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Industry Structure

A group of companies are described in terms of number and size. Having many firms in an industry increases competition. The size distribution of firms impact rivalry as well. If an industry has many relatively small firms, it is called a fragmented industry. If a small number of firms control a large share of an industry’s output or sales, it is termed a consolidated or concentrated industry. Competition in fragmented industries is often more intense than in concentrated industries.

Industry structure impacts strategy and hence results of firms.

Porter's “five forces analysis” framework is influenced by industry structure and the analysis is sometimes consider as part of a structural analysis.

Oligopoly, monopolistic competition and monopoly are terms used for specific industry structures.

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