The Rule of Three: Surviving and Thriving in Competitive Markets

McDonald's, Burger King, and Wendy's

General Mills, Kellogg, and Post

Nike, Adidas, and Reebok

Bank of America, Chase Manhattan, and Banc One

American, United, and Delta

Merck, Johnson & Johnson, and Bristol-Myers Squibb

Based on extensive studies of market forces, the distinguished business school strategists and corporate advisers Jagdish Sheth and Rajendra Sisodia show that natural competitive forces shape the vast majority of companies under "the rule of three." This stunning new concept has powerful strategic implications for businesses large and small alike.

Drawing on years of research covering hundreds of industries both local and global, The Rule of Three documents the evolution of markets into two complementary sectors -- generalists, which cater to a large, mainstream group of customers; and specialists, which satisfy the needs of customers at both the high and low ends of the market. Any company caught in the middle ("the ditch") is likely to be swallowed up or destroyed. Sheth and Sisodia show how most markets resemble a shopping mall with specialty shops anchored by large stores. Drawing wisdom from these markets, The Rule of Three offers counterintuitive insights, with suggested strategies for the "Big 3" players, as well as for mid-sized companies that may want to mount a challenge and for specialists striving to flourish in the shadow of industry giants. The book explains how to recognize signs of market disruptions that can result in serious reversals and upheavals for companies caught unprepared. Such disruptions include new technologies, regulatory shifts, innovations in distribution and packaging, demographic and cultural shifts, and venture capital as well as other forms of investor funding.

Years in the making and sweeping in scope, The Rule of Three provides authoritative, research-based insights into market dynamics that no business manager should be without.

作者简介 Jagdish Sheth, Ph.D., teaches at the Goizueta Business School of Emory University, where he is the Charles H. Kellstadt Professor of market strategy. He has been a strategy adviser to many prominent companies for over thirty years, including AT&T, Bell South, Cox Communications, Ford, General Motors, Motorola, Nortel, Texas Instruments, Whirlpool, Young & Rubicam, and dozens of other major organizations. Dr. Sheth serves as corporate director of Norstan, PacWest, and Wipro. He is the co-author of Clients for Life, and author of several other books. He is internationally known for his intellectual insight in the areas of market strategies, global competition, strategic thinking, and customer relationship management. He is the founder of the Center for Telecommunications Management at the University of Southern California and the Center for Relationship Management at Emory University. Dr. Sheth is a Fellow of the American Psychological Association, and a Distinguished Fellow of the Academy of Marketing Science and the International Engineering Consortium. He lives in Atlanta, Georgia.

媒体推荐 From Booklist
Although this is the second book coauthored by Sheth and Sisodia, Sheth has written or coauthored many previous books dealing with marketing. The rule in their book is a Darwinian theory of sorts applied to business, stating that "natural competitive market structures evolve by an analogous selection process that favors the strongest and most efficient companies." The forces playing a role in the theoretical application are industry consolidation, government intervention, the establishment of de facto standards, and shared infrastructure. To study and analyze a particular market and the forces affecting it, the authors look to the three largest companies in that market. The companies can be divided into "generalist," with multiple brands that can perform on a global level, and "specialist," with a single brand. The breakdown of the theory into specifics, market snapshots, and notes, all based on the thorough research and expertise of the authors, makes this a good guide for business leaders, analysts, and students, as well as colleagues in advertising and marketing firms. Eileen Hardy
Copyright © American Library Association. All rights reserved

Review
George Fisher

Retired Chairman & CEO, Eastman Kodak Company

The authors bring together an impressive wealth of corporate market histories to present a valuable framework for thinking through corporate strategy. Identifying where a company is in this framework and laying one's strategies against the suggested rules for that position provides an extremely valuable, thought-provoking, and prescriptive tool for strategy development. If you can't clearly say that you are headed to be one of the three dominant generalist survivors in a market, or a strong product or market niche player, you will probably be in harm's way. Wherever you are, The Rule of Three will help you walk through the minefields and around the ditch.

Professor Jeffrey Sonnenfeld

author of The Hero's Farewell, Associate Dean, Yale School of Management

Sheth and Sisodia present original research and analysis that reveal a Nobel-prize-quality realization of how mature markets work. No corporate leaders can wisely guide their enterprises through the turbulence of contemporary competitive markets without this book as their navigational map.

Stan Davis

author of Blur and Lessons from the Future

These two know what they're talking about. This is not about a business fad. With a deceptively simple principle, The Rule of Three richly explains the evolution of industry structures and the appropriate strategic responses. It's built on solid research and powerful insight. I found myself underlining gems on every other page. Whether your company is a full-line generalist or a niche specialist, and especially if it is in the endangered middle, this book is a thoughtful and solid guide for everyone who intends to stay in business for a long time.

Philip Kotler

Northwestern University, Kellogg School of Management

Sheth and Sisodia have written one of the most provocative and original business books to come out in years. Whether your company functions in your industry as a generalist, a specialist, or is stuck in a ditch, you will find a catalog of strategies for surviving, reviving, or prospering.

Dr. William Davidson

CEO, MESA Research

Every decade or two, a breakthrough book appears to shed light on business dynamics and show leaders a superior way to create value. This is that book. Read it sooner, rather than later.

Review
Dr. William Davidson CEO, MESA Research Every decade or two, a breakthrough book appears to shed light on business dynamics and show leaders a superior way to create value. This is that book. Read it sooner, rather than later.

编辑推荐 Amazon.com
The Rule of Three, by Jagdish Sheth and Rajendra Sisodia, offers an innovative take on corporate development that could help leaders put their own operations into a new context that improves competitive strategies and boosts market performance. Sheth and Sisodia, consultants and marketing professors, base it on their contention that just three major players ultimately emerge in all markets--such as ExxonMobil, Texaco, and Chevron in petroleum, and Gerber, Beech-Nut, and Heinz in baby foods. These giant "full-line generalists" are eventually surrounded by smaller "specialists" who successfully concentrate on niche products (such as high-end audio gear) or niche markets (like fashions for professional women), along with midsized "ditch-dwellers" who struggle to reach an audience in between (like second-tier airlines that compete with goliaths on price and regionals on service). The authors examine this pattern of market evolution and the "radical disruption" that can occur when technology or regulation changes or a new entry "succeeds in altering the rules" (as Starbucks did by sneaking up on coffee's Big Three). Appendices present helpful examples of the way this has shaken out in various industries. --Howard Rothman


专业书评 From Publishers Weekly
Business school professors Sheth (Emory University) and Sisodia (Bentley College) argue forcefully that competitive forces, free of government interference or other special circumstances, will inevitably create a situation where three companies and only three will dominate any given market. Whether it's U.S. fast food restaurants (McDonald's, Burger King and Wendy's) or South Korean chipmakers (Goldstar, Hyundai and Samsung), three large firms hold most of the market share. To be successful, everyone else is forced to specialize either by product or market segment. Sure, there are the "Big Two" in U.S. soft drinks, and there really aren't three dominant advertising agencies but these are the exceptions that prove the rule. Markets, the authors explain, are inherently efficient, and efficiency's favorite number is three: two companies would lead to monopoly pricing or mutual destruction, while four guarantees consistent price wars. For managers who follow this logic, the implications are clear. Companies faced with three established competitors may want to battle them indirectly by specializing. Sheth and Sisodia also discuss strategies firms should pursue if they are one of the three major players in a field: e.g., the market leader should be a "fast follower" rather than a consistent innovator, while it's the job of the number three firm to create new products to stay competitive. While the writing veers toward the academic, senior managers of all types are bound to be intrigued by these arguments. Agent, Rafe Sagalyn.

Copyright 2001 Cahners Business Information, Inc.