Rule Of Three

Definition

Some experts pointed out that every

The "three strong" principle explains why such a situation is dominated by 3 big companies and other small and medium-sized companies, and points out how to decide the development strategy.

In reality, the vast majority of industries are not able to form such a "tripartite confrontation" situation until the end.

Evidence shows that these three markets will eventually occupy 70% to 90% of the market share.

This theory also refers to those three strong companies, whether they are comprehensive hands of the market or specialized companies, who are rooted in their own market segments, and will succeed in the end.

origin

Two American professors, RajendraSisodia and JagdishSheth, have carried out a series of empirical research and empirical research around the "three strong rules". Based on the study of hundreds of American large national companies and local small and medium-sized companies over the past few years, Sisodia and Sheth have found that every market is dominated by three market leaders. Other companies that surround these three members can gain advantages on a niche product (NicheProduct), such as producing high-end audio equipment, or be successful in a niche market (NicheMarket), such as providing fashion products for professional women.

Sisodia and Sheth say most of the market looks like a large shopping mall, with various stores selling several large shopping malls.

Application

Enterprises of all sizes can formulate corresponding competitive strategies according to this rule.

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Advantage

The thumb principle is simple but applicable.

At the same time, pay attention to the market position of the company and its competitors.

Help small and medium-sized companies find a way to change before they get into a desperate situation.

limit

Many exceptions can not be explained.

There may be other factors that need to be further explored.

Some people believe that there is no such magic "3" at all. The reason why the three strong enterprises in the United States caused the tripartite confrontation is the anti-monopoly law of the United States.

In other countries outside the United States, its application scope is also limited.

For the European Union, perhaps the "four strong" is more appropriate.