Competition Demystified: A Radically Simplified Approach to Business Strategy

by Judd Kahn (Author) Bruce C. Greenwald (Author)

Competition A Radically Simplified Approach to Business Strategy

Genres: Business, Nonfiction

300 pages, Hardcover

Published January 1, 2022

Reviews

[Daniel Ottenwalder · Rating 5 out of 5]

Competition demystified
Number 1: is there a competitive advantage in this market, with a small number of dominant firms (i.e., a stable market share)? And number 2: high ROIC? If so, what are the barriers to entry? If not, then it all boils down to tactics around efficiency. How do you protect the barriers to entry is the strategic thinking necessary to win in long term.

The book makes the case that the main competitive advantage to focus on is barriers to entry, i.e., the threat of new entrants, which can be created by customer captivity, high switching costs, and economies of scale to create a cost advantage.

This boils down Porter’s five forces of supplier power, customer power, threat of substitute, threat of new entrants, and competitive rivalry to one key theme to evaluate.

The book provides multiple case studies across different industries that exhibit these competitive advantages, such as Walmart/Coors, which demonstrate the two coins of using local economies of scale to produce a high ROIC and the challenges of expanding into other markets depending on how your rivals meet you.

Walmart was able to expand into other markets but clearly lost some of the local economies of scale they had from their roots in Arkansas with very high market share and a distribution center that serviced all of the local market. This is reflected by the decline in ROIC from the 80s to 2000s but given Kmart and other competitors had even more mounting challenges, Walmart was still a golden boy.


Coors was similar in a clear economy of scale for servicing Colorado where it had a large beer plant with vertical integration for their ingredients. When they were forced to expand they actually lost their eye on the key market and AB was able to take market share from them.

The book focuses on two competitive games that play out amount new entrants and existing competitors. The prisoner dilemma (focusing on pricing) and the entry/preemption game (focusing on capacity)

[Ani Sriram · Rating 4 out of 5]

apologies for the brevity but my assessment of this book is quite simple.

i think any serious investor should understand business strategy at a high level, and this book acts as a modern critique of porters 5 forces, arguing that threat of entry is quite literally the most important force and should thus be taken the most seriously from a strategy perspective.

i gave this book a 4 because some of the case studies are not as comprehensive as others but nonetheless they are still relevant and useful for study.

[Ryan Blanchette · Rating 3 out of 5]

Unfortunately this book falls into the category of Ivory tower business, which are books written by professors or management consultants that have great business ideas and often good case studies, but try to do too much in weaving together disparate concepts to present a "roadmap" on how a manager should at his business and industry.

But good concepts like a view that barriers to entry is the most important of the 5 forces, view of competitive advantages in geography and some others

[Andrés López · Rating 4 out of 5]

I think Competition Demystified is a very valuable book because it helped me understand competitive advantage in a much clearer and more practical way. Before reading it, I thought strategy was mainly about being better than competitors, but the book showed me that real strategy is more about understanding barriers to entry, economies of scale, customer captivity, and whether a company actually has a defendable position.

[Johan Monge · Rating 5 out of 5]

Many microeconomists have beaten around the bush of industry analysis, yet Greenwald is the only I've found to incisively delineate the importance of barriers of entry and different competitive advantages; this book shaped how I analyze companies and I often find myself referring back to it

[Ishan · Rating 5 out of 5]

Lot of good anecdotes on competition and what it takes to have a competitive advantage - makes definitive statements with rules that are able to be hard-verified

[Shawn Smith · Rating 3 out of 5]

Some very strong practical points are covered in this book, however; there's also parts that are too academic and lack applicability.

[Avery · Rating 2 out of 5]

first two chapters were interesting and then it went downhill from there… most things mentioned are kind of obvious / maybe the book is outdated

[Reader · Rating 4 out of 5]

Read bit less positive sum that I prefer to view the world