Professor G.F. Gause, known as “the father of mathematical biology,” put two very small animals (protozoans) of the same genus in a bottle with an adequate supply of food. If the animals were of different species, they could survive and persist together. If they were of the same species, they could not. This observation led to Principle of Competitive Exclusion: No two species can coexist that make their living in the identical way. Competition existed long before strategy. When any pair of species competed for some essential resource, sooner or later one displaced the other. Today more than a million distinct existing species have been cataloged, each with some unique advantage in competing for the resources it requires.
The richer the environment, the greater the potential number of competitors—and the more severe the competition. For millions of years, natural competition involved no strategy. By chance and the laws of probability, competitors found the combinations of resources that best matched their different characteristics. Competitors crowd each other out. The fittest survive and prosper until they displace their competitors or outgrow their resources.
Remember Gause’s Principle. Competitors that make their living in the same way cannot coexist—no more in business than in nature. Each must be different enough to have a unique advantage.
What differentiates competitors in business may be purchase price, function, time utility, or place utility.
Can evolution be planned for in business? That is what strategy is for.
What is strategy?
Strategy is a deliberate search for a plan of action that will develop a business’s competitive advantage and compound it. For any company, the search is an iterative process that begins with a recognition of where you are and what you have now. Your most dangerous competitors are those that are most like you. The differences between you and your competitors are the basis of your advantage. Unless a business has a unique advantage over its rivals, it has no reason to exist. Market share is a meaningless number unless a company defines the market in terms of the boundaries separating it from its rivals. These boundaries are the points at which the company and a particular competitor are equivalent in a potential customer’s eyes. The trick lies in moving the boundary of advantage into the potential competitor’s market and keeping that competitor from doing the same. The competitor that truly has an advantage can give potential customers more for their money and still have a larger margin between its cost and its selling price.
