Jagdish Sheth and Rajendra Sisodia say their research demonstrates that in mature, competitive markets there is only space for three large volume-driven companies alongside several niche specialists.
– Efficient markets eventually get organised into two kinds of competitors: full-line generalists and product/market specialists.
– Generalists are large scale companies, which compete across a range of products and markets, and are volume-driven. Specialists operate on a smaller scale, focus on niche markets and tend to be margin-driven.
– The Rule of Three holds that in competitive, mature markets, there is only room for three full-line generalists, along with several product or market specialists.
Authors: Jagdish Sheth, Rajendra Sisodia
Source: European Business Forum (EBF)
Subjects: Economics, General