summary ofCompetition DemystifiedBook by Bruce C. Greenwald, Judd Kahn

second KEY POINT

Business is about gatekeeping

The concept of strategy has considerably evolved, but one aspect remains clear and stable: it's big. Strategic decisions involve significant resource allocations from top management. It’s a long-term process, much like planting an orchard and waiting for it to bear fruit.Strategies are not just plans to make money but carefully crafted measures that focus on outsmarting competitors. So, a business must leverage its competitive advantages to do what others can't. As a renowned Harvard professor and leading authority on competitive strategy, Michael Porter claims that five forces affect it most:• Competitors within the industry
• Barriers to entry
• Suppliers
• Customers
• Threat of SubstitutionBut they're not equally important; the most critical is barriers to entry. This advantage determines how easily new firms can enter the market or existing ones can expand. If one factor protects you, it's tough for others to enter the market and grow, saving you from the hassle of sharing demand.Moreover, strategic concerns can become irrelevant for open markets without barriers to entry. They are level playing fields where anyone can compete, and only the best players survive. Companies don't need to worry about competitors and their behavior in these conditions.In such cases, the only possible strategy is operational effectiveness, which focuses on improving quality and productivity. It's an internal matter, more tactical than strategic, so it doesn't include external interactions. Yet, it can be crucial for survival if you have no protection from new entrants within your niche.

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