Ecological framework of competition

Organizations:

The ecological model of competition is the reassessment of the bracket of competition in the economy. Traditional economics models the economy on the principles of physics force, equilibrium, inertia, momentum, in addition to linear relationships. This can be seen in the economics lexicon: terms like labour force, market equilibrium, capital flows, in addition to price elasticity. This is probably due to historical coincidence. Classical Newtonian physics was the state of the art in science when Adam Smith was formulating the first principles of economics in the 18th century.

According to the ecological model, it is more appropriate to benefit example the economy on biology growth, change, death, evolution, survival of the fittest, complex inter-relationships, non-linear relationships. Businesses operate in a complex environment with interlinked sets of determinants. companies co-evolve: they influence, and are influenced by, competitors, customers, governments, investors, suppliers, unions, distributors, banks, and others. We should look at this institution environment as a business ecosystem that both sustains, and threatens the firm. A organization that is not well matched to its environment might non survive. Companies that are experienced to establish a successful business model and reorganize a core competency into a sustainable competitive advantage will thrive and grow. Very successful firms may come to dominate their industry spoke to as category killers.