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Sidestep and Twist by James Gardner

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BUILDING A TWIST

In Figure 6.1 (see page 161), at point E, we have a situation where the natural market tendency is to switch from competition based on price/performance to competition based entirely on price alone. By this time, there are few alternatives available to firms except to compete on a price basis, unless they have found some way to constrain supply and/or lock out entrants. One way to do this, as I’ve argued earlier, is to ensure you control critical inputs: i.e., either the resources needed for production, or the knowledge needed to utilise those resources.

However, this book has been about a third option: building platforms where increasing consumption creates competitive barriers that make it difficult for anyone else to sidestep. ...

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