Hyper Competition
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Transcript of Hyper Competition
HYPER-COMPETITIONJAYANT K.OKE
THE BUSINESS ENVIRONMENT….
AS WE ALL KNOW, THE BUSINESS ENVIRONMENT
TODAY IS: EXTREMELY COMPETITIVE THE COMPETITION IS
RUTHLESS & RELENTLESS IT IS ALSO NOT JUST LOCAL BUT GLOBAL
THE BUSINESS ENVIRONMENT…
IN SUCH AN ENVIRONMENT, BUSINESS ORGANISATIONS EARLIER
ENDEAVOURED TO BUILD & SUSTAIN
COMPETITIVE ADVANTAGE THAT WAS DIFFICULT TO IMITATE.
SUCH COMPETITIVE ADVANTAGE, HOWEVER, PROVED TO BE TEMPORARY
AS COMPETITIVE ADVANTAGE WAS
GAINED BECAUSE OF INNOVATION BUT LOST BECAUSE OF IMITATION
NOW, HOWEVER, THE BUSINESS ENVIRONMENT HAS
BECOME HYPER-COMPETITIVE, WHERE MANY ORGANISATIONS, BOTH IN PUBLIC & PRIVATE
SECTOR, FACE TURBULENT, FAST-CHANGING,
UNCERTAIN BUSINESS ENVIRONMENT.
WHAT IS HYPER-COMPETITION? HYPER-COMPETITION OCCURS WHERE THE FREQUENCY, BOLDNESS &
AGGRESSIVENESS OF DYNAMIC MOVEMENTS BY
COMPETITORS RESULTS IN CREATING CONDITIONS
OF CONSTANT CHANGE &
DISEQUILIBRIUM.
HYPER-COMPETITION
HYPER-COMPETITION REQUIRES ORGANISATIONS TO ACKNOWLEDGE THAT COMPETITIVE ADVANTAGES WILL BE TEMPORARY.
INDEED, HYPER-COMPETITION IS ABOUT DISRUPTING THE STATUS-QUO SO THAT NO ONE IS ABLE TO SUSTAIN LONG-TERM ADVANTAGE ON ANY GIVEN BASIS.
SO, THE LONGER TERM ADVANTAGE IS GAINED THROUGH A SEQUENCE OF SHORT-LIVED MOVES.
HOW TO FACE HYPER-COMPETITION?
AS HYPER-COMPETITION IS A REALITY, THERE IS IMPERATIVE NEED TO COME OUT WITH APPROPRIATE RESPONSES.
BUSINESS ORGANISATIONS WOULD HAVE TO ACQUIRE ABILITIES AS REGARDS:
CHANGE SPEED FLEXIBILITY INNOVATION DISRUPTION OF MARKETS
COMPETITIVE STRATEGIES IN HYPER-COMPETITION
THE BUSINESS ORGANISATIONS CAN ADOPT THE FOLLOWING BROAD STRATEGIES:
REPOSITIONING OVERCOMING COMPETITORS’
BARRIERS OVERCOMING COMPETITORS’
MARKET-BASED MOVES COMPETING SUCCESSFULLY
RE-POSITIONING
AN ORGANISATION POSITIONED AT POSITION 1 OR 2 MAY ATTEMPT TO STAVE OFF
COMPETITION THROUGH MOBILISING SOME DEGREE OF DIFFERENTIATION WITHOUT AN INCREASE IN PRICE
AS THIS IS IMITATED, NEW SOURCES OF DIFFERENTIATION WILL NEED TO BE SOUGHT
THIS WOULD NECESSITATE AGILITY
OVERCOMING COMPETITORS’ BARRIERS
SHORTER LIFE CYCLES UNDERMINE STRONGHOLDS COUNTER “DEEP POCKET”
ADVANTAGES
SHORTER LIFE CYCLES
TODAY, THE TECHNOLOGICAL ADVANCES ARE RAPID (RE-INVENTING YOURSELF)
AS SUCH, KNOWLEDGE / TECHNOLOGY IS GETTING OBSOLETE / OUT-DATED RAPIDLY
TECHNOLOGICAL ADVANTAGES WOULD HENCE BE SHORT-LIVED
PRODUCT LIFE CYCLE WOULD BE , BY FORCE, SHORTER.
HENCE, SUCH ADVANTAGE MAY NOT LAST LONG
UNDERMINE STRONGHOLDS
COMPETITORS MAY TRY TO DOMINATE PARTICULAR AREAS / SEGMENTS
SUCH STRONG-HOLDS CAN BE UNDERMINED
(OUTSOURCING LOCATING PLANTS AT A
PARTICULAR LOCATION DISTRIBUTION CHANNELS etc.)
COUNTER “DEEP POCKET” ADVANTAGES
CERTAIN COMPETITORS MAY HAVE HUGE RESOURCES (DEEP POCKETS) AT THEIR COMMAND, ACROSS THE GLOBE
SMALLER PLAYERS NEED TO FIND WAYS TO AVOID DIRECT COMPETITION BY:
FOCUSSING ON NICHE’ MARKETS MERGING OR BUILDING ALLIANCES
OVERCOMING COMPETITORS’ MARKET-BASED MOVES
BLOCK FIRST MOVER’S ADVANTAGE
IMITATE MARKET / PRODUCT MOVES
BLOCK FIRST MOVER’S ADVANTAGE
ORGANISATIONS MUST NOT ALLOW A COMPETITOR TO ESTABLISH A DOMINANT PRODUCT / DESIGN BEFORE THEY MAKE A RESPONSE.
(SANTRO & WAGON R) ORGANISATIONS, THEREFORE, MAY
HAVE TO CONSIDER DIFFERENT STRATEGIES TO COUNTER THE FIRST MOVER’S ADVANTAGE.
BLOCK FIRST MOVER’S ADVANTAGE:COUNTER-STRATEGIES
LAUNCHING A PRODUCT WITH ENHANCED FEATURES, RATHER THAN LAUNCHING “IMITATION PRODUCT”.
ATTACK A PARTICULAR / SPECIFIC SEGMENT, ERODING THE MARKET POWER OF FIRST MOVER.
FOLLOW A “NO FRILLS ” STRATEGY TO CAPTURE DOWN-MARKET , BEFORE MOVING INTO THE MAIN MARKET OF THE FIRST MOVER.
(AUTOMOBILES/ CELL PHONES/WHITE GOODS)
IMITATE MARKET / PRODUCT MOVES
SUCH MOVES COULD BE DIRECTLY ATTACKING THE MARKETING STRATEGIES RATHER THAN IMITATING THE PRODUCT.
SUCH MOVES MAY BE RELATIVELY EASILY IMITATED (SACHE’ MARKETING).
THE COMPETITOR IS THEN FACED WITH EXACTLY THE SAME PROBLEMS OF SUSTAINING ADVANTAGE AS IT WOULD IN ITS ORIGINAL PRODUCT / MARKET DOMAIN.
COMPETING SUCCESSFULLY
THIS STRATEGY WOULD ENCOMPASS:
PRE-EMPTING COMPETITORS NOT ATTACKING COMPETITORS’
WEAKNESS DISRUPTING THE MARKET BEING UNPREDICTABLE MISLEADING COMPETITOR A SERIES OF SMALL MOVES
PRE-EMPTING COMPETITORS
COMPETITION HAS TO BE PRE-EMPTED BY PRE-EMPTING IMITATION SUSTAINING OLD ADVANTAGE CAN BE A
DISTRACTION FROM DEVELOPING NEW ADVANTAGES
AN ORGANISATION MUST BE ABLE TO CANNIBALISE ITS OWN SUCCESS TO BE MORE SUCCESSFUL !
e.g. KILLING OWN PRODUCT (SHORTER “PLC”) LAUNCHING NEW PRODUCT WITH ENHANCED
FEATURES)
NOT ATTACKING COMPETITORS’ WEAKNESS
ATTACKING COMPETITOR’S WEAKNESS WOULD MAKE THEM AWARE OF IT, & PERHAPS DEVELOP STRATEGIES FOR IMPROVING UPON THE SAME !
“DON’T TROUBLE TROUBLE, UNLESS TROUBLE TROUBLES YOU!”
LET COMPETITION BE BLISSFULLY IGNORANT ABOUT THEIR WEAKNESSES, SO THAT YOU CAN EXPLOIT THEM TO YOUR ADVANTAGE !
DISRUPTING THE MARKET
DISRUPTION OF THE STATUS QUO IS STRATEGIC BEHAVIOUR,
NOT MISCHIEF! INDEED, THE ABILITY TO
CONSTANTLY “BREAK THE MOULD” COULD BE A CORE COMPETENCE
“BLUE OCEAN STRATEGY : MAKE YOUR COMPETITION REDUNDANT”
BEING UNPREDICTABLE
PREDICTABILITY IS DANGEROUS AS COMPETITORS CAN PREDICT YOUR NEXT COMPETITIVE MOVES / PATTERN & QUICKLY LEARN TO PRE-EMPT / IMITATE OR OUTFLANK YOU.
HENCE, SURPRISE, UNPREDICTABILITY & APPARENT IRRATIONALITY MAY BE IMPORTANT(CREATIVITY : ABILITY TO MAKE SENSE OUT OF APPARENT NON-SENSE)
BEING UNPREDICTABLE
MANAGERS MUST LEARN WAYS OF APPEARING TO BE UNPREDICTABLE TO THE EXTERNAL WORLD WHILE INTERNALLY WORKING THE STRATEGIES THOROUGHLY / PROFESSIONALLY
MISLEADING COMPETITORS
MISLEADING SIGNALS OF STRATEGIC INTENT MAY BE USEFUL / HELPFUL
USING GAME THEORY, THE ORGANISATION MAY SIGNAL
MOVES WHICH COMPETITORS MAY EXPECT
BUT WHICH ARE NOT THE SURPRISE MOVES THAT ACTUALLY HAPPEN!
(SBI / CANARA BANK…”KATRAJ” STRATEGY)
A SERIES OF SMALL MOVES
A SERIES OF SMALLER MOVES MAY BE MORE EFFECTIVE THAN A BIGGER ONE-OFF CHANGE
THIS MAKES THE LONGER-TERM DIRECTION / MOVES LESS DISCERNIBLE BY / TO COMPETITORS
SMALLER MOVES CREATE / PROVIDE MORE FLEXIBILITY & ENABLE TO GAIN A SERIES OF TEMPORARY / SHORT TERM ADVANTAGES.
THANK YOU