Palestra: Winning in the Age of Hypercompetition - Richard D' Aveni
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Palestra sobre como vencer numa era de Hyper Competição realizada por Richard D' Aveni (Professor na Tuck School of Business at Dartmouth College) na ExpoGestão 2004.
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Palestra: Winning in the Age of Hypercompetition - Richard D' Aveni
- 1. WINNING IN THE AGE OF HYPERCOMPETITION Strategies for Revolutionizing Markets ExpoGestao Joinville, Brazil June 4, 2004 Professor Richard D'Aveni Tuck School of Business at Dartmouth College © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 2. Goals Leading in Times of Rapid Disruption To Crystallize Our Intuition About Market Dynamics To Examine How Traditional Strategic Thinking Fails in a Dynamic Market To Suggest Ways to Understand and Compete in the Dynamic World of the Future © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 3. Traditional Sustainable Advantage Period Competitive of Advantage Advantage Launch Slow Counter Attack Time Hypercompetition and Unsustainable Advantage Short Period Competitive of Advantage Advantage Launch Rapid Counter Attack Time © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 4. Old Models Don’t Work © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 5. Agenda Topic I - What is Hypercompetition? Topic II - Unsustainable Advantage in Four Arenas of Competition Topic III - Creative Disruption and Shifting the Rules of the Game © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 6. The Old Rules:Win By Reducing Rivalry Build Non-Competitive Industry Structures • Barriers to Entry • Exclude Competitors • Reduce Rivalry • Avoid Price Wars • Strength Against Weakness Strong Defensive • Proprietary Technology Walls • Use the Power of Monopoly • Over Buyers • Over Suppliers © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 7. The Old Rules:Win By Reducing Rivalry Avoid Competitive Behaviors • Oligopolistic Bargains • Signaling Cooperation • Avoiding Price Wars • Avoid Frontal Attacks • Strength against Weakness • Retreat to Low Rivalry Markets • Focus on Hard-to-Replicate Niches • Service and Relationships • Proprietary Technologies • Brand Names and Premium Images © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 8. What is Hypercompetition? © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 9. A New Type of Competition Impact on Level Advantage Customers Monopoly Absolute Negative Oligopoly Sustainable Negative Hypercompetition Temporary Positive Perfect None Positive © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 10. Embracing The Hypercompetitive Shift N = 200 Industries Industry Average 1980’s - 1990’s Stock Performance 1950’s - 1970’s Industry Rivalry Drive Growth to Create Shareholder Value © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 11. Capitalizing on the Four Driving Forces of Hypercompetition Fragmenting and Escalating Customer Demands Falling Entry n Barriers itio pet com per Accelerating Hy Technological Change Rising Deep Pockets © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 12. Strategic Dominance Long-Term Advantage Advantage Time A Series of Advantages Advantage Time © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 13. Pre-Plan Your Disruption Sequence Create a Value and Competence Migration Path Property & Casualty Insurance Industry QUALITY FUTURE Financial Specialty Service/ Value Strength/ Value Brand Products Pricing Reliability Propositions KNOW- FUTURE HOW/ASSETS Economies Link Distribution, Balance of Scale in Marketing Direct Sheet Agents Operations/ with Selling, and Management Overhead Underwriting Internet © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 14. Do Not Wait Until It Is Too Late Advantage Four Virtually Time Simultaneous Doing Organizations Setting Up Set Your Time Planning Pacing Interval Envisioning © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 15. Smart Bombing The Competition ® Revolutionizing Your Mindset and Your Market © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 16. Smart Bombing ® The Disruption of the Brokerage Industry Round 1: Challenging the Downstream End of the Brokerage Value Added Chain Largest Broker Tailored Merrill’s Strengths Network Advice Product Research/ Customer Development Analysis Marketing Distribution Service Account Reports Schwab’s Lower cost and 24-hr. Disruption service via electronic/telephone service [No Commissions] © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 17. Smart Bombing ® The Disruption of the Brokerage Industry (cont.) Round 2: Challenging the Upstream End of the Brokerage Value Added Chain Invention of CMA/Mutual Securities Merrill’s Funds Analysis Strengths Customer Product Research/ Marketing Distribution Service Account Development Analysis Reports Schwab’s One Source provides many new products Disruption and access to research by many funds © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 18. Smart Bombing ® The Disruption of the Brokerage Industry (cont.) Round 3: Rechallenging the Downstream End of the Brokerage Value Added Chain Largest Merrill’s Broker Tailored Strengths Network Advice Product Research/ Customer Development Analysis Marketing Distribution Service Account Reports Schwab’s Schwab Advisor Network & Disruption Schwab OnLine © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 19. Smart Bombing ® Round 4: The Empire Strikes Back New Comp System [No commission paid on small account trading] Major Cost My Merrill Moves-- Cut Backs Retirement Financial (overseas Planning Picture Dropping & U.S.) Network Online Megatonage Product Research/ Customer Development Analysis Marketing Distribution Service Account Reports Schwab Schwab Upscale Major U.S. Trust Imitates Full Direct Detail Rebranding Employee Computerized Line Brokers (In-depth Reductions Stock Advice Mutual Fund and Portfolio Insights) Planning & Wireless Trading © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 20. Smart Bombing ® Round 5: The Guerilla Strikes Back Research CMA Funds Influenced IPOs Given Merrill Used For To IB Client by IB M&A Loans Executives Clients Product Research/ Customer Development Analysis Marketing Distribution Service Account Reports Schwab Challenges Conflicts of Interest Advertising De-Legitimizing Investment Banks— Biased Toward Investment Banking Clients Over Brokerage Clients © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 21. Use Creative Disruption Shifting the Rules of the Game Redefine Quality and the Value Proposition Redefine Critical Know How and the Value Chain Configuration Redefine the Boundaries of Your Stronghold and Circumvent Barriers to Entry Redefine the Level of Deep Pockets Used -- Brains versus Brawn or vice versa © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 22. The Goals of the Struggle • Out maneuver your opponent by serving your customer better • Compete to neutralize or obsolete the opponent’s advantage at serving the customer • Not to sustain your advantage © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 23. Chivalry is Dead The New Golden Rule • Do Unto Yourself Before Others Do Unto You The New Goals • Disrupt the Status Quo • Reshape and Reinvent the Industry © Copyright by Richard A. D’Aveni 2004. All rights reserved.
- 24. Only Two Types of Firms The The Disruptive Dead © Copyright by Richard A. D’Aveni 2004. All rights reserved.