Manag., December-2019 – Q43
0. Which of the following is NOT the characteristic of “Hyper Competition”?
- Option : D
- Explanation : Hyper Competition: Most industries today are facing an ever-increasing level of environmental uncertainty. They become more complex and more dynamic because
multi-domestic industries are now becoming global. New, flexible, aggressive, innovative competitors are moving into established markets to rapidly erode the advantages of
large previously dominant firms. Distribution channels vary from country to country and are being altered daily through the use of sophisticated information systems. Closer
relationships, with suppliers, are being forced to reduce costs, increase quality, and gain access to new technology. Companies learn to quickly imitate the successful strategies of
market leaders and it becomes difficult to sustain competitive advantage for too long. Consequently, the level of competitive intensity is increasing in most industries. Richard D’Aveni contends that as this type of environment turbulence reaches more industries, competition becomes hypercompetitive. According to D’Aveni, in hypercompetitive
the frequency, boldness, and aggressiveness of dynamic movement by the players accelerate to create a condition of constant disequilibria and change. Market
stability is there tended by short product life cycle; short product design cycle; new technologies; frequent entry by unexpected outsiders; repositioning by incumbents, and
tactical re-definitions of market boundaries as diverse industries merge. In other words, environments escalate toward higher levels of uncertainty, dynamism, heterogeneity of
players, and hostility.
In hyper-competitive industries—such as computers—competitive advantage comes from up-to-date knowledge of environment trends and competitive activity coupled with a willingness to risk current advantages to explore the possibility of newer advantages.
Companies must be willing to ‘cannibalize’ their own products (replacing popular products before competitors do so) in order to sustain competitive advantage. As a result, industry, or competitive intelligence, has never been more important.
