopoly exists in various different markets or areas.
This has been a guide to Monopoly Example. Here we provide the top 6 examples of Monopoly along with detailed explanations. You can also go through our other suggested articles to learn more –