Reasons for supply-side fragmentation

Question

What are the reasons for supply-side fragmentation?

Answer 1

Reasons for the Supply-Side Fragmentation are as given here:

1. A few fragmented industries consolidate over time as growth slows and the market grown-ups.

2. Competitive rivalry in fragmented industries can change from moderately powerful to fierce.

KEY CONCEPT:

In fragmented industries competitors usually have broad enough strategic latitude (i) to either compete focus or broadly and (ii) to follow a low-cost, best-cost or differentiation-based competitive benefit.

3. Competitive strategies based on either low cost or product differentiation are feasible unless the industry’s product is a commodity or highly standardized.

4. Focusing on a well-defined market niche or purchaser section usually offers more competitive benefit potential than striving for broader market plea.