Capitalism always trends toward monopoly. Competition only seeks to increase market share. Once market domination is achieved, the "winners" become very hard to dislodge. In general consumer markets, the appearance of many companies often masks the fact that most of them are owned by a larger corporation that says it operates them independently, but still uses its mass to control pricing to its own advantage.
Competition still appears to exist in the bike industry, because bikes are parity products, and there's never been enough money in them to attract major corporate consolidators. The competition is an illusion, because bikes for each purpose use parts from the same menu of suppliers, which is itself pretty small. Some might be slightly better made or better equipped within a price range, but you still have several relatively balanced companies milking the dying market at pretty equal rates. It isn't really competition as such, because they're just divvying up the customers over cosmetic details or accidents of proximity. Trek or Specialized? Who cares? Which shop is closest and maybe offering a little promo?
Competition did exist in the 1990s, and it was brutal. The losers were the riders and the many small shops, as well as small builders who had to find the right size to survive. Some sold out to a bigger player, notably Bontrager, Gary Fisher, and Klein. None of those are sold under their own name anymore, if at all.
It took a while for the collapse of small shops to spread. It lasted into the 2020 pandemic. It was a steady rolling wave, as technological complication made the service side more and more expensive for retailers already struggling with the tightened margins that came out of the cutthroat warfare of the 1990s. Riders suffered because all of that technology has made what passes for a quality bike much more expensive and made mid- and low-price bikes trashy knockoffs of the expensive ones.
In the mid 1990s, Specialized went through The Great Cheapening, during which they seriously downgraded the spec on the Hardrock series, and even the Rockhoppers. These two models had been great buys from the end of the 1980s, building a name for Specialized quality and durability. They started gutting the Hardrock as early as 1991 or '92, largely due to the cheesy quality of Shimano's low-end Rapidfire shifters. The frames were still decent chromoly, but gone were the replaceable chainrings and solidly built derailleurs. Those were disappearing from the whole industry as the manufacturers scrambled to make bigger profits off of the influx of inexperienced buyers that they cynically assumed would never figure it out anyway.
The real Great Cheapening hit with the adoption of aluminum as the frame material of choice. The reputations of the model categories were well established, so customers would come in with an existing good opinion of the bike they'd generally already decided that they wanted. It was around this time that I started avoiding the sales floor more and more, because I couldn't do anything to stop the general rot in the industry. We needed to sell what we had, but I couldn't stand in front of it with a big smile and say it was a great buy. You could still make a case for some of the bikes on the basis of the serviceable features they still had, like replaceable chainrings and halfway decent derailleurs at price points that still didn't scare off buyers. Specialized snapped out of it when Raleigh re-entered the market with absolutely sweetheart spec at all price points and bought a lot of friends in a short time. Specialized went back to providing solid spec (within the choices available), leaving Cannondale as the perennial high-priced bike with embarrassing components.
Cannondale's excuse was that you should be happy to pay for their excellent US-made aluminum frame, the costs of which prevented them from dressing their bikes with the same level of parts you'd get from those "offshore" bikes. Cannondale subsequently changed hands a couple of times, nearly went under, and are now just another "offshore" brand.
As for consolidation, Trek and Specialized are now trying to control huge swaths, but they're hampered by the ubiquity and disrespect of bikes in the developed world. There are a lot of bikes out there, and only a tiny minority of riders who will pay for the good stuff. Among those, there are good little technolemmings who will queue up for the industry's latest marvel, but also grouches like me, who will own a simple bike for decades and do our best to duplicate it pretty exactly if we ever want to supplement or replace it. The industry could make money off of us if they were willing to keep selling the stuff that appeals to us, but the industry chose to emulate drugs and electronics instead. They foster addiction to passing highs and offer replacements frequently to anyone who can still afford to play.
Then there are e-bikes. While the major bike companies are trying to claim market share, the electric bike has too many variations that serve their users well, but are almost nothing like a conventional bicycle except for the coincidental use of pedals. They are much more like the true mopeds of old: a motor vehicle using bike parts to sidestep regulation. The category includes some very bulky vehicles that do useful jobs. Meanwhile, the traditional bike industry can offer the sexy e-road, e-mountain, and e-gravel bikes that just add a little zing to existing bike categories without inviting competition from a newer e-bike specialist with no heritage in that area or interest in farming that minuscule market.
Before long, e-bike competition will settle on a few strong players, like the car business. Cars are another parity product in which the major differences end up mostly being who has produced the most glaring manufacturing defects in a given model year. The stage from genuine evolutionary improvement to flashy gimmicks takes place sooner and sooner in this electronic age. On the other hand, small companies may hang in there just because everything comes out of enormous factories in Asia, even the frames that are painted and labeled to match whatever brand ordered the batch. This will always come at a cost to the consumer. That unbelievably affordable e-bike might have no-name brakes you can't get pads for, or proprietary parts that you can't replace because the company either dissolved after it sold through the first load of crap or changed the spec and don't stock the old version. It's annoying enough when it happens with a bolt or something that a good mechanic can devise a substitute for, but I've also encountered it with control units and wiring harnesses that are more difficult, if not impossible, to fake.
I guess when it comes to consumer goods you have to choose your poison: a small company that will jerk you around because it doesn't have the finances to establish a rock-solid customer service department, or a large corporation that feels it's big enough to ignore the faint whining sounds of aggrieved customers. Look at how long it took Shimano to acknowledge their latest iteration of exploding cranks. Classic example of arrogant, monopolistic corporate behavior.
