Please enable JavaScript.
Coggle requires JavaScript to display documents.
[ABS] (week 1) Dynamic Strategy (Team menbers (Miki, Joanna, Cindy, Jamie,…
[ABS] (week 1) Dynamic Strategy
Introduction to Strategy Over Time
Example of companies that fails to adapt to new circumstances
Remington
Typewritter :arrow_right: PC
Kodak
Film-based camera :arrow_right: Digital camera
Studebaker Brothers
Horse drawn carriage :arrow_right: Automobile
Sears
New business model
Introduction to the Competitive Life Cycle
Annealing
Shakeout
Disruption
Cumulative revenue
Take time to attract customers
Own customers,growth
get saturated,growth rate decline
e.g.Digital music player , Automobile , smart phone
https://screenshot.net/tw/0lre6u6
Firms
Many firms
Decline(exit: bankrupt ,merged or acquired by another entity.
e.g.Automobile ,Beer industry
(
https://screenshot.net/tw/0wxrwb9
)
Growth
Differentiation
e.g.Microprocessor industry
https://screenshot.net/tw/0yg1yum
Margins
Low profit
success , profit growth
competitive effect , going back
https://screenshot.net/tw/0gyegi1
Competitive Life Cycle Analysis
Competitive Life Cycle Analysis
Three Phases
Emergent Phase
Growth Phase
Mature Phase
Timing
Annealing
How long is the emergent phase?
Shakeout
How long is the growth phase?
Disruption
How long is the mature phase?
Overall
Slowly evolving or hyper-dynamic?
Severity
Annealing
Dominant design or multiple designs?
Shakeout
Winner-take-all duopoly, contested?
Disruption
Radical or incremental?
Overall
First mover advantage?
How important is innovation/adaptation?
Do we have an innovation capability?
Can we appropriate value from innovation (ours to others)?
Competitive Life Cycle: Common Patterns
Beginning
Largely exploratory
Led by small firms
Profit are made through differentiation and niche placement
Innovation focus on product features
Over time
Only efficient firms frmain
Pioneeing firms often whither away
Innovation shifts to process, delivery and service
Eventually
New technology or business model emerges
Technology push
Demand pull
Competitive reordering occurs
Emergence of new dominant design
The Dynamic Capabilities Perspective
Fundamental principle of business strategy
First corollary
Adopt better strategy to gain more favorable position
Second corollary
Over time, economic profits tend to dissipate
Concept
Perfectly competitive market = no economic profits(rents)
Perspective on Rents
Ricardian Rents (Resources based-view)
Barrier to imitation
Firm structure
Schumpeterian Rents(Dynamic capabilities view)
Markets are dynamic
Innovation
Monopoly Rents
Barrier to entry
Industry structure
Why Incumbent Firms Fail or Survive
Worse positioned than entrants
Example: Kodak
Select not to change
Example: Blockbuster
No better positioned than new entrants
Example: the Studebaker brothers and carriage making
There's lots of examples of incumbent firms who succeed
Reasons
Customers desire the assurance of the established market player
Ex: online education
Incumbent firms may leverage their existing capabilities and complementary resources to their advantage
Innovation often requires extensive capital and expertise
Ex: nuclear technology
Incumbent has a dynamic capability
An ability to adjust to the changing business conditions
Team menbers
Miki
Joanna
Cindy
Jamie
May
Andri
