Chapter 6: Supporting -Level Strategies
Understand the various forms of competitive and cooperative moves
Explain the importance of competitive intelligence
Utilize concepts from chapter to offer recommendations for companies
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Making Competitive Moves
A first-mover advantage exists when making the initial move into a market allows a firm to establish a dominant position that other firms struggle to overcome.
A first-mover cannot be sure that customers will embrace its offering, making a first move inherently risky.
A disruptive innovation is one that conflicts with, and threatens to replace, traditional approaches to competing within an industry.
A foothold is a small position that a firm intentionally establishes within a market in which it does not yet compete.
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Making Competitive moves
A blue ocean strategy involves creating a new, untapped market rather than competing with rivals in an existing market.
Bricolage creates new markets by using whatever materials and resources happen to be available as the inputs into a creative process.
Hypercompetition refers to a situation that involves very rapid and unpredictable moves and countermoves that can undermine competitive advantages.
Under such conditions, it is often better to make a reasonable move quickly rather than hoping to uncover the perfect move through extensive and time-consuming analysis.
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Responding to Competitors’ Moves
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Fighting brand: A lower-end brand that a firm introduces to try protect the firm’s market share without damaging the firm’s existing brands.
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Responding To Competitors’ Moves
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Competitive Intelligence
A systematic and ethical program for gathering
information about competitors and general business
trends to further your own company’s goals
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Why CI?
Play the Game Differently
New market opportunity
New customers
Develop/leverage new value chain strengths
New strategies/tactics
New “flow” of the game
Figuring out what drives behavior
Environment/industry drivers
Organizational drivers
Managerial drivers
Playing the Game Better
Focus on existing competitors/strategic position
Leverage value chain strengths
Incrementally improve existing strategies/tactics
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Competitor Intelligence Pyramid
Industry experts/analysts
Industry publications
Trade shows/conferences
Advertisements/PR
University research centers
Financial
Court documents/patents
Suppliers/customers
Newspapers
Help wanted ads
Reverse engineering labs
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Chapter Summary
Executives may choose to act swiftly by being a first mover in their market, and their firms may benefit if they are offering disruptive innovations to an industry.
Executives may also choose a more conservative route by establishing a foothold within an area that can serve as a launching point or by avoiding existing competitors overall by using a blue ocean strategy.
When firms are on the receiving end of a competitive attack, they are likely to retaliate to the extent that they possess awareness, motivation, and capability.
When firms encounter a potentially disruptive innovation, they might ignore the threat, confront it head on, or attack along a different dimension.
Rather than engaging in a head-to-head battle with competitors, executives may also choose to engage in a cooperative strategy such as a joint venture, strategic alliance, colocation, or co-opetition.
Regardless of the decision executives make, in many cases any attempt to act on a viable road map will result in progress that will get the firm moving in the right direction.
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