Advance your strategic analysis skills in this follow-up to Foundations of Business Strategy. In this course, you'll learn the tools to analyze strategy across time (competitive dynamics), industries ( corporate strategy), geographies (international strategy), and institutions (non-market strategy). We'll introduce the tools you need to complete a comprehensive evaluation and understand the strategy dynamics of an industry: Competitive Lifecycle, Internationalization and Stakeholder Analyses, and Diversification Matrices. We'll apply these tools in case studies of industry leaders Disney, Orascom Telecom Holding, Sony, and GE Healthcare India.
Competitive Life Cycle Analysis
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來自 University of Virginia 的課程
高级企业战略
475 個評分
從本節課中
Dynamic Strategy
Studebaker, Remington, Sears, Kodak. Companies that were leaders in their time but failed to adapt to change. In this module, we'll explore the impact of disruptive innovations and how companies can navigate these changes, evolve over time, and avoid the pitfalls of the competitive life cycle. By the end of this module, you will be able to complete a competitive life cycle analysis and apply this tool in a case study of Sony. Let's get started.
與講師見面
Michael LenoxSenior Associate Dean and Chief Strategy Officer
Darden School of Business
Jared HarrisSamuel L. Slover Research Chair in Business Administration
Darden School of Business
So we've talked about the competitive life cycle.
We've talked about the effects something can have on established companies and
their success moving forward.
Now let's talk about how we might start to analyze the competitive life cycle.
What I provide here is a very simple schematic for
mapping out where you might be within your business within your organization
in the Competitive Life Cycle.
So what you see here are the three phases we discussed, the Emergent Phase,
the Growth Phase, and the Mature Phase.
But rather than in our S curve formulation, here we draw it as a circle.
And we do that to emphasize this idea that the Competitive Life Cycle repeats itself
over and over again, typically within the different industry segments.
The idea is simply to map out where you might exist on that life cycle.
But equally important is to ask yourself,
how long do these various phases likely last within the competitive life cycle?
So, in terms of disruption, ask yourself, how long is the mature phase likely to be?
There are some industries that literally had decades of stability with similar
technology that are then disrupted by some new technology that comes along.
We talked again about the automobile industry.
One that, for almost 100 years,
the internal combustion engine has been the dominant technology, and who
might just now be seeing a disruption in terms of electric vehicles and the like.
So trying to get an assessment by looking at the past about how long and
how stable is the industry moving forward?
Second thing we wanna think about is this annealing phase.
Is this an industry where a new technology emerges and
quickly diffuses through the market?
Or is it one where we might think there'd be a longer time period?
And you can imagine this might affect your strategy depending on whether you need to
quickly enter that market and quickly try to capture market share.
Or is it a market where you might be able to wait and
see, and see how the market develops there.
Similarly, when we think about growth.
How long does it take for the product to quickly, to diffuse through the market?
Some of consumer electronics, especially over more recent years,
we think about the iPhone and smartphones and the like.
Have diffused very quickly within the market,
achieving billions of sales within a very short period of time.
Other industries,
other technologies might take years before they begin to get significant penetration.
Once again, what can we learn from the past to help us understand
how the industry might evolve in the future?
Overall, we want to try to assess, is this a slowly evolving industry, or
is this a hyperdynamic industry?
Is this one where we get new entrants every three or four years,
new technology coming in and upsetting the competitive order?
We talked about the game player industry as one in which you tend to see a five to
six year cycle before new game players come out.
These are computer gaming devices for children and the like.
They have about a five or six year turnover period.
Or is it this industry, which maybe has a 50 year life cycle,
maybe something like the steel industry or the like.
So these are gonna be important to understand the overall competitive
dynamics in the industry.
The second thing we wanna think about is the severity of
each of these distributions and these phase transitions.
When we think about the disruption itself,
we can think of it on a scale from very radical.
Things that replace the existing capabilities, the existing technology,
in a way that your current capabilities are rendered useless.
Or are they more incremental?
We can think about Apple with the introduction of iPod, or excuse me,
the iPad.
A device that was a new market segment but really was an incremental innovation over
the existing iPhone that they had innovated.
Or was it a more radical departure from the existing technology?
I've mentioned as an example in the past the watch industry, and
in particular, when mechanized watches went to digital watches.
And how that was really a radical transformation in that industry
requiring a totally different set of skills than what previously was needed.
We also need to think about whether a dominant design, a single dominant design,
is likely to emerge.
Or are we going to have multiple competing designs?
The smart phone market is interesting right now because we have two
dominant platforms, the Apple iOS and the Android system from Google.
Is that going to persist?
Are we going to see a winner take all market where one dominant design exists,
or will be able to maintain multiple players within that industry?
Which then gets to really, what's the result of the shakeout?
Again, is this a winner take all market where we might see one dominant player?
Are we going to a duopoly here?
You think of a Pepsi and a Coke in the soft drink industry.
Or is this gonna be a contested market where we see numerous entrants into it,
competing for market share and competing for position within the industry.
Finally, we want to think about things like first mover advantage.
Are there opportunities here to enter in early and dominate the market?
Or is this market, once again, where we might be able to wait, enter in later, and
still have an opportunity to dominate?
And this relates back to concepts we talked earlier about having complimentary
assets and the like,
that you can leverage to enhance your competitive position within the industry.
Last but not least, we want to think ultimately about how important is
innovation/adaptation to this market.
Is this a market where having an innovation capability is going to be
critical for success?
And, if we do have to have an innovative capability,
are we gonna be able to actually appropriate value from that innovation?
And by this I mean, are you gonna be able to capture some of the value you
create through your innovation?
History is littered with examples of companies and
individuals who innovate new products and services.
But it ultimately seems to be others who actually
end up benefitting from their creation.
Maybe other competitors, maybe downstream suppliers, downstream distributors and
the like at the end of the day.
So this question about what is the timing, what is the severity, and ultimately,
how important is innovation?
And how much innovation capability do you have as an organization,
are critical questions to ask as you analyze the competitive life cycle.
Let me end with an example here.
Think about Netflix.
Netflix in many was a disruptor in the established market, as I mentioned before,
of Blockbuster where you have rental DVDs sold through retail establishments.
Netflix comes in with a a new business model, a distribution channel where you
mail the discs back to Netflix, and they will send you a new disc in the mail.
This was very lucrative for them.
They grew substantially, and
they were able to establish a dominant market position.
But only a few years after establishing that position,
evidence of new technology came in.
We had the evolution of digital online streaming that then led to a new
disruption in which Netflix was one of the leaders in making
the transition to this new types of technology.
And today, they still are one of the leaders within online streaming.
Interesting questions to ask are, once again, what about the timing of these?
How likely are we to have another disruption?
How fast will we see diffusion?
And then for Netflix, how do you time that transition?
Interestingly enough, Netflix at one point in time
made the argument that they should be all-in in online streaming and
argued to basically get rid of the mail distribution business.
But there was such a customer backlash that they ended up keeping the mail
distribution business while simultaneously investing in the future.
