Business Administration, Management, and Operations Commons^™

An Empirical Examination Of The "Rule Of Three": Strategy Implications For Top Management, Marketers, And Investors, Can Uslay, Ayca Altintig, Robert D. Windsor

Business Faculty Articles and Research

This study represents the first empirical examination of the "Rule of Three," a theory at odds with several popular notions regarding industry structure and business performance, including the positive linear market share-performance relationship. In general, the findings from more than 160 industries support the Rule of Three and provide five main insights: First, there appears to be a prevalent competitive structure for mature industries in which three "generalist" firms control the market. Second, industries that conform to this structure tend to perform better than industries with a fewer or greater number of generalists. Third, both "specialists" and generalists outperform firms …