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Waste Management Natural Monopoly

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Submitted By PaulChris2
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There are different types of monopolies; Waste Management (WM) is a prime example of a natural monopoly. They fall under the natural category because they have many landfills and large collection routes in almost every city I know. American citizens tend to throw away more trash than most people around the world; therefore WM is in the right business and country to make billions. Although the job seems relatively easy and aside from equipment, isn’t too hard to start up as a new business, most companies just couldn’t keep up even if they put in 110% effort. Waste Management doesn’t get much competition because it is difficult to establish properly regulated landfills and a customer base to keep up with WM and the ever-growing garbage numbers. This makes for an undisputed leader in waste services in the United States. In today’s world many people are leading companies to a more energy efficient way of life, which WM is doing a surprisingly good job by converting trash into newfound energy. While Waste Management is doing a fantastic job at a boring and stable operation, they still could pump out 7% of its trash into energy (Cardenal). In 2011 the company hauled away 92 million tons of trash, but they then stated that they could convert 100% of that trash into energy and go from a $12.3 billion revenue to more than $40 billion (Cardenal). This separates them widely from all other competition from even making a ripple in Waste Management’s tidal wave of revenues in years to come. Waste Management is a prime example of a natural monopoly.

Andres Cardenal, The Motley Fool Blog Network,

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