Hypercompetition

by Richard A. D'Aveni

General Motors and IBM have been battered to their cores. Jack Welch, the chairman of General Electric, called the frenzied competition of the 1980's "a white knuckle decade" and said the 1990s would be worse. In this pathbreaking book that will define this new age of "hypercompetition," Richard D'Aveni reveals how competitive moves and countermoves escalate with such ferocity today that the traditional sources of competitive advantage can no longer be sustained. To compete in this dynamic environment, D'Aveni argues that a company must fundamentally shift its strategic focus. He constructs a brilliant operational model that shows how firms move up "escalation ladders" as advantage is continually created, eroded, destroyed, and recreated through strategic maneuvering in four arenas of competition. Using this "Four Arena" analysis, D'Aveni explains how competitors engage in a struggle for control by seeking leadership in the arenas of "price and quality," "timing and know-how," "stronghold creation/invasion," and "deep pockets." Winners set the pace in each of these four competitive battlegrounds.
Using hundreds of detailed examples from hypercompetitive industries such as computers, software, automobiles, airlines, pharmaceuticals, toys and soft drinks, D'Avenie demonstrates how hypercompetitive firms succeed in dynamic markets by disrupting the status quo and creating a continuous series of temporary advantages. They seize the initiative, D'Aveni explains, by employing a set of strategies he calls the "New 7-S's" Superior Stakeholder Satisfaction, Strategic Soothsaying, Speed, Surprise, Shifting the Rules of Competition, Signaling Strategic Intent, and Simultaneous and Sequential Thrusts. Paradoxically, firms must destroy their competitive advantages to gain advantage, D'Aveni shows. Long-term success depends not on sustaining an advantage through a static, long-term strategy, but instead on formulating a dynamic strategy for the creating, destruction, and recreation of short-term advantages.
America must embrace the new reality of hypercompetition, D'Aveni concludes in a compelling analysis of the potential chilling effect of American antitrust laws on competitiveness. This masterful book, essentially an operating manual of strategy and tactics for a new era, will be required reading for managers, planners, consultants, academics, and students of hypercompetitive industries.

Genres: Business

444 pages, Paperback

First published March 28, 1994

Reviews

[Paul Whitla · Rating 4 out of 5]

After searching high and low for recent competitive strategy books and being disappointed with most of what has been published in the last decade (with the exception of strategy books focused on internet based companies), I returned to some of the classics including this first book from D’aveni. Picking up where Porter left off this book discusses the concept of hyper competitive industries and the conditions that led to them, conditions which indicated that traditional thought on strategic fit and developing a sustainable advantage are obsolete. It is the discussion of the limitations of Porter’s static model of competition and the concept of strategic maneuvering and the need for dynamic competencies (though that term isn’t used) that is the strength of this book.

How to compete in such industries makes up the second half of the book and in this D’aveni introduces several models and frameworks including the four arenas of competition, the four lens approach and the new 7S model. These terms never really caught on in the strategy field and some. The Economist for example, claim that today’s world filled with oligopolies is less competitive than many would have us assume. However, this was and is an important book in the field of strategy that is more useful than most of what is being published today.