[ASM] G2 - Dynamic Strategy (ABS) (Why Do Incumbent Firms Fail or Survive,…
[ASM] G2 - Dynamic Strategy (ABS)
Strategy Over Time
How Incumbent frim face hardship and when thay face new technology that disrupt their market
Four Iconic frims
Horse drawn carriages
60% market share
Automobile(new electric vehicle)
80% market share within New York
Maker of flim
Flim based cameras
Lead over hundred years
still working digital imaging technology
Digital point and shoot cameras
As catology business
Move suburban malls
Dynamic Capabilities Perspective
Economic rent core perspective
markets work is to understand the evolutionary dynamics
innovation, timing and adaptation is critical
markets are dynamic
Firm structure matters
Barriers to imitation
Industry structure matters
Barries to entry
Fundamental idea of business strategy
Economic rents dissipate as markets evolve
No firm realizes economic rents
Competitive Life Cycle
Understand both timing and when phase transition occur
Lots of experiments and trying
Grow slowly or even no
Some firms exit the market
Mature products and technologies
By draw a Circle (CLC Repeat Itself)
to map out where you might exist on that life cycle.
How Long is the Mature Phase?
Radical or Incremental?
How Long is The Emergent Phase?
Dominant Design or Multiple Design?
How Long is The Growth Phase?
Winner-take-all, duopoly, contested?
Slowly evolving or hyper-dynamic?
FIrst Mover Advantage?
How Do We Use it?
Characterizing The CLCs For Your Business
Assesing Your Competitor Position
Charting Your Position
The Assessment of Competition within Dynamic Market Environment
it's often the older firms that are having difficulty to adapt and are often driven from the market
competitive ordering coalesces
pioneering firms wither away
consumers shift their preferences
new technology / business model emerge
exogenous technological change
lead by small entrepreneurial firms
focused on new product features
Differentiation & Niche placement
Imitation & Competitors
weren't necessarily the pioneer innovators within their industry, but were the ones who were eventually able to take those products to scale
EPI (the original entrant into CAT scanners)
General Electric (the one to scale and success)
Why Do Incumbent Firms Fail or Survive
No better positioned than new entrants
EX: Swiss Watch
Worse positioned than entrants
Select not to change
EX: Blockbuster Video
having planned obsolescence
making a change and try to survive
When Do Incumbent Firms Succeed?
Innovation often requires extensive capital and expertise
Not easily available to small or newly-founded firms
Customers desire the assurance of established firms
Often risk averse, unlikely to try new things
Incumbent firms may leverage complementary resources or capabilities to their advantage
Incumbent has a "dynamic capability" to adjust to changing business conditions