Articles Tagged with commodity

HAG16Over the past couple of decades education publishing has been characterized by waves of consolidation into a handful of giant conglomerates. This is a typical pattern in an industry as products commoditize.

If products are effectively interchangeable (commodities) competitors gain competitive advantage through industrial scale cost management (economies of scale). Bigger warehouses, off-shoring production, distribution networks built on fleets of professional salespeople, and access to capital drove smaller players into the arms of Pearson, McGraw-Hill, Houghton Mifflin (Harcourt), and Scholastic.

We can see that they became huge – but what were the market forces that drove them to do this?