"Every day in my work I observe companies that are drastically affected by the changing ecology of business competition and that seek ways to understand and shape the transformations engulfing them. I tell them about the death of competition.
Not that competition is vanishing. In fact it is intensifying. But competition as most of us have routinely thought of it is dead - and any business manager who doesn't realize this is threatened. Let me explain. The traditional way to think about competition is in terms of offers and markets. Your product or service goes up against that of your competitor, and one wins. You improve your product by listening to customers, and by investing in the processes that create it.
The problem with this point of view is that it ignores the context - the environment - within which the business lies, and it ignores the need for coevolution with others in that environment, a process that involves cooperation as well as conflict. Even excellent businesses can be destroyed by the conditions around them. They are like species in Hawaii. Through no fault of their own, they find themselves facing extinction because the ecosystem around them is itself imploding. A good restaurant in a failing neighborhood is likely to die. A first-rate supplier to a collapsing retail chain - a Bradlees, Caldor or Kmart - had better watch out." (p. 3)
So what Moore is saying, in fact, is that competition is not really dead, it just must be viewed within a larger context. Or, rather, that the traditional view of competition no longer holds; the new approach sees competition as one perspective on how business works, with cooperation between businesses and their suppliers and customers being another equally important perspective. (This is the thesis of another recent and influential book - Co-Opetition by Nalebuff and Brandenburger.)
Central to this new perspective is the notion of a business ecosystem, which Moore defines as:
"An economic community supported by a foundation of interacting organizations and individuals - the organisms of the business world. This economic community produces goods and services of value to customer, who themselves are members of the ecosystem. The member organisms also include suppliers, lead producers, competitors and other stakeholders. Over time, they coevolve their capabilities and roles, and tend to align themselves with the directions set by one or more central companies. Those companies holding leadership roles may change over time, but the function of ecosystem leader is valued by the community because it enables members to move toward shared visions to align their investments and to find mutually supportive roles." (p.26)
Examples of business ecosystems which Moore discusses extensively in the book include:
The leadership and strategic challenges can be summarized as shown below:
The bulk of the book is devoted to an in-depth exploration of this framework, examining the strategic challenges faced by a business ecosystem (and more particularly a leader in a that business ecosystem) in each of the four stages. Moore examines these according to what he calls the 'seven dimensions of competitive advantage' which are:
The Death of Competition is an interesting example of a series of business books that have emerged in the nineties that postulate this concept of a 'business ecosystem', drawing upon examples from nature and ecology of an interacting web of producers, consumers, and influencers (see for example, in addition to the aforementioned Co-Opetition, Rothschild's Bionomics.) It is a very interesting perspective with much to commend it, insofar as it looks well beyond the traditional perspective of business existing to merely clobber the competition, and addresses more the question of the role of business in society overall.
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