Competition Demystified: A Radically Simplified Approach to Business Strategy
• Strategy is outward focused; on the actions of other economic entities
• It is almost impossible to excell in strategic thinking without clarity
• Operational Efficiency is important for profitability – but it is not strategy
• The most important competitive force is «barriers to entry»
Mr. Greenwald is a professor at Columbia University in NY and have for many years been teaching the «Economics of Strategic Behavior» MBA class. I heard about this book through a ...more
A good read for college business students.
- Adam -
The title aptly describes what this book is about: formulating a business strategy, based on the presence or absence of competitive advantages (barriers of entry into an industry - "moat" in the words of Warren Buffett). Greenwald has build a framework from Michael Porter's famous theories, but put ...more
some good points from book are:
1) Importance of fixed costs (not assets) and its relation to
competitive advantage. exmaples given are microsoft, intel etc.
2) a brand doesn't mean that it is a good economic prospect to a company.
e.g. mercedes benz inspite of having a good brand is not an economically
3) customer capitivity (habit ...more
My main takeaways include:
1. Economies of scale experienced by incumbents is a major barrier to entry for new entrants. But this barrier will cease to be effective if the market is growing by double digits. Following the same logic, niche market is easier to ...more
The book strikes me as non-saying. There's a lot of words and cases presented, but minimal critical/useful information presented. Many of the cases are out of date (like Apple around early 2000s which the authors conclude are "going nowhere"), but the faulty analysis proves to me that their framework is not very useful. They're trying to give insight into the business-cases presented fro ...more
My only issue with the book is that when you try and distill/simplify you might overlook or miss important exceptions/black swans.
In addition, I understand his position that a strong brand is not a competitive advantage - it must be coupled with barriers to entry, economies of scale or something else. However, many times in highly competitive markets (restaurants, retail) many ...more
Greenwald logically lays out a framework for assessing the competitive landscape. Grossly simplified it is this. Does the firm have a competitive advantage? If it does, the firm needs to figure how to best manage its interactions with its competitors. If it lacks a comp...more
WMT, KO, Pepsi, Kodak, Coors - many case studies about how companies failed or succeeded based largely on barriers to entry and competitive strategy.
For me, I expected more to be written about luck, managerial prowess, and brand value even though he touches on these topics.
But yes, it's a good book for the library and for gentle reminders of how companies make mistakes.
1. Supply- cost advantage, frequently from prop technology or by know-how
2. Demand- switching costs, based on habit, demand that can't be stolen easily
3. Economies of Scale- larger scale, lower ratio of fixed costs to sales
It is always best to have the combination of economies of scale with a demand advantage (Coca-Cola, etc.)