Great New Yorker article by James Surowiecki titled "In Praise of Third Place." He's analyzing the current video game console wars, but his points are wise and generally applicable:
A recent survey of the evidence on market share by J. Scott Armstrong and Kesten C. Green found that companies that adopt what they call "competitor-oriented objectives" actually end up hurting their own profitability. In other words, the more a company focusses on beating its competitors, rather than on the bottom line, the worse it is likely to do.At the macro level, this is relevant to business strategy. At the micro level, this is relevant to positional bidding wars in paid search. Smart article.
The point is that business is not a sporting event. Victory for one company doesn't mean defeat for everyone else. Markets today are so big ... that companies can profit even when they're not on top, as long as they aren't desperately trying to get there. The key is to play to your strengths while recognizing your limitations.
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