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.eBay as an online auction site has a natural monopoly and sellers will naturally gravitate to the largest, most liquid market.
An example of a category killer business is eBay. 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 all revenues in the consumer-to-consumer auction market.
Another type of category killer, and the definition most associated with the term, is a chain such as 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.
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