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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 entity, 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. eBay now commands over 90% of the consumer-to-consumer auction market. One type of category killer is a retail chain (for example: Home Depot, Best Buy, Toys R Us or Borders) 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 such stores has taken a toll on the department store.
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