|Overview: Rule Of Three
The theory that large mature markets are typically dominated by three competitors.
Identifying competitive opportunities and risks.
What is the Rule Of Three?
John Spacey, updated on
The rule of three is the economic theory that large mature markets are typically dominated by three competitors. The theory suggests that a new industry with hundreds of competitors will experience mergers, acquisitions and shakeouts that see three large firms emerge. The rule of three also suggests that a firm that dominates an industry with few competitors is vulnerable to competition. Large dominant firms tend to become less responsive to customers and innovation, opening up space for a competitor or two.
Business TheoryThis is the complete list of articles we have written about business theory.
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