This paper examines the SCP (structure-conduct-performance) framework on the relationships among concentration, advertising intensity and profitability in Taiwan manufacturing industries. Simultaneous equations models are used to measure the relationships of these variables for a sample of 249 four-digit industries in 1996. Advertising intensity is found to significantly influence profitability, and we also find that profitability responds positively and significantly to advertising. A significant relationship also does exist between advertising intensity and concentration, the results indicate an inverted U-shape (quadratic) relationship between advertising intensity and concentration. Concentration has no impact on profitability, but profitability has a significantly negative impact on concentration.