The Rule of Three: Surviving and Thriving in Competitive Markets
Years in the making and sweeping in scope, this major work explains how in every industry three major players emerge to dominate the market, with the balance filled by specialist niche players, and how this determines business strategy. In an indispensable guide to predicting trends in mergers, competition and profitability, Jagdish Sheth and Rajendra Sisodia offer crucial insights for businesses large and small. Based on extensive studies of market forces, they show that the vast majority of industries follow a distinct pattern and ultimately fall under the influence of ‘the rule of three.’ Evidence suggests that three full-line, volume driven competitors eventually emerge to capture between seventy and ninety percent of a given market. Documenting how markets evolve into two complementary sectors, generalists, which cater to a large, mainstream group of customers at both the high and low ends of the market, and any company caught in the middle is likely to be swallowed up or destroyed. Sheth and Sisodia show how most markets resemble a shopping centre with specialty shops anchored by large stores. Drawing wisdom from these markets, THE RULE OF THREE offers counterintuitive insights, which inform suggested strategies for the ‘Big 3’ players, as well as for mid-sized companies that may want to mount a challenge and for specialists who want to flourish.