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HYPERCOMPETITION BECAUSE

HYPERCOMPETITION BECAUSE. RELATIVELY MANY PLAYERS AND PROFITS ARE INTERMITTENT NATURE OF COMPETITION IS DISRUPTIVE & DISCONTINUOUS. MORE ON SILICON VALLEY GLOBAL BUSINESS STRATEGY COB, SJSU & FBSIB, MIIS 2001. D’AVENI’S 7Ss. VISION FOR DISRUPTION superior stakeholder satisfaction

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HYPERCOMPETITION BECAUSE

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  1. HYPERCOMPETITIONBECAUSE • RELATIVELY MANY PLAYERS AND PROFITS ARE INTERMITTENT • NATURE OF COMPETITION IS DISRUPTIVE & DISCONTINUOUS

  2. MORE ON SILICON VALLEY GLOBAL BUSINESS STRATEGY COB, SJSU & FBSIB, MIIS 2001

  3. D’AVENI’S 7Ss • VISION FOR DISRUPTION • superior stakeholder satisfaction • strategic soothsaying • CAPABILITY FOR DISRUPTION • speed • surprise • TACTICS FOR DISRUPTION • shifting the rules of the game • signaling strategic intent • simultaneous & sequential strategic thrusts

  4. FRUIN’S GOOD FENCES • TRAD THEORIES OF THE FIRM DON’T DEAL WELL WITH OPEN BORDERS & PROPERTY RIGHTS CONFUSION • AGREEMENT THAT OPEN BORDERS ARE NEEDED IN VOLATILE MARKETS AND WITH COMPLEX PRODUCTS • HOW ARE PROPERTY RIGHTS TREATED UNDER CONDITIONS OF OPEN BORDERS

  5. FRUIN’S GOOD FENCES II • JAPANESE FIRMS ARE OPEN WITHIN FORMALIZED NETWORKS (bus groups) • PROPERTY RIGHTS BELONG TO ORG MORE THAN INDIVIDUALS, BUT • higher transfer prices • supplier associations for network governance; multilateral rather than bilateral bargaining • pay for performance

  6. FRUIN’S GOOD FENCES III • OPEN BORDERS ARE FORMS OF PARTICULAR, FORMALIZED TRUST • ORGANIZATIONAL RATHER THAN INDIVUDAL PROPERTY RIGHTS • GOODWILL RATHER THAN LEGAL RIGHTS • IMPROVES ON TRADITIONAL MODEL BUT SUFFERS AGAINST S.V. MODEL

  7. SAXENIAN’S AUTARCHY • ROUTE 128 vs. SILICON VALLEY • DIGITAL COMPUTER, DATA GENERAL (‘Soul of a New Machine’) • BETWN 1975-90, 3x AS MANY NEW TECH JOBS IN S.V. • S.V. HOME OF 39 OF 100 FASTEST GROWING ELECT FIRMS (Boston=4)

  8. SAXENIAN’S AUTARCHY • FIRM-BASED SYSTEMS vs. REGIONAL NETWORK • DURING THE 1980s, MASS MIRACLE RAISED $3 BILLION IN VENTURE CAP • DURING THE 80s, S.V. RAISED $9B • 75% RAISED LOCALLY FOR Rte 128 cos AND 130% FOR S.V. FIRMS

  9. SAXENIAN’S AUTARCHY • DIGITAL’S MATRIX ORGANIZATION vs. H-P’S DECENTRALIZED DIV STR • H-P’S OPENESS TO MRKT TRENDS AND STATE-OF-THE-ART IN S.V. • JOE DeNUCCI, FORMER DEC EMPLOY IN P.A.: “DEC P.A. is a completely diff. world…adversaries are external…far more aggressive and “prove-it” mindset.” (p286)

  10. SAXENIAN’S LAST WORD • COMPARING Rte 128 and S.V. • REGIONS AS NETWORKS OF RELATIONSHIPS RATHER THAN COLLECTIONS OF ATOMISTIC FIRMS • TRANSCEND DISTINCTION BETWN WHAT’S INSIDE & WHAT’S OUTSIDE FIRMS

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