Original question on Quora: Why does the Harvard Business School, Michael Porter, teach the essence of business strategy is the elimination of competition, by regulation if possible. Is this legal? Is this basically socialism or communism?
My response: Trying to pin this on Michael Porter is ridiculous. He says no such thing. Based on the way the question is phrased, I wonder if there is an ideological purpose in asking it.
But in any case, there is a serious issue behind the question, namely an increasing level of oligopoly (decreasing levels of competition) among companies in many US industries. See, for example, “Big Companies Are Getting a Chokehold on the Economy Even Goldman Sachs is worried that they’re stifling competition, holding down wages and weighing on growth.” or.
“America Has a Monopoly Problem—and It’s Huge”.
One theory about this trend is that it is partly due to growing power of corporations in Washington. That, in turn, may be traced partly to the increasing role of money in elections, largely as a result of the infamous Supreme Court “Citizens United” decision. For example, the way Trump’s massive tax cuts were put together without any hearings and in a VERY short period of time, and the amount of “goodies” for many industries in the resulting package, would never have happened with previous massive changes in taxes.
An effective strategy in some highly concentrated industries is to persuade the government to selectively regulate your industry, in ways that favor large and established companies. That is, all companies may experience higher costs because of a regulation, but if your company can respond more cheaply than anyone else, it is still a net win for you. An example is pharmaceuticals. For example pharma companies increasingly use the legal system, regulations, and side deals to keep generic drugs off the market for years after drug patents expire. The industry has also been very effective at keeping foreign competitors out – e.g. blocking imports by individual citizens from Canada.
(I buy one medication at $1 per pill from abroad, when it costs $30/pill at the local Rite-Aid. But it takes a lot of research and effort.)
Source: (32) Why does the Harvard Business School, Michael Porter, teach the essence of business strategy is the elimination of competition, by regulation if possible. Is this legal? Is this basically socialism or communism? – Quora