Elements to make mining competitive are cheap power, good connectivity, cheap heat management, and technology development. Cartels can form that take advantage of either of these elements. As long as all of these elements are not overly abundant in only a few geographical regions, mining can stay decentralized.
A market entity is not restricted to a single geographical location. McDonald's have locations all over the world.
That's not the point. McDonald's is also not a cartel. Geography plays a part in where you can have beef or pork sandwiches as well. My point is that nobody has every competitive edge in everything. Anyone that can gain a competitive edge over certain resources will attempt to exploit them. This merely addresses profitability. If you want to realize an actual profit, you will need customers, and customers need incentives.