Rule of 3 is for Developing Markets
In my opinion rule of 3 is not for developed markets but for developing markets
Leaders, challengers and followers are basically the 3 main stages via each organisation moves.
Now the basic concepts says that the sum of the markets shares of top 3 companies is equal to or more than 70 %.
The challengers improve the product & try to pull the leader while the leader maintains the cost and tries to keep the prices down, volume more and invest in new product for new markets, making the existing products into cash cows.