Marketing Papers

Document Type

Journal Article

Date of this Version

1-2003

Publication Source

California Management Review

Volume

45

Issue

2

Start Page

131

Last Page

150

DOI

10.2307/41166169

Abstract

Shakeouts loom large in the landscape of all fast-growing markets. During the boom period, an unsustainable glut of competitors is attracted by forecasts of high growth and promises of exceptional returns. Even when the market is already crowded, more entrants keep arriving. These followers are often naïve about the barriers to entry and don't realize how many others are also poised to enter at the same time. Reality intrudes with a bust that precipitates the exit of more than 80 percent of the players through failure or acquisition. This shakeout is triggered by some combination of disappointing growth, pricing pressures that degrade profit prospects, or shortages of crucial people and financial resources.

Copyright/Permission Statement

Published as Day, G.S., Fein, A.J., & Ruppersberger, G. Shakeouts in Digital Markets: Lessons from B2B Exchanges. California Management Review 45, no. 2: 131-150. © 2003 by the Regents of the University of California.

This is a pre-publication version. The final version is available at http://dx.doi.org/10.2307/41166169.

Copying and permissions notice: Authorization to copy this content beyond fair use (as specified in Sections 107 and 108 of the U. S. Copyright Law) for internal or personal use, or the internal or personal use of specific clients, is granted by the Regents of the University of California for libraries and other users, provided that they are registered with and pay the specified fee via Rightslink® or directly with the Copyright Clearance Center.

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Date Posted: 15 June 2018

This document has been peer reviewed.