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Where We’ve Been

Where We’ve Been. Strategic Gestalts Business-level Strategies Internal (Firm) Analysis Environmental Analysis Corporate-level Strategies International Strategies NOW: Competitive Dynamics, Cooperative Strategies. Competitive Dynamics.

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Where We’ve Been

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  1. Where We’ve Been • Strategic Gestalts • Business-level Strategies • Internal (Firm) Analysis • Environmental Analysis • Corporate-level Strategies • International Strategies • NOW: Competitive Dynamics, Cooperative Strategies Kernochan, 2005

  2. Competitive Dynamics • So far: strategy & strategic gestalt have been treated as static elements • Competitive dynamics treats strategy as competitive rivalry that unfolds over time • Game theory: focuses on tit-for-tat aspects of competitive rivalry • Competitive dynamics = means of creating more or less sustainable advantages for the firm • Part of the environmental context of the strategic gestalt • Only one part of picture: need for quality, vision Kernochan, 2005

  3. Competitive Dynamics: Action & Response • Strategic Seeing: • actions of firms in the industry • Effects on industry • Need (or not) of response • Strategic thinking: response • What reaction creates the largest and most desirable effects at the least cost and correct timing • Responses can be staged over time and escalate or diminish Kernochan, 2005

  4. Competitive Dynamics • Two levels: Corporate- & Business-level • Corporate-Level = diversification = action • Across businesses • Multipoint competition: core business(es) • Across borders: international strategies • Multipoint competition: home/domestic markets • Business-level • Actions in product-markets to create advantage, defense Kernochan, 2005

  5. The Result of Competitive Dynamics:Industry/Market Outcomes • Rivalry characterizes markets, industries, hence firm’s environment (5 Forces) • Note: firm’s actions help to define arena • Market Types: slow, standard, fast cycle • Types of competitive outcomes • Sustained vs. temporary advantages • Market stages (Life cycle) • introduction, growth, maturity, decline Kernochan, 2005

  6. Competitive Dynamics • The sequence of competitive actions over time • Two principal concerns • When (Timing Strategies) • Type: Offensive or Defensive Kernochan, 2005

  7. Timing Strategies • First Mover • Second Mover or Follower • Late Mover or Laggard Kernochan, 2005

  8. Type of Competitive Action: Offensive • Frontal Assault • Flanking Maneuver • Bypass Attack • Encirclement • Guerilla Warfare Kernochan, 2005

  9. Type of Competitive Action: Defensive • May be reactive or anticipatory • Raise Structural Barriers to entry/attack • Increase Expectation of Retaliation • Lower the Inducement for Attack • Keep industry unattractive Kernochan, 2005

  10. Cooperative Strategies • Network or Environmental level strategy • Various forms of alliances • Joint-venture, etc. • Varying degrees of formality • Tacit collusion  merger • Cooperative or complementary alliances • Cooperative: common interest(s) • Complementary: different strengths Kernochan, 2005

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