The ecological model of competition is a reassessment of the nature of

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...

in the

economy An economy is an area of the production, distribution and trade, as well as consumption of goods and services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the ...

. Traditional

economics Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and intera ...

models the economy on the principles of

physics Physics is the natural science that studies matter, its fundamental constituents, its motion and behavior through space and time, and the related entities of energy and force. "Physical science is that department of knowledge which r ...

(force, equilibrium, inertia, momentum, and linear relationships). This can be seen in the economics lexicon: terms like

labour force The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic regio ...

market equilibrium In economics, economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the ( equilibrium) values of economic variables will not change. For example, in the st ...

capital flows In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. At the macroeconomic level, "the nation's capital stock includes buildings, eq ...

, and

price elasticity A good's price elasticity of demand (E_d, PED) is a measure of how sensitive the quantity demanded is to its price. When the price rises, quantity demanded falls for almost any good, but it falls more for some than for others. The price elastici ...

. This is probably due to historical coincidence. Classical

Newtonian physics Classical mechanics is a physical theory describing the motion of macroscopic objects, from projectiles to parts of machinery, and astronomical objects, such as spacecraft, planets, stars, and galaxies. For objects governed by classical mech ...

was the state of the art in science when

Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——— ...

was formulating the first principles of economics in the 18th century. According to the ecological model, it is more appropriate to model the economy on

biology Biology is the scientific study of life. It is a natural science with a broad scope but has several unifying themes that tie it together as a single, coherent field. For instance, all organisms are made up of cells that process hereditary i ...

(growth, change, death, evolution,

survival of the fittest "Survival of the fittest" is a phrase that originated from Darwinian evolutionary theory as a way of describing the mechanism of natural selection. The biological concept of fitness is defined as reproductive success. In Darwinian terms, th ...

, complex inter-relationships, non-linear relationships). Businesses operate in a complex

environment Environment most often refers to: __NOTOC__ * Natural environment, all living and non-living things occurring naturally * Biophysical environment, the physical and biological factors along with their chemical interactions that affect an organism or ...

with interlinked sets of determinants. Companies

co-evolve In biology, coevolution occurs when two or more species reciprocally affect each other's evolution through the process of natural selection. The term sometimes is used for two traits in the same species affecting each other's evolution, as well ...

: they influence, and are influenced by, competitors,

customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...

s, governments, investors, suppliers, unions, distributors, banks, and others. We should look at this business environment as a business ecosystem that both sustains, and threatens the firm. A company that is not well matched to its environment might not survive. Companies that are able to develop a successful

business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...

and turn a

core competency A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel.Prahalad, C.K. and Hamel, G. (1990)The core competence of the corporation", Harvard Business Review (v. 68, no. 3) pp. 79–91. It can be define ...

into a

sustainable competitive advantage In business, a competitive advantage is an attribute that allows an organization to outperform its competitors. A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...

will thrive and grow. Very successful firms may come to dominate their industry (referred to as ''category killers'').

References

* Moore, James (1993) "Predators and Prey : A new ecology of competition", ''Harvard Business Review'', May/June 1993. {{DEFAULTSORT:Ecological Model Of Competition Economics models Competition

See also

References