Transcript 05 Competitive Dynamics

Competitive Dynamics
What is Competitive Dynamics?
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COMPETITIVE DYNAMICS - Total set of actions
and responses of all firms competing within a market
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COMPETITIVE RIVALRY - Ongoing set of
competitive actions and competitive responses
occurring between two competitors as they contend
with each other for an advantageous market position
Competitor Analysis
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Who are your “competitors”?
Sun Tzu
Now the general who wins a battle makes
many calculations in his headquarters
before he fights a battle. The general who
loses a battle makes but few calculations
beforehand. Thus do many calculations
lead to victory and few calculations to
defeat.
What need be said of no calculation at all?
Types of Competitive Action
Strategic
Tactical
Sun Tzu
Strategy without tactics is the
slowest route to victory.
Tactics without strategy is the noise
before defeat.
Attacks-First Mover Advantage
First Mover Advantages
First Mover Disadvantages
Sun Tzu
Those who arrive first at the battleground
will have sufficient time to rest and prepare
against the enemy.
Those who arrive late at the battleground
will have to rush into battle when they are
already exhausted.
Footholds
A small position that a firm intentionally
establishes within a market in which it does
not yet compete.
How do firms use
footholds?
Sun Tzu
Keep your friends close and your enemies
closer.
Competitive Response
Competitive Response
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Awareness
Motivation
Capability
Competitive Response
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Speed of response.
Jack Welch: “Success in competitive rivalries is less a function of grandiose
predictions than it is a result of being able to respond rapidly to real
changes as they occur.
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Multimarket Competition
Mutual Forbearance
Sun Tzu
If you know the enemy and know yourself, you
need not fear the result of a hundred battles.
If you know yourself but not the enemy, for
every victory gained you will also suffer a
defeat.
If you know neither the enemy nor yourself, you
will succumb in every battle.
Blue Ocean Strategies
Executives try to create and
exploit vast untapped markets
rather than competing
directly with rivals.
Blue Ocean Strategies
Sun Tzu
The greatest victory is that which requires no
battle.