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CHAPTER 5 Stock Research Checklist—Busin... > Has the Company Dominated in a Parti...

Has the Company Dominated in a Particular Segment of the Market?

When a company concentrates its product or service to address a particular segment of the market that is overlooked by other big and established business, the company can grow bigger. If it is constantly growing in that space, the company can dominate that particular market. Early investors can make a lot of money in these kinds of companies.

The Wal-Mart story is a classic example of this. When Sam Walton was establishing his stores, he started opening in small towns. Sears and other big retailers overlooked small towns. Sam Walton’s wife refused to live in a city where more than 45,000 people lived. Because of this condition, he started opening stores only in small towns. That decision gave Wal-Mart early successes. Then he started opening new stores in adjacent towns. He tried to concentrate on those small towns one by one. Before competitors noticed, Wal-Mart was dominating the small-town market. Early investors made a great deal of money if they held the shares for a long time.


  

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