Category killer

Category killer

Category killer is a term used in marketing and strategic management to describe a product, service, brand, or company that has such a distinct sustainable competitive advantage that competing firms find it almost impossible to operate profitably in that industry. The existence of a category killer will eliminate almost all market entities, whether real or virtual. Many existing firms will leave the industry, thereby increasing the industry's concentration ratio.

An example of a category killer business is eBay. eBay as an online auction site has a natural monopoly, as buyers and sellers will naturally gravitate to the largest, most liquid market. As a result, their business has almost no competition and has forced similar auction sites like the ones run by Yahoo! into a very small portion of the market. Jupiter Communications has estimated that eBay earned 90% of all revenues in the consumer-to-consumer auction market in the year 2000. [ cite news
last= Wolverton
first= Troy
url= http://www.news.com/Net-antique-site-lending-a-hand-to-eBay-sellers/2100-1017_3-246361.html
title= Net antique site lending a hand to eBay sellers
publisher= CNET News
date= 2000 September 28
accessdate= ]

Another type of category killer, and the definition most associated with the term, is a big box retail chain such as Best Buy or Toys "R" Us which is focused on one or few categories of merchandise and offers a wide selection of merchandise in these categories at relatively low prices. The emergence of such stores has taken a toll on many department stores.

References


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  • category killer — cat‧e‧go‧ry kil‧ler [ˈkætgri ˌkɪlə ǁ gɔːri ˌkɪlər] noun [countable] MARKETING a very big specialized international chain store that causes local competitors to go out of business: • Category killers focus on one area of product, offering wider… …   Financial and business terms

  • category killer — noun (commercial jargon) A large retailer with the power to force its competitors out of business • • • Main Entry: ↑category …   Useful english dictionary

  • Category Killer — Large companies that put less efficient and highly specialized merchants out of business. Category killers can attain this status by being cheaper, easier, bigger, or more popular than the competition. One of the best examples of a category… …   Investment dictionary

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