Rule of Three

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|Assignment One: “The Rule of Three” |

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|Group #5 |

|9/27/2012 |

|A review of the gold mining industry with the objective of using empirical evidence to test theories presented in “Competitive markets and The|

|Rule of Three” (Sheth, J. and Sisodia, R., 2002) |

Overview

The Rule of Three states that in mature markets with few regulatory restrictions, the market will be comprised of “three full-line generalists, along with several product or market specialists” (Sheth & Sisodia, 2002). Full-line generalists are typically companies that carry a full line of products sold in a broad market. An example of a full-line generalist would be WalMart as it sells a range of clothing, food, and home décor. In contrast, product/market specialists carry limited product lines sold in narrow or niche markets. An example of a product/market specialist would be Thyme Maternity as it solely focuses on clothing that are suitable for expecting mothers. The Rule of Three suggests generalists are volume-driven and should experience an increase on their return on assets (ROA = net...