Please enable JavaScript.
Coggle requires JavaScript to display documents.
Advanced Business Strategy_ Week 1 (Competitive Life Cycle (CLC) (Three…
Advanced Business Strategy_ Week 1
Introduction of competitive dynamics
The circumstances changed (new technology, new business model, change in demand, etc.)
Studebaker Brothers, Remington, Kodak, and Sears
Timing and new industry dynamics played a role in the history of these companies.
FBS review
In a competitive market, no firms realize the economic rent
“If everyone can do it, it’s difficult to
create and capture value from it.”
First Corollary to the
Fundamental Principle
“Imitation is the sincerest form of flattery.” 模仿是最真誠的奉承
carve out a favorable competitive position that is hard for others to imitate.
If some competitive positions are more favorable than others, we would expect firms to adopt those strategy
It's something that is
defensible
and
sustainable
over time.
Second Corollary to the
Fundamental Principle
“Change is the only constant.”
Video Rental Chain
Mail order service
online streaming
“Over time, economic profits (rents) tend
to dissipate as markets evolve.”
Blockbuster V.S. Netflix
Customer preferences quickly changed
Over time profits decrease as markets continue to change and evolve.
Perspectives on Rents
review
Monopoly Rents
(Industrial Organization View)
•Barriers to entry
•Industry structure matters
Ricardian Rents
(Resource-based View)
•Barriers to imitation
•Firm structure matters
A Third Perspective on Rents
Entrepreneurial or Schumpeterian Rents
(Dynamic Capabilities View)
•Markets are dynamic
•Innovation matters
Premise that markets are dynamic
Economic rents due to temporaladvantages (i.e. Schumpeterian rents)
Timing and adaptation is critical
Competitive Life Cycle
(CLC)
Curve Represent
廠商數 Firms
毛利 Margin
累積收入 Cumulative Revenue
Across industries, the
growth phase
is characterized by
widespread adoption and growth
until there are too many competitors, and a
shakeout
occurs as firms exit the industry.
These shakeouts can very much
vary in their intensity
depending on the
individual industry segment
.
Three Phase
Growth 成長期
(二) 甩出過剩 Shakeout
Mature 成熟期
(三) 瓦解 Disruption
Emergent 浮出期
(一) 磨練 Annealing
a lot of
experimentation
, trying new things
It's not clear to the marketplace yet
what the dominant standard might be
we reach this phase, we start to then see
coalescing around an established standard
.
Competitive Life Cycle: Common Patterns
a “
dominant design
” emerges …
主流設計典範
出現
• Innovation shifts to
process, delivery, and service
• Only a few large, efficient firms remain
• Pioneering firms often whither away
a disruption occurs…
衰退瓦解期
• A new technology or business model emerges
(1) Exogenous technological change (technology push)
(2) Changes in market due to consumer shifts (demand pull)
an era of
ferment
…
發酵期
• Innovation focuses on
product features
• experimentation, trying new things (Is largely
exploratory
)
• Often led by
small entrepreneurial firms
• Profits are made through
differentiation
and
niche
placement
Tesla _ Sports car -> Sadens
dominant design emerges
Innovation shifts to
process and delivery
and only the most efficient firms remain.
Technology reaches its
physical limit
when...
The amount of effort it takes to improve the technology is not worth the cost.
(成本不符合效益)
:question:Why Incumbent Firms ...
:warning: Fail
Worse positioned than entrants
Select not to change
No better positioned than new entrants
:beer_mugs:Survive
Customers desire the assurance of established firms
Incumbent firms may leverage complementary
resources or capabilities to their advantage
Innovation often requires extensive capital and expertise
Incumbent has a “dynamic capability” to adjust to
changing business conditions
