Shakeout Meaning: Definition, Examples, and Translations
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shakeout
[ËĘeÉŠk.aĘt ]
Definitions
economic situation
A shakeout refers to a situation in which less successful companies in an industry are forced out of business due to market competition, leading to a consolidation of stronger firms. This often occurs after a period of rapid growth in an industry or market.
Synonyms
consolidation, market correction, purge.
Examples of usage
- The tech industry experienced a shakeout after numerous startups failed.
- The economic shakeout left only a few dominant players in the market.
- Investors were wary of the upcoming shakeout in the cryptocurrency sector.
event or exercise
A shakeout is also a term used to describe a situation where people participate in an event or exercise aimed at preparing for or testing a response to a particular scenario. This is often associated with disaster preparedness or field exercises.
Synonyms
Examples of usage
- The emergency services conducted a shakeout drill to prepare for an earthquake.
- Participants found the shakeout exercise to be very informative.
- They organized a shakeout to assess their readiness for a natural disaster.
Translations
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Interesting Facts
Economic History
- The term emerged in the 20th century during downturns when many businesses collapsed while only strong ones survived.
- In the 2000s, the tech industry experienced a major shakeout after the dot-com bubble burst, leading to numerous startups shutting down.
- Shakeouts often follow market booms, where excessive competition forces out less efficient players.
Business Strategy
- Companies often undergo a shakeout phase to refine their products and identify their core strengths against competitors.
- Investors usually observe a shakeout as an opportunity to buy into companies that are likely to emerge stronger post-downturn.
- During a shakeout, remaining companies may consolidate resources, potentially leading to monopolistic tendencies in the market.
Cultural References
- The concept of shakeouts can be seen in films about corporate takeovers and struggles, reflecting on survival in competitive markets.
- Books and articles on entrepreneurship often discuss the inevitability of shakeouts, emphasizing how they clear the path for innovation.
- Popular media sometimes oversimplifies shakeouts, focusing on dramatic narratives rather than the nuanced economic impacts.
Psychology
- The stress associated with a shakeout can lead to survival behaviors among businesses, influencing decision-making processes.
- Stakeholders often exhibit increased anxiety during shakeouts, impacting their investment decisions and market outlook.
- The aftermath of a shakeout can trigger a resilience effect, where surviving companies adapt better to future challenges.
Origin of 'shakeout'
The term 'shakeout' has its origins in the economic context. It first gained traction in the early 1980s during a period of economic recession in the United States. As many businesses struggled to survive in a competitive environment, the term was coined to describe the weeding out process where less efficient firms were eliminated. Over time, 'shakeout' has evolved and been adopted in various contexts, including disaster preparedness exercises and operational drills designed to test responses to critical scenarios. As industries grow and mature, the concept of a shakeout remains relevant as it underscores the natural lifecycle of market dynamics, emphasizing the importance of competition and innovation in driving industry health.