BACHELOR OF BUSINESS

ADMINISTRATION (BBA)

Subject: Strategy Management

Topic: Hypercompetition

What is Hypercompetition?
 • Term coined by Richard D’Aveni in 1994 in his book
“Hypercompetition: Managing the Dynamics of Strategic
Maneuvering”

• “An environment
characterized by intense
and rapid competitive
moves in which
•
competitors must move
quickly to build
advantage and
(simultaneously) erode
the advantage of their
rivals”.

There are quick moves by the competitors. Therefore, a market

leaders’ competitive advantage is not sustainable. Rather, it is continually created, eroded, and recreated
through strategic maneuvering.
 Driving forces of Hypercompetition
D’Aveni claimed four driving forces have conspired to “heat up” markets all around the world,
and are contributing to the new era of hypercompetition.

Customer changes,
including fragmented Rapid technological change
tastes

Decline of boundaries Financial independence

(globalisation) (use of deep pockets)

What is Hypercompetition?
 Features of Hypercompetition
• High level of rivalry among the players

• Rapid technological and structural changes

• Unsustainable / temporary competitive advantage

• Strategic maneuvers occur at a quick, intense and

unexpected pace

• Adoption of flexible strategies is common because of

the rapidly changing competitive landscape

Competitive Advantage in
the World of
Hypercompetition
• Creation of competitive advantage is still
possible with the only caveat that we should
 treat it as a short-term condition rather than something that once achieved could be left
“running” on its own.

Strategies in the Hypercompetitive Era

• D’Aveni 7S Framework: An Antidote for a Deadly Distraction
 1. Vision for Disruption
A new set of guidelines is required to provide a vision for generating the next market disruption.
It includes –
 Stakeholder Satisfaction
(Envisioning disruptions that create superior stakeholder satisfaction)
Stakeholder satisfaction is the key to winning interactions with the competitors. The most important
stakeholder for an organization is the ‘customer’. Further, ‘employees’ are equally
essential and need to be motivated and satisfied.

Strategic Soothsaying
(Using strategic soothsaying as a means of
disruption) seeing and creating opportunities for

Strategic soothsaying is the process of

seeking out new knowledge for predicting or
creating what customers will want in future.

2. Capability for Disruption

The following capabilities are needed to take advantage of opportunities, to move quickly against
competitors, or to respond to competitors’ attack (counterattack).

Speed
(Building the capability for speed)
Speed (when and in what sequence you react) is a key part of competitive advantage because it
enhance the ability to serve customers and to choose the moment in time that the organization will
enter the market.

Surprise
(Creating the capability to surprise opponents)
This element is required in business. Surprise enhances an organization’s
ability to stun a competitor, and to build up superior position before a
competitor can counterattack.

3. Tactics for
Disruption
Shifting the rules
(of competition)
By shifting the rules of the market, an organization creates new opportunities to
satisfy customers. This can create tremendous disruption. E.g.- Gillette shifted the
rules in shaving when it introduced its Sensor disposable razor. It transformed the
focus on premium quality, along with convenience and price.
 Signals
(Using signals to influence future dynamic strategic interaction)
Signals refer to the verbal announcements of strategic intent to dominate a marketplace. These can be used
to stall the actions of competitors and also to manipulate their future moves. E.g. –
product announcements force competitors to rethink their plans or redesign their
own products.

Strategic thrusts
(Executing simultaneous and sequential thrusts)
These refer to an organization using several moves or series of actions, and can
result in initiating a competitive advantage.