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Hypercompetion Strategy

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Hypercompetition is an environment characterized by intense and rapid competitive moves, in which competitors must move quickly to build advantages and erode the advantages of their rivals.

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Hypercompetition speeds up the

dynamic strategic interactions

among competitors.

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Hypercompetitive behavior is the process of continuously generating new competitive advantages and destroying, obsoleting, or neutralizing the opponent's competitive advantage

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……..thereby creating disequilibrium, destroying

perfect competition, and disrupting the status quo

of the marketplace.

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Strategy in the Hypercompetion Era• Vision for Disruption

• Capabilities for Disruption

• Tactics for Disruption

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Vision for Disruption

• Envisioning disruptions that create

Superior Stakeholder SatisfactionSuperior Stakeholder Satisfaction

• Using Strategic SoothsayingStrategic Soothsaying as a means of seeing and creating opportunities for disruption

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Capabilities for Disruption

• Building the capability for SpeedSpeed

• Creating the capability to Surprise Surprise opponents

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Tactics for Disruption

• Shifting the RulesShifting the Rules of Competition

• Using SignalsSignals to influence future dynamic strategic interaction

• Executing Simultaneous and Simultaneous and

Sequential Strategic ThrustsSequential Strategic Thrusts

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Vision for Disruption

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Superior Stakeholder Satisfaction

Superior stakeholder satisfaction is the key to winning each dynamic strategic

interaction with competitors.

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Superior Stakeholder Satisfaction

The process of developing new advantages or undermining those of

competitors begins with an an

understanding of how to satisfy understanding of how to satisfy

customers.customers.

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Superior Stakeholder Satisfaction

By discovering ways to satisfy customers, the company can identify its next moves

to seize the initiative.

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Superior Stakeholder Satisfaction

But customers are not the only stakeholders that must be satisfied. By By

empowering employeesempowering employees, the company can gain the internal motivation and

vision needed to carry out those moves.

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Strategic Soothsaying

Strategic soothsayingStrategic soothsaying is a process of seeking out new knowledge necessary

for predicting or even creating new temporary windows of opportunity that

competitors will eventually enter but that are not now served by anyone else.

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Strategic Soothsaying

These opportunities can be found by creatively combining products,

understanding trends in the business environment that will open up new

opportunities, and serving new customer markets with the existing capabilities of

the firm.

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Capabilities for Disruption

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Speed and Speed and SurpriseSurprise

Speed and surpriseSpeed and surprise are needed to take advantage of opportunities, to move

quickly against competitors, or to respond to a competitor's attack.

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Speed and Speed and SurpriseSurprise

SpeedSpeed is also a key part of competitive advantage, because it enhances the

ability to serve customers and to choose the moment in time that the firm will

enter the market (e.g., as a first mover or a fast follower).

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Speed and Speed and SurpriseSurprise

Surprise is also crucial to success.Surprise is also crucial to success. The longer the first mover can delay entrance

by competitors into the market by stunning them with a surprise attack, the

more time there is to create a strong position and make gains before the

competition responds.

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Tactics for Tactics for DisruptionDisruption

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Shifting the Rules of Competition

Shifting the rules of competition is concerned with actions that redefine redefine

the battlefield.the battlefield. By shifting the rules of the game, the company creates new

opportunities to satisfy customers.

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Shifting the Rules of Competition

The company finds new ways of satisfying customers that transform that transform

the industrythe industry, such as adapting the personal computer to serve the

mainframe computing industry or inventing the disposable razor to

transform the market for standard razors.

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SignalsSignalsSignals — verbal announcements of

strategic intent — are important preludes to more powerful actions. Signals can

stall the actions of competitorsstall the actions of competitors or create uncertainty that erodes their will

to defend against attacks.

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SignalsThey can preannounce or fake preannounce or fake

aggressive offensive movesaggressive offensive moves that alter the behavior of competitors. Thus,

signals can be used to disrupt the status quo and interactions between companies

and thereby create an advantage.

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Simultaneous and sequential strategic thrusts

Simultaneous and sequential strategic thrusts are the use of a series of actions

designed to stun or confuse stun or confuse

competitorscompetitors, disrupting the status quo to create new advantages or erode those

of competitors.

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Simultaneous and sequential strategic thrusts

Whereas traditional strategic actions have been treated one at a time, actions actions

in hypercompetitionin hypercompetition are used in combinations that are difficult to unravel

and difficult to defend against.

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Simultaneous and sequential strategic thrusts

By manipulating competitors' reactions using a series of simultaneous or a series of simultaneous or

sequential actionssequential actions, they result in the initiating company's advantage.

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Source of Reference:Richard D’Aveni, Hypercompetition : Managing the Dynamics of Strategic Maneuvering, Free Press.