lThe Competitive Market
nMore Fragmented Market Structures
nLower Entry Barriers
nCompetition on Price and Perceived Quality
nLower Industry Profits
nCompetitive Advantage from Productive Efficiency
nIncremental Innovation
nEpisodic Quantum Innovation
–Rule Breaking
–Punctuated Equilibrium
Traditional Competitive Environments
Not tight oligopolies -witness the breaking down of the airline industry
Since its not tight
Price Wars _Tylenol  taken on by Datril -same medicine for half the price in 1975. Tylenol had 37% of the analgesic market and fought back. Datril got 1% Tylenol forfeited millions. Can be very destructive. Look at the airline industry.
Restraint. In an ideal world lowest cost owns 100% of market. Anti trust, capacity issue and an aversion to risk stop that. Three lowest collude on price
Japanese took over watch industry
Swatch in the 70’s (Sold 50 million in first 5 years)

-Escalation ladder -starts
-Move towards perfect competition