Please enable JavaScript.
Coggle requires JavaScript to display documents.
G3-[ABS1]Dynamic Strategy (Competitive reordering (((technology3),…
G3-[ABS1]Dynamic Strategy
Incumbent firms
Fail
Worse positioned than entrant
Success in the past becomes a hindrance to making the change necessary for the future
Kodak , Remingtion Typewriter
Select not to change
fundamental trade off between existing businesses & new emerging business & their unwilling to cannibalize existing products
Blockbuster video
No better positioned than new entrant (Had no incumbent advantages)
Sears, Studebaker Brothers
Succeed
Innovation needs extensive capital and expertise
Incumbent firms leverage complementary resources or capabilities to their advantage
Customers desire the assurance of established firms
Often risk averse, unlikely to try new things
Incumbent firms has a "dynamic capability " to adjust to changing business conditions
Intel
Competitive reordering
time
technology3
technology2
technology1
limitation1
limitation2
New technology may be worse at first
Because of the limitation of technology, firms have to create new one to replace it.
Some new technology may fail to improve fast enough and thus disappear
Competitive Life Cycle
Firms
Emergent Phase
#
Growth Phase
#
Mature Phase
#
Margins
Cumulative Revenues
What is CLC?
It describes dynamics that are similar across industries and markets.
Stages
Annealing
Shakeout
Disruption
Experiment new business model
Establish itself
Growth is not quite as great
Schumpeterian Rent/Entrepreneurial Rent
Earning Rents with Innovation, new business model
Market are dynamic, innovation is critical
Innovation can be imitated eventually
Innovators earn schumpeterian rent before immitation
Unlike Ricardian rent, Schumpeterian rent are temporal
Firms have to understand evolutionary dynamics
#
Technology push
demand pull
mix
Example:renewable energy
Demand
people tend to care more about environment
preference change
Technology
Technology is more viable than before
Technology has improved the efficiency
G3, so cool!