Interesting new book on competition "Competition Demystified – A Radically Simplified Approach to Business Strategy" by Bruce Greenwald, a professor at the Columbia Business School, and Judd Kahn.
This review from the Business Strategy Forum:
According to the authors, in most cases, studying only one factor will do: Potential Entrants. They claim the Barriers to Entry is by far the most important factor in business strategy.
If they are right that would make business strategy formulation a lot simpler!
"Either the existing firms within the market are protected by barriers to entry or they are not," the authors write. " No other feature of the competitive landscape has as much influence on a company’s success as where it stands in relationship to these barriers." And: "Avoiding competition is the only way to escape a level playing field in which anyone can join… [and] only the best… survive and prosper."
Greenwald and Kahn argue that:
• Firms operating without competitive advantages should concentrate all their efforts on being efficient;
• Companies that do have competitive advantages need to design strategy with their competitors in mind;
• Most competition is over pricing or capacity, and there are established techniques for analyzing these situations and devising the right strategies to handle them;
• Cooperation between competitors is possible and beneficial and can be accomplished without breaking the law;
• In an increasingly global economy, competitive advantages still stem primarily from local conditions. Even large international firms need to understand and protect the local sources of their success.
Subscribe ARMORY | Book MOBILIZATION | Engage CAMPAIGN | Register SEMINAR