- Ecological model of competition
The ecological model of competition is a reassessment of the nature of
competitionin the economy. Traditional economicsmodels the economy on the principles of physics(force, equilibrium, inertia, momentum, and linear relationships). This can be seen in the economics lexicon : terms like labour force, market equilibrium, capital flows, and price elasticity. This is probably due to historical coincidence. Classical Newtonian physicswas the state of the art in science when Adam Smithwas formulating the first principles of economics in the 1700s.
According to the ecological model, it is more appropriate to model the economy on
biology(growth, change, death, evolution, survival of the fittest, complex inter-relationships, non-linear relationships). Businesses operate in a complex environment with interlinked sets of determinants. Companies co-evolve: they influence, and are influenced by, competitors, customers, governments, investors, suppliers, unions, distributors, banks, and others. We should look at this business environment as a business ecosystem that both sustains, and threatens the firm. A company that is not well matched to its environment might not survive. Companies that are able to develop a successful business modeland turn a core competencyinto a sustainable competitive advantagewill thrive and grow. Very successful firms may come to dominate their industry (referred to as "category killers").
Sustainable competitive advantage
* Moore, James (1993) "Predators and Prey : A new ecology of competition", "Harvard Business Review", May/June 1993.
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