How Industry Competition Theory Can Help Address U.S. Politics

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[upbeat music] Healthy competition. It's typically what propels businesses to make better products and services. Better products and services equal happier customers, and happy customers equal happy businesses. Win-win. But what if I told you there was a booming $16 billion US industry that thrives off a win-lose scenario, an industry where customers are perpetually dissatisfied and new competitors don't stand a chance? This industry has not only been dominated by a duopoly, that is, just two players, for the last 150 years, but the industry itself threatens overall American competitiveness and social progress. You think that industry would never survive? Welcome to US two-party politics. When former CEO Kathryn Gayle and Harvard Business School professor Michael Porter took a fresh look at US politics as if it were an industry, they applied Porter's famous Five Forces framework to assess its competitive health. The dynamics between rivals, buyers, suppliers, new entrants, and substitutes are what keep any healthy private sector industry on its toes. However, in the US politics industry, Gayle and Porter found unhealthy competition in which the rivals, Republicans and Democrats, do well even if the customers, citizens and voters, lose out. They were also surprised to discover that US politics, while dysfunctional, really isn't broken. In fact, it's doing exactly what it was designed to do. You see, the rules of the system have been intentionally created by and for the entrenched duopoly of Republicans and Democrats to keep themselves in power. They divide their customers, the public, up according to partisan interests. This polarization ensures customer loyalty and reduces accountability. Each party competes to reinforce the division instead of delivering real solutions that would require compromise. Moreover, channels for reaching customers, like media coverage and advertising, and suppliers, like candidates and lobbyists, have been co-opted to serve the duopoly's agenda. And most customers have very limited influence, primarily because the threat of competition is almost nonexistent. The barriers to entry facing new competitors, like a new political party, or substitutes, such as independents, are colossal,