The phases of acquiring a monopoly - Northland Vapor Company

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The phases of acquiring a monopoly

October 16, 2019

The phases of acquiring a monopoly

or dominate share of a market are one in the same these days, and it would appear that the vape and eLiquid world is about halfway through this acquisition & transition series of phases.  This post might seem a bit conspiratorial in the sense that I'm talking about what is potentially happening with all this shady business in the vape industry right now, but it's also based on observations of other previous market spaces and similar moves by big corporate entities of the past.

Keep in mind these phases are in respect to an already large existing parent corporation waiting to hedge it's weight behind a newer company to exist as a new dominate entity in the market space. Basically the start up and sell out method we've seen so frequently in silicon valley, or as I prefer to phrase it the South Park-esque rules of; Start up, Cash in, Sell out, Bro down. 

Phase zero is quite simple, you let the market play out fairly unimpeded as companies attempt to bring their best products to market.  Their products reach the general public and they decide which one is best, establishing brand loyalty as more and more companies compete for same space.  Eventually one wins outright, taking the dominate share of the market leaving the minority to it's previous competitors.  

Phase one is buying up the majority winner in that original space. You've seen this plenty of other times in the tech world with companies like google and facebook purchasing up companies that would either threaten their own already existing dominate market share, or alternative companies that could potentially invade in on that space, or have a close enough market relevance to be a worthy asset to the parent corporation. 

Phase two is the media smear campaign to sour in the public's palate to whatever existing competition still remains that could not be purchased outright, or which are too numerous individually to purchase.  AKA the small businesses that have popped up along the way are basically viewed as weeds taking up space in the market that could be instead driven to the parent companies already purchased dominance. Alternatively if a smear campaign isn't feasible or applicable, a hype campaign is employed.  The tactic is inverted but the result is the same.

Phase three is another round of purchasing, only on the medium players still existing in the market who can survive the smear/hype campaign, but still not large enough to have been purchased in phase one.  This usually involves writing some big checks to the C-Level employees and or key stake holders in those companies.  I imagine the conversation goes something like this; "We'll give you a fraction of what you would make over the next 5 years in a nice lump sum, and if you refuse you're going to be out of business before then anyways so really this is a good deal."  I'm pretty sure in the vape world we are currently in this phase, as spacejam just yesterday out of business quite literally overnight. 

Phase four is complete litigation against any remaining players, and establishing regulations so no new players can even afford to enter the market in the first place.  You're seeing this right now legislatively with these temporary bans, and you can probably safely bet when the vape hysteria dies down Juul, AKA big tobacco, will be the only company that is "compliant" enough to sell these products.  Further litigious action will be taken at this point by any small players that remain in the game with cease and desist actions, and anyone left at this point will be targeted with a complete scorched earth lawsuits resulting in legal fees that they will surely not be able to afford. 

Phase five is the bro down, having completely decimated any competition and enjoying the newly established monopoly on the market, the smear/hype campaigns will phase out and the overall public attention to the market space will be left purposely ghosted in the wind.  Nothing to see here people, move along, this is the way it has always been so there's no sense in questioning it.   

There you have it, a simple yet thorough guide to taking over any new market space, assuming you have the bankroll and the chutzpah to do it. What do you think? Is this conspiratorial nonsense, or just the way business plays out in this day and age? 

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