Regarding a competitive market structure, would cigarettes be considered competitive?

As a former investor, it was only sensible to study the industry, otherwise what is the basis for investing? The market consists of Philip Morris with aprox. 50-55% share, Reynolds American Tobacco at roughly 20% and a host of smaller players such as Lorillard, Liggett, Loews, British American, et al none of which have a share higher than 3%. Now, lets clear away the confusion: Entry into the industry is relatively cheap, you need a rolling/packaging plant, which you can pick up at a modest price, since the industry went into consolidation in the 80's. And you need a supply agreement with tobacco grower. You will price your product as either a specialty or value brand and offer reasonable terms to distributors( who are always looking to sell something new). No competitive pressure because there are so many brands and line extensions out there you could be under the radar for years. So, are you making any profit? Absolutely, gross margins run at 80-90%, operating margins ( that is after all selling, marketing admin etc. costs) run at 30-40%, take out for income taxes and Net Income is very healthy indeed. Last point, the consumers, like it or not, are chronic users and thus there are no suitable substitutes for this product (oligopoly?), so if 1 company like Philip Morris takes a price increase, they all do. Call these companies cash cows.

You might want to check out some things about an oligopoly because the tobacco industry (cigarettes) is a pretty good rendering of it.