Abstract
The group purchasing organization (GPO) industry is a classic example of highly concentrated oligopolistic structure, which is characteristic of an industry where the top 3–4 companies control more than 50 percent of the total market. In general, oligopolistic industry structure is symptomatic of mature industries where demand is relatively stable, the rate of innovation is minimal to moderate, and economies of scale—and therefore consolidation— offer the most promising source of increasing revenue and profits.
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Notes
For a theoretical analysis of the dynamics of competition, industry structure, and individual company strategy, please see M. E. Porter, Competitive strategy: Techniques for analyzing industries and competitors (New York: Free Press, 1980), Chapter 1, p. 74.
Ibid.; C. Becker, Hanging tough. Modern Healthcare 34, no. 33 (August 16, 2004): S1–S5.
J. J. Laffont, The economics of uncertainty and information. 4th ed (Cambridge, MA: MIT Press, 1993), pp. 180–195
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© 2009 S. Prakash Sethi
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Sethi, S.P. (2009). Market Dominance and Anticompetitive Conduct of GPOs. In: Group Purchasing Organizations. Palgrave Macmillan, New York. https://doi.org/10.1057/9780230621725_4
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DOI: https://doi.org/10.1057/9780230621725_4
Publisher Name: Palgrave Macmillan, New York
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