The Rule of Three - by Jagdish Sheth & Rajendra Sisodia (Paperback)

Book Synopsis

Name any industry and more likely than not you will find that the three strongest, most efficient companies control 70 to 90 percent of the market. Here are just a few examples:

• 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.

Review Quotes

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.

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.

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.

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.

About the Author

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.