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