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Dynamic Strategy (The Dynamic Capabilities Perspective (Two core…
Dynamic Strategy
The Dynamic Capabilities Perspective
First corollary to the fundamental principle
limitation is the sincerest form of flattery
Second corollary to the fundamental principle
change is the only constant
Two core perspectives on economic rents
monopoly rent
barrier to entry
Ricardian Rents
firm structure that matters most of all
Third perspective economic rents
entrepreneurial rent
evolutionary dynamics
supplant the old, competitive order
Incumbent Firms Fail or Survive
Fail
worse positioned than entrants.
Incumbent blinders to the change necessary
select not to change
no better positioned than new entrants
thousands of entrepreneur
competitive threat
Succeed
requires extensive capital and expertise
customers desire the assurance of the established market player
leveraging their existing capabilities
dynamic capability
ability to adjust to the changing business conditions
Competitive Life Cycle
Annealing
The emergence of a dominant design
shakeout
diversifying into this new technology or new segment
disruption
Market demand pull
Technology push.
Introduction to Strategy Over Time