Companies with Large MarketShare that Do Not Change Over Time

[BG2008]

I was reading Competition Demystified and Bruce mentioned that companies with very large market share where the market share does not change (less than 2%) over time is a sign of barrier to entry.  In light of this, I'm trying to create a list of companies that have very large market share that do not change over time. It would be fun to populate a list. 

 

1) Coke/Pepsi - 42% and 30% as of 2014

2) Rating Agencies - S&P, Moody's, and Fitch 96.6% according to SEC

3) Intel - 87.7% during Q4 of 2015

4) Microsoft - Windows 7 56%, Windows XP 19%, Windows 8.1 10%, Windows 8, 3.8%

5) Google - 76%, Bing 8.3%, Baidu 7.5%, Global search

6) Boeing/Airbus - 45% Airbus 43% for Boeing

7) Credit Card - Visa 48%, MasterCard 24%, Amex 25%, Discover 5%

8) Sanitary Paper Product - Kimberly-Clark 35.5%, Proctor & Gamble 27.2%, Georgia Pacific 27.2%

9) Telco - VZ 36.5%, AT&T 32.1%, Sprint 15.4%, T-Mobile 10.7%

10) Cable Companies in general - Very large share in local markets

11) Regulated Utilities - Very large share in local markets but subject to regulation

12)

[Gregmal]

Don't have numbers on hand but HSIC/PDCO come to mind. GLDD, ISRG, FNMA/FMCC

[Guest longinvestor]

I was reading Competition Demystified and Bruce mentioned that companies with very large market share where the market share does not change (less than 2%) over time is a sign of barrier to entry.  In light of this, I'm trying to create a list of companies that have very large market share that do not change over time. It would be fun to populate a list. 

 

1) Coke/Pepsi - 42% and 30% as of 2014

2) Rating Agencies - S&P, Moody's, and Fitch 96.6% according to SEC

3) Intel - 87.7% during Q4 of 2015

4) Microsoft - Windows 7 56%, Windows XP 19%, Windows 8.1 10%, Windows 8, 3.8%

5) Google - 76%, Bing 8.3%, Baidu 7.5%, Global search

6) Boeing/Airbus - 45% Airbus 43% for Boeing

7) Credit Card - Visa 48%, MasterCard 24%, Amex 25%, Discover 5%

8) Sanitary Paper Product - Kimberly-Clark 35.5%, Proctor & Gamble 27.2%, Georgia Pacific 27.2%

9) Telco - VZ 36.5%, AT&T 32.1%, Sprint 15.4%, T-Mobile 10.7%

10) Cable Companies in general - Very large share in local markets

11) Regulated Utilities - Very large share in local markets but subject to regulation

12)

 

Good list that captures investment approach of BRK. These are all part of the holdings. Those that are not (3,4,5) are by choice, at least until now. They have a piece of #6, but that is recent.

 

Also, the wholly owned businesses. If anything, market share has grown since coming under BRK. Geico, Iscar, Clayton for example.

[BG2008]

Don't have numbers on hand but HSIC/PDCO come to mind. GLDD, ISRG, FNMA/FMCC

 

My wife works in the dentistry world.  She's told me all about the Henry Schein and Patterson Companies.  I was at a conference with her a while ago at the Javits Center and there are a ton of little guys with no name recognition trying to sell their products.  There was a South Korean company that has gain market share for a "private label" style dental screws. 

 

12) I would add Martin Marietta, Summit Materials, Vulcan Materials,etc.  They are local monopolies protected by the cost of trucking.  The barrier to entry is that it cost too much for competitors to truck their crushed rocks to their territory.  Although a great business, they are cyclical. 

 

13) Obvious the railroads would fall into these categories as it is nearly impossible to replicate the tracks, tunnels, and right of way.  But it's a cyclical business nonethess

 

Keep them coming guys, this is a great list to have

 

[Gregmal]

In light of weekend chores around the house/property, Home Depot and Lowes.

[Packer16]

Some groups I would add are:

 

Real estate brokerage & service - both residential (franchising) & commercial

Auto service (including retailing) - Monro & auto dealers

Aftermarket auto parts - tyres & other parts & services

Distribution businesses with economies of scale - like HVAC, tools, etc.

Local TV & radio - local advertising platforms

 

Packer

[Guest longinvestor]

Lower end candy / chewing gum; sold at checkout / gas stations; M&M, Wrigley, Altoids

Underwear

Light bulbs(Philips, GE, Sylvania)

Salt, Sugar (Mortons, Domino)

Industrial Bearings (SKF, FAG/INA)

Aircraft engines (Rolls Royce, GE, Pratt&W)

 

 

[BG2008]

Some groups I would add are:

 

Real estate brokerage & service - both residential (franchising) & commercial

Auto service (including retailing) - Monro & auto dealers

Aftermarket auto parts - tyres & other parts & services

Distribution businesses with economies of scale - like HVAC, tools, etc.

Local TV & radio - local advertising platforms

 

Packer

 

Packer - Any names you can add to the distribution businesses with large economies of scale?  Names and % marketshare would be very helpful.

[chesko182]

I would definitely add U-Haul to this list, from reports I've read they have 50%+ of the DIY moving market and strong presence in self storage (#4 in the US I think). Both of these growing at a healthy clip.

[Guest Schwab711]

Cigarettes - Altria 46.7%; RAI/Lorillard 35.3%

Mobile Search - Google ~90%

Total Search Engine Advertising - Google 70.2%

Most aircraft parts (for civil and defense) - BE/AV (seats) ~55%; KLXI (fasteners) ~45%

HSA Admin - UNH 20%; HSA Bank 16%; and HQY 15%

Healthcare Distribution - McKesson, Cardinal, and AB

Title Insurance - FNF 34%; FAF 26%; ORI 14%; and STC 11%

Securities Processing and Communication - Broadridge >70%

Consumer Credit Ratings - FICO ~97%

Credit Bureaus - Experian, Equifax, and TransUnion

[tede02]

The two names the jumped in my mind were Luxottica and BroadRidge Financial Solutions.  Also, I recently read that 50% of e-commerce sales begin at Amazon which was somewhat mind blowing. 

[Steven B]

Don't have numbers on hand but HSIC/PDCO come to mind. GLDD, ISRG, FNMA/FMCC

 

My wife works in the dentistry world.  She's told me all about the Henry Schein and Patterson Companies.  I was at a conference with her a while ago at the Javits Center and there are a ton of little guys with no name recognition trying to sell their products.  There was a South Korean company that has gain market share for a "private label" style dental screws. 

 

12) I would add Martin Marietta, Summit Materials, Vulcan Materials,etc.  They are local monopolies protected by the cost of trucking.  The barrier to entry is that it cost too much for competitors to truck their crushed rocks to their territory.  Although a great business, they are cyclical. 

 

13) Obvious the railroads would fall into these categories as it is nearly impossible to replicate the tracks, tunnels, and right of way.  But it's a cyclical business nonethess

 

Keep them coming guys, this is a great list to have

 

BG, that's pretty funny about the Javits Center, I probably walked right past you. Patterson has been having trouble as of late but Schein keeps on plugging along. As Amazon (which was at the dental convention) starts to build market share that should further help Schein's iron grip on the dental market.

[BG2008]

Don't have numbers on hand but HSIC/PDCO come to mind. GLDD, ISRG, FNMA/FMCC

 

My wife works in the dentistry world.  She's told me all about the Henry Schein and Patterson Companies.  I was at a conference with her a while ago at the Javits Center and there are a ton of little guys with no name recognition trying to sell their products.  There was a South Korean company that has gain market share for a "private label" style dental screws. 

 

12) I would add Martin Marietta, Summit Materials, Vulcan Materials,etc.  They are local monopolies protected by the cost of trucking.  The barrier to entry is that it cost too much for competitors to truck their crushed rocks to their territory.  Although a great business, they are cyclical. 

 

13) Obvious the railroads would fall into these categories as it is nearly impossible to replicate the tracks, tunnels, and right of way.  But it's a cyclical business nonethess

 

Keep them coming guys, this is a great list to have

 

BG, that's pretty funny about the Javits Center, I probably walked right past you. Patterson has been having trouble as of late but Schein keeps on plugging along. As Amazon (which was at the dental convention) starts to build market share that should further help Schein's iron grip on the dental market.

 

I didn't go this year.  But why would Amazon help Schein? What was Amazon doing there? 

[BG2008]

The two names the jumped in my mind were Luxottica and BroadRidge Financial Solutions.  Also, I recently read that 50% of e-commerce sales begin at Amazon which was somewhat mind blowing.

 

Pretty good 60 minutes presentation on Luxottica.  Obviously Warby Parker is playing the role of Dollar Shave Club within the Eye-wear space. 

 

Never heard of BroaRidge Financial Solutions - How much market share do they hold?

[Ulrich]

Cornflakes Kellogg / Cereal Partners Worldwide JV (General Mills, Nestle)

 

Board Games ( Hasbro / Mattel / here in Germany Ravensburger). A "u have to have board game" has to be known by many people so that u can play it with little start up time at a party or family meeting. Monopoly, risk etc have an enormous moat.

[DooDiligence]

Beeeeeeeeeeeeer!

[sarganaga]

Water utilities that have both regulated and unregulated components. They have large, mostly unchallenged market share on the regulated side, & also growth opportunities on the unregulated part. Ex Suez, Veolia, United Utilities, Severn Trent

[Steven B]

Don't have numbers on hand but HSIC/PDCO come to mind. GLDD, ISRG, FNMA/FMCC

 

My wife works in the dentistry world.  She's told me all about the Henry Schein and Patterson Companies.  I was at a conference with her a while ago at the Javits Center and there are a ton of little guys with no name recognition trying to sell their products.  There was a South Korean company that has gain market share for a "private label" style dental screws. 

 

12) I would add Martin Marietta, Summit Materials, Vulcan Materials,etc.  They are local monopolies protected by the cost of trucking.  The barrier to entry is that it cost too much for competitors to truck their crushed rocks to their territory.  Although a great business, they are cyclical. 

 

13) Obvious the railroads would fall into these categories as it is nearly impossible to replicate the tracks, tunnels, and right of way.  But it's a cyclical business nonethess

 

Keep them coming guys, this is a great list to have

 

BG, that's pretty funny about the Javits Center, I probably walked right past you. Patterson has been having trouble as of late but Schein keeps on plugging along. As Amazon (which was at the dental convention) starts to build market share that should further help Schein's iron grip on the dental market.

 

I didn't go this year.  But why would Amazon help Schein? What was Amazon doing there?

 

They are getting into Dental products, and they would help Schein by taking out a lot of the little guys, especially the ones who try to be mini-Scheins (full service distribution and dental education and concierge). Speaking to a lot of these guys, they know it's coming.

 

If you go next year drop a line. It gets pretty boring in between meetings.

[scorpioncapital]

Ok, let's invert this thread, seems there are more and more winners with killer market share for decades, I wonder if the standards are coming down. What companies do not have large market share and are likely to change rapidly? or just as bad, what companies have large market shares that are at an inflection point ready to drop year after year.

[BG2008]

Ok, let's invert this thread, seems there are more and more winners with killer market share for decades, I wonder if the standards are coming down. What companies do not have large market share and are likely to change rapidly? or just as bad, what companies have large market shares that are at an inflection point ready to drop year after year.

 

Scorpion,

 

If you don't mind, I'd prefer to keep this list for the large market shares that do not change.  In short, I'm trying to create a "buy at a better price" list now.  I would appreciate if you create a separate thread for that.  I think it would be very useful as well. 

[DooDiligence]

Ok, let's invert this thread, seems there are more and more winners with killer market share for decades, I wonder if the standards are coming down. What companies do not have large market share and are likely to change rapidly? or just as bad, what companies have large market shares that are at an inflection point ready to drop year after year.

 

Dare I say it?

 

Apple / Samsung (Samsung only for handsets...)

[BG2008]

I think we can quickly eliminate Apple and Samsung from this thread because if you read Competition Demystified, there are two requirements

 

1. There must be a few players with large market share

2. Market share must not change dramatically - Less than 2% a year, anything that's more than 5% annualized implies that there's no moat/barrier to entry

 

Motorola, Blackberry, Apple, Samsung, Xiaomi, Nokia, Google, Sony, etc.  The fact that Nokia and Motorola were such dominant players in the past and Apple was so recently dominant all imply that there's very little moat in this space.  Oh, HTC was hot a few years ago on the low end. 

 

 

[DooDiligence]

I think we can quickly eliminate Apple and Samsung from this thread because if you read Competition Demystified, there are two requirements

 

1. There must be a few players with large market share

2. Market share must not change dramatically - Less than 2% a year, anything that's more than 5% annualized implies that there's no moat/barrier to entry

 

Motorola, Blackberry, Apple, Samsung, Xiaomi, Nokia, Google, Sony, etc.  The fact that Nokia and Motorola were such dominant players in the past and Apple was so recently dominant all imply that there's very little moat in this space.  Oh, HTC was hot a few years ago on the low end.

 

Scorpion asked that we invert & as you pointed out, I did...

[scorpioncapital]

There are cases of large market shares that are stable where none of the participants make too much money. It's interesting to study the dynamics. I was reading in Peter Thiel's book that innovators often start in a small niche market and dominate it.

[BG2008]

There are cases of large market shares that are stable where none of the participants make too much money. It's interesting to study the dynamics. I was reading in Peter Thiel's book that innovators often start in a small niche market and dominate it.

 

What are some of the examples of large marketshare and no change over time where participants generate low return on capital?? I would love to know more of them and reverse engineer the rationale.