In our increasingly digital, mobile, and global world, the existing theories of business and economics have lost much of their appeal with the phenomenal rise of Chindia, the reality of Brexit, the turmoil caused by the Covid-19 pandemic, and the seismic shifting of the global center of gravity from west to east. In the area of innovation, the traditional thinking that a developed country, often the US, will come up with the next major innovation, launch at home first, and then take it to other markets does not ring true anymore. Similarly, the world where conglomerates go bargain-hunting for acquisitions in emerging markets has been turned upside-down.
This book reveals and illustrates the Global Rule of Three phenomenon, which stipulates that in competitive markets only three companies (which the authors call "generalists") can dominate the market. All other players in the market are specialists. Further, whereas the financial performance of generalists improves as market share increases, specialist companies see a decrease in financial performance as their market share increases, as the latter are margin-driven companies. This theory powerfully captures the evolution of global markets and what executives must do to succeed. It is based on empirical analyses of hundreds of markets and industries in the US and globally. Competitive markets evolve in a predictable fashion across industries and geographies, where every industry goes through a similar lifecycle from beginning to end (or revitalization). From local to regional to national markets, the last stop in the evolution of markets is going global. The pattern is so consistent that it represents a distinct and natural market structure at every level. The authors offer strategies that generalists and specialist should follow to stay competitive as well as twelve expansion strategies for global companies from emerging markets.
This book chronicles this global evolution and provides impactful managerial implications for executives and students of marketing and corporate strategy alike.
Author(s): Jagdish Sheth, Can Uslay, Raj Sisodia
Publisher: Palgrave Macmillan
Year: 2020
Language: English
Pages: 289
City: Cham
Preface
Acknowledgments
Contents
About the Authors
Abbreviations
List of Figures
List of Tables
List of Boxes
1: What Is the Rule of Three?
What Is the Rule of Three?
The Shopping Mall Analogy
How Competitive Markets Evolve
Common Elements in Market Evolution
The Ditch
How Margin Players Get Pulled In
How Volume Players Get Pushed In
Strategies for Generalists Versus Specialists
Cost Structure
Scope of Offerings
Positioning and Branding
Distribution Channels
Organization and Operations
When the Rule of Three Does Not Apply
Conclusion
2: Strategies for Generalists, Specialists, and Ditch Dwellers
Strategies for Generalists
Strategies for Specialists
Defensive and Offensive Strategies for Competitors
Strategies for #1 Generalists
Strategies for #2 Generalists
Strategies for #3 Generalists
Strategies for Niche Players
Strategies for Ditch Dwellers
3: How Industries Evolve, Mature, and Revitalize
Start-up Phase
Growth Phase
Maturity/Aging Phase
How Do Industries Revitalize?
Substitute Technologies
Changing Demographics
Changing Policy and Regulation
Growth of Emerging Markets
4: Ten Ways to Innovate and Revitalize Industries
How Are Industries Born?
1. Transformation from Manual to Automation
2. Outsourcing
3. Reducing Friction in Commerce and Consumption (Accessibility)
4. Tap into Unmet Needs (Affordability)
5. Convert Wants into Needs
6. Unbranded to Branded Products and Services
7. Leverage Platforms and Infrastructure
8. Government Policy
9. Invent Here, Market There
10. Eureka!
How Are Industries Organized?
5: Evolving to the Global Rule of Three
The Rule of Three and Globalization
Transition from Local to Regional to Continental to Global
The Case of the Tire Industry
The Case of the Automobile Industry
The Case of Aircraft Manufacturing
The Case of the Airline Industry/Alliances
Global Rule of Three Generalizations
6: The New Triad Power: Impact on Global Markets, Resources, and Politics
Impact of the New Triad on Global Markets
Impact of the New Triad on Global Resources
Impact of the New Triad on Geopolitics
7: Global Expansion Strategies for Multinationals from Emerging Markets
Growth of Multinationals from Emerging Markets
Competitive Strategies of Multinationals from Emerging Markets
Reverse Brand Life Cycle
Emerging Market to Emerging Market to Advanced Markets
Go Global with Diaspora Markets
From Diaspora to Mainstream Markets
Go Global with Key Accounts
OEM to Branded Products and Services
Leverage Skill Advantage
Leverage Country-of-Origin Reputation
Leverage Domestic Scale Advantage
Reverse Innovation
Focus Regionally
Focus and Make Acquisitions in Advanced and Mature Markets
Competitive Advantages of EMNCs in Executing Identified Strategies
The Ultimate Prize: Consolidate Resources to Prevail as a Global Leader
8: Epilogue: What Does the Global Future Hold?
The Past, Present, and Future Locus of Power, Economic Development, and Geopolitical Alignments
Global Rule of Three: Overview, Underlying Principles, and Key Takeaways
Appendix: Past, Current, and Future Top Three Players in Global Markets
Projections into Global Markets
The Global Big Three
Index
