Since the production of aluminum is capital intensive, it is subject to large economies of scale. The production of aluminum is intensive in energy, as smelting requires a lot of electricity. Also it is intensive in raw materials (bauxite). Therefore, Alcoa (The Aluminum Company of America) controlled quickly the procurement of these crucial inputs. Signing up for hydroelectric power before construction and managed to stake out all the best sources of North American bauxite for itself.
The efficiency gains made entry more difficult and protected its leadership.
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