Characteristics of a Monopoly Business
1. They are either regualated monopolies or there are unregulated monopolies but if it is an unregualted monopoly it would be bad for the regulators to know about it. Therefore, most unregulated monopolies would try to show the market as very big or would encapsulate multiple fields in order to show their market share as very low. The financial characteristics of true monoplies include
1. Increase in per unit EBITDA
2. Increase in gross margin per unit or gross margin %
3. Negative working capital cycle
4. Either the market is niche with very little scope for larger players entering the market, thus protecting the existing market size
5. Healthy return on capital employed with no need for dilution
6. Boring business with no large people coming in.
These are all a reflection of the following
1. Economies of sclae
2. Brand Power
3. Network effect
4. License/Patent
Technology Improvement either improve the technology 10x than the existing technology or invent someting completely new.