Shakeout
In short
A shakeout is a period when many companies in a specific industry fail or leave the market at once. This usually happens during economic shifts or when new technology changes how business is done.
In plain words
It is like a filter for businesses. Weak or inefficient companies cannot survive the pressure, leaving only the strongest ones behind to dominate the market.
A simple example
During the rise of digital streaming, many traditional video rental shops went out of business. This shakeout left only a few major players like Netflix to control the industry.
Why it matters
Shakeouts can lead to more stable markets with stronger companies. However, they can also reduce competition if only one or two giants remain.
Easy to mix up
Do not confuse it with a market crash, which is a sudden drop in prices across the whole economy.