4 Stages of Hypercompetition
D'Aveni argues sustainable competitive advantage is not really possible. He shows a mechanism that causes faster and faster erosion of competitive positions.
D'Aveni's four stages of hypercompetition:
1) Advantage based on differentiation (quality) > over time the quality difference gets eroded and price wars begin;
2) Advantage based on raising barriers to entry > over time the barriers get eroded by outflanking and niching by more flexible competitors;
3) Advantage based on know-how > over time the superior know-how gets eroded as technology moves on (Schumpeter);
4) Advantage based on deep pockets (mergers, acquisitions, market power) > over time this fails as pockets are depleted in the attempts to fend-off aggressive competition.
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Brian, USA
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Hypercompetition: Competition is good Competition is good. Kill the weak, eat the slow, and may the best idea and execution win. It got us from horse and buggy to Toyota Prius and from Kitty Hawk to Airbus.
The more competition, the better the products, the greater the value creation, the better the worldwide standard of living. Competition has driven white collar jobs to India, China, Brazil, Mexico, Eastern Europe and Africa. Those economies are now burgeoning. Fight for your share!
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