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General Motors and IBM have been battered
to their cores. Jack Welch, the chairman of General Electric,
called the frenzied competition of the 1980s "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 re-created 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'Aveni 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 creation,
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.
Rich D'Aveni (Ph.D., Columbia University)
teaches business strategy at the Amos Tuck School at Dartmouth
College and consults for several Fortune 500 corporations.
He received the A. T. Kearney Award for his research on
why big companies fail, and has been profiled as one of
the next generation's promising new management thinkers
by WirtschaftsWoche, Germany's equivalent to Business
Week.
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