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According to Porter, What Are the Two Key Factors Affecting

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According to Porter, what are the two key factors affecting the economic logic of competitive advantage?


Definitions:

Reduction

The act of making something smaller or less in amount, degree, or size.

Nondiversifiable Risk

The portion of an investment's risk that cannot be eliminated through diversification, often associated with market-wide risks.

Systematic Risk

The danger that affects the whole market or a part of the market, which cannot be reduced by diversifying investments.

Unique Risk

A risk that affects a very small number of assets, also known as unsystematic risk, specific risk, or idiosyncratic risk, and can be largely eliminated by diversification.

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