Business Definition for: dominant firm
dominant firm
company within a market that has the largest
market share
, such as McDonald's or Procter & Gamble. Dominant firms have a competitive advantage by virtue of their size, name recognition, and resources. They may hold onto their dominance through various strategies, including
innovation
,
brand extension
, and
price wars
, that trailing firms do not have the resources to match. Dominant firms often have greater influence with distributors and can get their products into more retail outlets and in better display positions than trailing firms.
See also
Antimerger Act
,
Clayton Act
Related Terms:
1950 consumer protection amendment to Section 7 of the Clayton Act that applied federal legislative barriers to corporate mergers that may impair or impede market competition, including mergers involving the acquisition of assets as well as stock; also called Celler-Kefauver Act. Section 7 of the Clayton Act had been previously limited to mergers involving only the acquisition of stock and therefore left a loophole that was closed by the Antimerger Act.
1914 federal consumer protection legislation that prohibits certain monopolistic practices and other impediments to free market competition, including price discrimination, mergers that may lessen competition, tying agreements and exclusive dealings. The Clayton Act also holds corporate officials personally liable for damages resulting from activities in violation of the Act's rulings. The Clayton Act was designed to be more effective in preventing threats or potential threats to competition than the 1890 Sherman Antitrust Act. The Sherman Act does not come into play until after a violation is committed and has impeded competition. The Clayton Act is enforced by the Federal Trade Commission in conjunction with the Department of Justice.
Copyright c 2000, 1994, 1987 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
