The 50 greatest business rivalries of all time byFortune
EditorsMARCH 21, 2013, 10:36 AM EDTThese stories of no-holds-barred
competition, contempt, and all-out conflict shaped the modern
business world. Heres what you can learn from them.There was the
time Thomas Edison electrocuted an elephant to demonstrate the
danger of a competitor's technology. The day that NikeNKE-0.41%,
desperate for an advantage over a surging Reebok, signed a college
hoops player named Michael Jordan. And the time the Central Pacific
Railroad laid an astounding 10 miles of track in 24 hours to grab
government payments that the hated Union Pacific would otherwise
claim.Rivalries make great stories, and the greatest rivalries make
the greatest tales -- reason enough to read the following portraits
of brilliance, skullduggery, nobility, mendacity, victory, and
failure. But if you're the driven type who demands more practical
benefits, you'll find those here too. After all, monumental
business battles have changed the world. We cannot imagine life
without cellphones or the Internet, but if tiny MCI hadn't
challenged the titanic AT&TT-2.35%(the No. 4 rivalry in our
ranking), the communications revolution would have played out much
differently. Steve Jobs and Bill Gates (No. 6) ended up selling few
competing products yet contended for 35 years to impose radically
different visions of computing. And a global economy that couldn't
function without air travel is far faster and better because Airbus
and BoeingBA-0.77%(No. 9) have had to fight each other every day
for 40 years.But powerful rivalries can be blinding, obscuring
events beyond the combatants' battlefield. CokeKO-0.51%and
PepsiPEP-0.55%(No. 1) were so busy pounding the daylights out of
each other that they missed an entirely new notion, and today,
inconceivably, the bestselling energy drink in U.S. convenience
stores isn't made by either company. (It's Red Bull.) General
MotorsGM-1.10%and FordF-1.58%obsessed over each other until one day
ToyotaTM-1.79%had stolen the bulk of their profits.What comes
through most strongly in these stories is each conflict's sheer
human intensity. Only a brave novelist would have imagined the
brother vs. brother saga of Adidas vs. Puma (No. 20). Venice vs.
Genoa (No. 7) may look like a dusty tale of feuding city-states,
but it set the tone for hundreds of years of European competition.
The rivalry between the railroads was economic, ethnic, and
spectacular, involving sabotage, deception, and death. Who needs
such lessons? Oh, right, you do. So think of these dramas as
guilt-free pleasures. Then, well prepared for the task, go forth
and pulverize your rivals.--Geoff Colvin
1. Coke vs. PepsiWhy is the battle between Coke and Pepsi -- two
ultimately similar types of sugar water -- the most important
struggle in the history of capitalism? Simply put, their rivalry
transcends time, distance, and culture. It has divided restaurants,
presidents, and nations. It has been waged in supermarkets,
stadiums, and courtrooms. Its many foot soldiers include Santa
Claus, Cindy Crawford, Michael Jackson, Max Headroom, Bill Gates,
and Bill Cosby. In 1886 an Atlanta chemist introduced Coca-Cola, a
tasty "potion for mental and physical disorders." Pepsi-Cola
followed seven years later, though it would be decades (and two
bankruptcies) before Coke acknowledged the company in the way it
had other competitive threats: lawsuits. Pepsi-Cola had made hay
during the Depression. Like Coke, the drink cost a nickel, but it
came in a 12-ounce bottle nearly twice the size of Coke's dainty,
wasp-waisted one. But by the 1950s, Pepsi was still a distant No.
2. It nabbed Alfred Steele, a former Coke adman, who arrived
embittered and ambitious. His motto: "Beat Coke." Coca-Cola refused
to call Pepsi by name -- the drink was "the Imitator," "the Enemy,"
or, generously, "the Competition" -- but it began tinkering with
its business (and imitating Pepsi) to stay ahead. In 1979, for the
first time in the rivalry's history, Pepsi overtook Coke's sales in
supermarkets. It didn't last, and by 1996,Fortunedeclared that the
cola wars had ended. Since then Pepsi, with its increasing focus on
health and snacks, has as good as surrendered. America's favorite
two soft drinks? Coke and Diet Coke.Winner: Coke--Erika Fry
2. Ford vs. GMFord, founded in 1903, and GM, which came along
nine years later, have been warring for 101 years. The epitome of
crosstown rivals -- their headquarters are just 11.5 miles apart --
they face off every day on dealer lots and in motor sports. Both
maintain operations to scour the other's new products. In 2011,
Ford marketing chief Jim Farley was quoted as having said, "I hate
them and what they stand for." Meanwhile, GM chairman and CEO Dan
Akerson recommended sprinkling holy water on ailing Ford luxury
brand Lincoln. "It's over!"Winner: Draw--Alex Taylor III
3. Thomas Edison vs. Nikola Tesla
Hell hath no fury like a mentor scorned. In 1884 world-renowned
inventor Thomas Edison welcomed a brilliant young Serbian engineer
named Nikola Tesla into his New York office. Tesla had been working
on direct current (DC) electricity in Edison's Paris division for a
few years. Edison's DC apparatus reigned supreme at the time. But
Tesla had conceived of a new method using alternating current (AC),
which, unlike DC, could transmit significant amounts of power over
long distances. According to Tesla, Edison dismissed his ideas as a
waste of time, not to mention dangerous given the high voltage
involved. Tesla designed several products for Edison, expecting to
receive a promised $50,000 bonus for his efforts (about $1 million
today). But when Tesla asked for his reward in the spring of 1885,
Edison told him it had been a joke all along. Tesla quit. He struck
out on his own, securing patents and catching the interest of
Pittsburgh industrial titan George Westinghouse. Westinghouse had
been quietly developing power stations using AC. Learning of
Tesla's technology, he acquired his patents, putting the business
might of the Westinghouse corporation behind the inventor. And the
war came. When he heard that Westinghouse was moving into the
electricity business, Edison ridiculed him. But it wasn't long
before Edison was holding shocking public demonstrations to
discredit AC power. To make his point, he electrocuted dogs, cows,
horses, even an elephant. He then put his name behind an effort to
use AC to power the first electric chair. The execution -- which
took place in Auburn, N.Y., in August 1890, lasted eight minutes
and required two attempts -- was a grisly affair. Westinghouse
responded dryly, "They could have done it better with an axe."
Ultimately Tesla's AC technology won the war, but the inventors'
rivalry morphed into one of the greatest corporate battles in
American history. A mega-merger of Edison General Electric and
Thomson-Houston in 1892 created GEGE-1.28%, which went toe-to-toe
with Westinghouse. Long after Edison and Tesla died, their feud
carried on until, in the 1980s, GE chose the right CEO (Jack
Welch), while Westinghouse chose four successive wrong ones. By the
late 1990s, GE was the most valuable company on earth. The original
Westinghouse was no more; the current company with that name is
less than one-tenth GE's size.Winner: Nikola Tesla--Scott
Olster
4. AT&T vs. MCIMCI didn't seem like a giant killer at first.
It was a startup that sold long-distance services via microwave
towers to truck drivers. But chairman William McGowan, a
hard-living son of a railroad engineer, led his company to do just
that. Rather than duck Ma Bell's assaults (predatory pricing), MCI
took her head on, filing a case that would lead to the monopoly's
breakup -- and an antitrust playbook that others would use against
Microsoft decades later. In 1980 a jury awarded MCI $1.8 billion.
Two years later the government ruled Ma Bell a monopoly no more.
David had slain Goliath.Winner: MCI--Ryan Bradley
5. Nike vs. ReebokBlame it on the shoes. The battle between Nike
and Reebok lasted over three decades and created celebrity athlete
culture as we know it today. Initially the two couldn't have been
more different: Phil Knight, a former University of Oregon track
star and a Stanford MBA, tossed his accounting career and formed a
company to import running shoes to the U.S. He named it Nike after
the Greek goddess of victory. Paul Fireman dropped out of Boston
University to take over his family's sporting-goods business. He
acquired the North American rights to British-made sneakers.
Reebok, a line of white-leather women's aerobic shoes named after
an antelope, took off as jogging became a national craze. Fireman
bought out the parent company in 1984 and took Reebok public the
following year. Nike, which had risen to prominence by aggressively
courting male customers and fostering a jock-laden management
culture, missed the market for women's sneakers. Reebok overtook
Nike in 1987 as the latter struggled to catch up. Eventually Nike
regained momentum by signing the man who would become the most
iconic athlete of all time: Michael Jordan. Nike gained not just a
hero athlete but also a telegenic spokesperson who connected with
audiences. On the back of Jordan and the massive popularity of his
Air Jordan brand, Nike surged ahead. (Air Jordan sales eventually
surpassed $1 billion annually.) Reebok responded by signing
Shaquille O'Neal, who once showed up to a meeting with Nike wearing
a jacket emblazoned with a huge Reebok logo -- much to the dismay
of Nike executives. At the 1992 Olympics, Jordan controversially
draped a U.S. flag to hide the logo on the Reebok-sponsored
tracksuits worn by the U.S.'s winning Dream Team. The move
delighted Knight, who baited Reebok further by contributing $25,000
to figure skater Tonya Harding's defense fund after she was accused
of orchestrating a vicious attack on Nancy Kerrigan, a Reebok
athlete. Nike continued to snap up the most popular athletes,
including Andre Agassi, Pete Sampras, and later Tiger Woods, making
Reebok seem lame by comparison. In 2005, Adidas bought Reebok, but
the new, combined company is still a distant second to the Nike
juggernaut.Winner: Nike--Omar Akhtar
6. Bill Gates vs. Steve Jobs
Bill Gates and Steve jobs were as different as night and day,
yet they had much in common. This probably explains the bitterness
of their rivalry. The fruits of their enmity? The creation of the
personal computer. First, the differences: Gates was an
upper-middle-class kid who went to Harvard. Jobs grew up in a
family of modest means and didn't attend many classes at Reed
College. Deeply technical, Gates wrote the code for Microsoft's
early products himself. A born marketer with enough technical chops
to be persuasive, Jobs relied on collaborator Steve Wozniak to
create the first Apple computer. Gates was the poster child for
geeks everywhere. Jobs, meanwhile, was suave from the start. Gates
understood scale and leverage; Jobs grasped style and message. (The
more charismatic figure, Jobs, will have been played on film by
both Noah Wiley and Ashton Kutcher.) Gates and Jobs became the
opposing poles of the frantically growing computing revolution.
Above all else, though, these rivals understood business. Neither
had formal training in the black arts of balance sheets and income
statements. Indeed, neither had graduated from college. Yet both
were preternaturally shrewd about making a buck -- and how to stick
it to the competition. Gates dominated the first two decades of
their rivalry, overseeing Windows' rise as the world's default
operating system. Eventually Jobs welcomed a $150 million
investment from Gates in 1997 when AppleAAPL-2.21%was looking death
in the face. (Attendees of the Macworld conference where the deal
was announced booed Gates' appearance by video.) But during the
last 15 years of his life, Jobs flipped the switch on Gates,
dominating beyond-the-PC segments like music players, smartphones,
and tablets -- all areas of heavy, and mostly fruitless, investment
by MicrosofMSFT-1.33%t. (Irked by this, perhaps, Gates' wife,
Melinda, banned their children from having iPods and iPhones in the
house.) The two were known to trade not-so-subtle barbs. Jobs
diagnosed Microsoft's essential problem as a lack of taste.
Meanwhile, Gates summed up one of Jobs' greatest achievements, the
iPad, by saying simply, "It's okay." Born seven months apart (Jobs
was older), they were friendly in the years before Jobs died.
Having fought each other for so long, they knew better than anyone
what the other had accomplished.Winner: Steve Jobs--Adam
Lashinsky
7. Venice vs. Genoa
The Italian Maritime republics invented many now familiar
features of the business world. It started with tax breaks. Venice
and Genoa sat out the feudal era because they didn't have the land
needed to produce surpluses -- Venice is in a lagoon, and Genoa is
hemmed in by mountains. But they were in the sweet spot for trade.
By lending their navies to rulers fending off invaders, they won
special privileges to trade without paying tariffs. Around the end
of the 12th century, these conditions created an astonishing boom
that fueled their feud. To raise the money to assemble ships,
crews, and cargo, traders came up with the idea of selling shares
in their operations. To spread the risk they invented marine
insurance. The demand for ships spurred the development, at the
Venice Arsenale, of the largest factory complex in Europe before
the Industrial Revolution. Builders there mass-produced vessels
using standardized parts on an assembly line -- it was said that
they could build a galley in a single day. (Dante even gave it a
cameo in hisInferno.) Eventually, to maintain clear records, there
arose a sublime invention: double-entry bookkeeping. Goethe may
have been into the schnapps when he (reputedly) said that
"double-entry bookkeeping is one of the most beautiful discoveries
of the human spirit," but you can see what he was driving at.
Without the concepts ofcreditoanddebitoand the balance sheet,
modern capitalism wouldn't be possible.Winner: Venice--Tim
Smith
8. HP vs. IBMHewlett-Packards' victory over IBM has not been
particularly sweet. In 2006 it surpassed IBM in revenues, a lead it
has maintained. But revenues are not the only measure of success.
Since the earliest days of IT, they have been polar opposites: HP
seeded the engineering-heavy ethos of contemporary Silicon Valley.
IBM's iconic Thomas Watson was more salesman than scientist.
HPHPQ-1.46%has had more CEOs in a decade than IBMIBM-0.51%has had
since the end of the Watson family reign. IBM draws from five-year
plans, while HP is fond of aggressive moves.Winner: IBM--Jessi
Hempel
9. Airbus vs. BoeingIt's about more than airplanes. The $160
billion aviation industry is pivotal to national economies and
thousands of jobs, not to mention civic pride. Boeing once
dominated, but Airbus, a subsidiary of Franco-German defense giant
EADS, edged out a lead in 2003. Political tensions have run hot
since. Trade officials on both continents are fond of scathing
op-eds and public statements alleging malfeasance. Both sides have
a point. A 2011 leak revealed a personal letter from President
George W. Bush to Saudi Arabia's King Abdullah urging the purchase
of Boeing jets. And Airbus has received billions in subsidies. As
Boeing deals with 787 Dreamliner delays, Airbus has taken to
depicting its planes with a Pinocchio nose. Ouch.Winner: Draw--Anne
VanderMey
10. Union Pacific vs. Central PacificAbraham Lincoln kicked off
the race in 1862. The Union Pacific Railroad started building
westward from Omaha while the Central Pacific Railroad built
eastward from Sacramento. They would meet in Utah, each receiving
land and U.S. bonds per mile of track built. Bad blood spilled all
the way down to the workers, exacerbated by racial tension. Pacific
used Chinese immigrant labor; Union was staffed by Irishmen. Many
died from the breakneck pace required to beat the other. (TNT
explosions didn't help things much.) In 1869 trains from both
companies touched noses, and then one passed the other to continue
across the country. The race ended, their feud dissolved.Winner:
Draw--Shelley DuBois
11. McDonald's vs. Burger KingMcDonald's CorporationMCD0.00%.
founder Ray Kroc summed up the intensity of the fast food business
best when he said of his competitors, "If they were drowning to
death, I'd put the hose in their mouth." In the quick-serve
restaurant industry, no two brands have waged war over customer
loyalty as publicly as McDonald's and Burger King. The rivalry
dates back to the mid-20th century as both companies emerged on the
national scene, battling for territory and franchisees. The burger
business is all about share of stomach. There are only so many ways
you can innovate when it comes to a hamburger, so copying
competitors' ideas is standard practice. Take the Big Mac, which
was launched in 1968 as McDonald's answer to the Whopper. Burger
King introduced the Whopper in 1957 when, after realizing it
couldn't compete with McDonald's 15 cent hamburger, it decided the
solution was to sell a bigger burger for 37 cents. Burger King
declared all-out war in 1982 by launching an advertising campaign
that claimed customers preferred the Whopper to McDonald's and
Wendy's. Both chains countered by suing for false and misleading
advertising. In 1997, the Home of the Whopper again took on the
Golden Arches -- this time its fries with the tagline "the taste
that beats McDonald's." McDonald's struck back with its own
advertising campaign. The heated rivalry cooled as Burger King
suffered a revolving door of CEOs and owners, which helped
McDonald's gain more ground. In 2011, for the first time ever,
Wendy's surpassed Burger King to become the No. 2 burger chain by
sales. "In America, McDonald's has won," says Andrew Smith, who
teaches food history at the New School. But don't count Burger King
out just yet: In February the chain got into the latest fast food
battle, Coffee Wars, when it announced a line of coffee-based
drinks like lattes through a partnership with
Starbucks'SBUX-2.06%Seattle's Best Coffee brand.Winner:
McDonald's--Beth Kowitt
12. R.J. Reynolds vs. Philip Morris
13. Hertz vs. Avis
14. Procter & Gamble vs. Unilever
15. Netscape vs. Microsoft
16. Visa vs. MasterCard
17. Ferrari vs. Lamborghini
18. Macy's vs. Gimbels
19. Budweiser vs. Miller
20. Adidas vs. Puma21. CVS vs. Walgreens
22. UPS vs. FedEx
23. Hearst vs. Pulitzer
24. Bayer vs. Tylenol
25. Duracell vs. Energizer
26. Wal-Mart vs. Target
27. NYSE vs. NASDAQ28. Oreo vs. Hydrox
29. Hasbro vs. Mattel
30. Dunkin' Donuts vs. Starbucks
31. Oracle vs. Salesforce
32. Fender vs. Gibson
33. Canon vs. Nikon34. U.S. Steel vs. Bethlehem Steel
35. Sears vs. J.C. Penney
36. Cornelius Vanderbilt vs. Jay Gould
37. J.P. Morgan vs. Goldman Sachs38. Sotheby's vs.
Christie's
39. Louis B. Mayer vs. Jack Warner
40. Blockbuster vs. Netflix
41. Pan Am vs. TWA
42. Comcast vs. Verizon
43. Greyhound vs. Trailways
44. Sony vs. Nintendo45. Este Lauder vs. L'Oral
46. Google vs. Facebook47. Michael Eisner vs. Jeffrey
Katzenberg
48. Marvel Comics vs. DC Comics
49. BMW vs. Mercedes Benz50. Netflix vs. Amazon