Ipr curve excel

Hypercompetition describes markets with continuous disequilibrium and change, e.g. popular music or consumer electronics
Successful competitive interaction in hypercompetition demands speed and initiative rather than defensiveness.
Cooperation strategy: Cooperating with rivals

Figure 5.8 Cooperating with rivals

Source : Adapted from Competitive Strategy: Techniques for Analyzing Industries and Competitors, The Free Press (Michael E. Porter 1998) with the permission of The Free Press,
a Division of Simon & Schuster, Inc. Copyright © 1980, 1998 by The Free Press. All rights reserved

Game theory

Game theory encourages an organisation to consider competitors’ likely moves and the implications of these moves for its own strategy.
Game theory is particularly applicable in an interdependent market situation.
One company’s strategic decision will be made on the base of anticipating competitor counter-moves.
Summary (1)

Business strategy is concerned with seeking competitive advantage in markets at the business rather than corporate level.
Business strategy needs to be considered and defined in terms of strategic business units (SBUs).
Different generic strategies can be defined in terms of cost-leadership, differentiation and focus.
Summary (2)

In hypercompetitive conditions sustainable competitive advantage is difficult to achieve.
Competitors need to be able to cannibalise, make small moves, be unpredictable and mislead their rivals.
Cooperative strategies may offer alternatives to competitive strategies or may run in parallel.
FURTHER READING

CHAPTER 6 OF CORE TEXT
Seminar case study: IKEA

Identify where (in its value network) and how IKEA has achieved cost leadership.
Identify how IKEA has achieved differentiation from its competitors.
Explain how IKEA tries to ensure that its ‘Hybrid’ strategy remains sustainable and does not become ‘stuck-in-the-middle’.
What are the lessons from China about IKEA’s approach?
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Update

The historic William Morris building, dates from 1916. Car entrepreneur William Morris bought it in 1923 to produce car engines. It was acquired by the university in 1992.

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Apart from economies of scale and experience, what else could influence cost? E.g. product/process design?

What about quality when taking cost as a priority?

Can charge extra with the same cost but providing product or services valued by customers?

Can charge lower than competitor for a product with similar cost? By doing so, the company can sell more and achieve larger market share?

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Nokia is interested in the high-end Smartphone market, but they are also selling to the price-sensitive demographic and have an even bigger target in their sight. They want to become the biggest entertainment media network in the world[2]. They are going to accomplish this through R&D with 10 labs throughout the world and by pursuing a comprehensive differentiation strategy with phone prices ranging from $10 to $700 (see Figure 2). Nokia offers devices to satisfy every budget and they are trying to make their products and services indispensable.

Google’s generic strategy, based on Porter’s model, is differentiation. This generic strategy involves a broad market scope. Google offers is products to practically everyone around the world. However, the generic strategy of differentiation also involves developing certain unique capabilities that make the business competitive. Google sets itself apart from competitors through the uniqueness of its products. This uniqueness is achieved because Google is a highly innovative company. The increasing variety of its products, inclusive of Google Search, Google Fiber and Google Glass, is a manifestation of this innovation under the differentiation generic strategy.

Toyota differentiation: design and quality, hybrid car, dominant market share in north America.

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