Author(s): Pallav Bose, Swarup Kumar Dutta, Amit Kumar
This study investigates the strategic challenges faced by managers of generalist firms in Indian industries. Specifically, the 'Rule of Three' framework is used to analyse industry concentration levels and their role in industry evolution. By starting with a sample of 20 industries and later expanding to 95, the study identifies key insights for firms with a generalist positioning. We found that in low-concentration industries, small generalist firms with smaller market shares may coexist, maintaining healthy competition. However, for large generalist firms with more than 40% market share, we observed a significant contrast in financial performance between high-concentration and medium-concentration industries. More precisely, large generalist firms in highly concentrated industries performed poorly compared to those in moderately concentrated industries. Based on these insights, further analysis was conducted by synthesizing previous literature to develop evidence-based recommendations for managers.