Fragmented Market vs. Concentrated Market: What’s the Difference?

The main difference between Fragmented Market and Concentrated Market is that in a Fragmented Market, many small companies sell products, while in a Concentrated Market, a few large companies dominate.

Before we move to more differences, let’s first understand Fragmented Market and Concentrated Market:

  • Fragmented Market: In a fragmented market, there are many different companies selling similar things, so no one company has a big piece of the pie. It’s like having lots of small slices instead of one big slice.
  • Concentrated Market: In a concentrated market, just a few companies sell most of the stuff, making it seem like one or two slices are way bigger than the rest.

Now, let’s get to Fragmented Market vs Concentrated Market:

Major differences between Fragmented Market and Concentrated Market

Fragmented Market Concentrated Market
Fragmented markets have numerous small competitors, each with a small market share. Concentrated markets are dominated by a few large players.
In fragmented markets, there is intense competition among many small firms. In concentrated markets, competition is limited due to the dominance of a few major companies.
Fragmented markets often have lower barriers to entry, making it easier for new businesses to join. Concentrated markets may have high barriers, restricting new entrants.
Customer loyalty is spread across various players in fragmented markets. Concentrated markets may have higher customer loyalty towards the few dominant companies.
Fragmented markets offer more diverse products and services due to the presence of numerous players. Concentrated markets may have a more limited range of offerings controlled by the dominant companies.

So, these are the main differences between the entities.

Also see:

You can see other “differences between…” posts by clicking here.

If you have a related query, kindly feel free to let me know in the comments below.