How Competition Works

It’s not like war, but it’s not like art class, either.

If you want to get good at a game, it helps to understand a bit about the nature of that game. 

Obvious, right? But in his seminal book, Competitive Strategy, Michael Porter argues the game of business is often very poorly understood—even by those in positions of great power.

Everybody gets that, at some level, the idea of business is to generate profits, and that businesses are constrained in their ability to do so by the existence of other businesses (competition.) But ask someone to go one level deeper into how the competitive process works, and you quickly descend into platitudes and confusion.

There are two main types:

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