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Sidestep and Twist by James Gardner

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KEEPING COMPETITORS OUT

 

 

 

 

 

 

 

 

 

 

 

 

 

CHAPTER THREE

 

 

In most markets, it is a combination of supply and demand that results in a particular price. As we saw earlier, sidesteps are all about managing demand by manipulating price/performance and adoption S-curves.

Basic economics tells us that if demand expands, suppliers will enter markets to provide a service. When they do, prices drop as everyone strives to get as many customers as possible. Since a new, lower price favours later entrants (whose costs are lower because they haven’t had to make all the first-mover mistakes), it is natural for those going into new business to try to stop anyone else following them.

What mechanisms do companies have to do this? Patents, trade secrets ...

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