Philipp M. Nattermann explains why strategic herding, meaning adopting a competitors successful business plan, may be a good operational tool, but a bad benchmark. When two companies are competing in the same market both of the companies margins decline in the long run. This happens because when more and more companies enter into the same market the amount of profit is split between all of the competing businesses eventually making the market unprofitable. Philipp M. Natermann discusses other possible business plans that may be a better option.
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by in The McKinsey Quarterly on November 02, 2000
