The ‘Rule of Three’ in Europe

The EBF site is dead. If you click through you will be taken to the Internet Archive site to find an archived copy.

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.

Key messages:
– 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.

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