What Is a Gorilla?

"Gorilla" is a term used to describe a company that dominates its industry but does not necessarily have a complete monopoly. A gorilla firm achieves its dominanꩵce through exerting control over the pricing and availability of its products relative to competitors in the industry. This influence on price forces competitors to resort to alternative tactics to compete, such as through differentiating their offerings or aggressive marketing tactics.

Understanding Gorillas

A gorilla is a company whose market share and size allow it to set the terms for other companies in the same industry. In economic terms, a gorilla is large enough to act as a 澳洲幸运5官方开奖结果体彩网:price maker.

A gorilla does not need to have an official monopoly to dominate its competitors; however, its broad dominance in the industry may lead many people to view the situation as a de facto monopoly. The use of the gorilla term🐻 is a reference to t💯he fact that an 800-pound gorilla can do whatever it wants.

Many gorillas have a shot at monopolizing the market. However, federal 澳洲幸运5官方开奖结果体彩网:antitrust laws, most notably the 澳洲幸运5官方开奖结果体彩网:Sherman Act, make collusion and monopolistic behavior illegal in the United States.

However, other firms still have an incentive to compete with an industry gorilla. A careful price cut or increase in production may attract the gorilla's customers, or bring new customers into the market.  These price adjustments can be subtle, including better credit terms, faster delivery, or other free services.

Gorillas are most effective when demand for the gorilla's product is not price sensitive. This is why gorillas are more effective in the short term. Over the long term, prices often become elastic as consumers find cheaper 澳洲幸运5官方开奖结果体彩网:substitutes for the product.

Benefits of Being a Gorilla

Being a gorilla carries many benefits. Due to economies of scale, gorilla companies can earn higher margins, allowing them to reinvest more in their business and increase their advantages over the competition. The dominant position provides a larger marketing platform, allowing the marke♈t leader to set the bar for what customers expect from their suppliers.

Corporate partners prefer to work with gorillas, which can provide enormous endorsement and distribution benefits. Gorillas are also able to attract the top talent in their industry, ✅due to their size and prestige. They are also able to raise money more easily and cheaply than their competitors.

Example of a Gorilla

One classic example of an industry gorilla is Microsoft's dominance over the operating systems market during the 1990s. Although it was not the only provider, Microsoft's competitors were very small, had tiny market shares, and generally avoided facing Microsoft head-on. Microsoft was able to drastically outspend these smaller companies on innovation and marketing, and it used that power to squeeze these competitors on price and distribution. In 1998, Microsoft faced antitrust lawsuits for anticompetitive behavior.