What are some limitations of the S-C-P diagram?

• Does not precisely specify the relationship between structure, conduct, and performance variables • In practice, often difficult to decide which variables belong to structure, conduct or performance • In practice, often difficult to define the relevant market or industry for analysis • Most variables are difficult to measure empirically – entry barriers, product differentiation, collusion • In practice, hard to tell collusion and economies of scale apart: a positive association between concentration and profitability could arise - through collusion OR - through cost savings achieved large firms (economies of scale)