Competition Demystified

It's no mystery: To hold a competitive advantage, you must be able to do something that your competitor cannot. But it's not simple, either, and this book by Bruce Greenwald, a Wall Street fixture, and Judd Kahn, an investment management executive, gives a complete rundown on the basics of strategic thinking with plentiful examples of successes and failures. Novice managers will benefit from the clear, authoritative descriptions presented here, while senior managers might enjoy the fast-moving refresher.

Competition Demystified discusses supply and demand, economies of scale and strategy, competitive strategy (with a sideline into the classic Prisoner's Dilemma Game), cooperation, valuation, corporate development, and so on. Examples from organizations such as Fox, Kodak, Sotheby's, Apple, Nintendo, Wal-Mart, Coca-Cola, and Pepsi, among others, illustrate the points and offer enough historical context to show the results of strategic decisions over time.

"Strategy formulation should have three underlying goals," they write. First, identify where the company sits in its competitive environment. Second, "recognize and manage effectively competitive interactions with other firms on whom the company's performance critically depends." Third, "develop a clear, simple, and accurate vision of where the company should be headed."

Having written an entire book about strategy, the authors acknowledge in the conclusion that strategy isn't everything. Firms with an identical strategy may live or die based on the finesse or lack of it on the management team.

Bruce C. Greenwald is a professor of finance and asset management at Columbia Business School, while Judd Kahn is COO of Hummingbird Management, LLC, an investment management firm.