The Competitive Landscape
The fundamental nature of competition in many of the world’s industries is changing.
The reality is that financial capital continues to be scarce and markets are increasingly
volatile.
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Because of this, the pace of change is relentless and ever-increasing. Even deter-
mining the boundaries of an industry has become challenging. Consider, for example,
how advances in interactive computer networks and telecommunications have blurred
the boundaries of the entertainment industry. Today, not only do cable companies and
satellite networks compete for entertainment revenue from television, but telecommu-
nication companies are moving into the entertainment business through significant
improvements in fiber-optic lines.
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Partnerships among firms in different segments of
the entertainment industry further blur industry boundaries. For example, MSNBC is
co-owned by NBC Universal and Microsoft. In turn, General Electric owns 49 percent of
NBC Universal while Comcast owns the remaining 51 percent.
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Other characteristics of the current competitive landscape are noteworthy.
Conventional sources of competitive advantage such as economies of scale and huge
advertising budgets are not as effective as they once were in terms of helping firms earn
above-average returns. Moreover, the traditional managerial mind-set is unlikely to lead
a firm to strategic competitiveness. Managers must adopt a new mind-set that values
flexibility, speed, innovation, integration, and the challenges that evolve from constantly
changing conditions.
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The conditions of the competitive landscape result in a perilous
business world, one in which the investments that are required to compete on a global
scale are enormous and the consequences of failure are severe.
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Effective use of the stra-tegic management process reduces the likelihood of failure for firms as they encounter
the conditions of today’s competitive landscape.
Hypercompetition
is a term often used to capture the realities of the competitive
landscape. Under conditions of hypercompetition, assumptions of market stability are
replaced by notions of inherent instability and change.
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Hypercompetition results from
the dynamics of strategic maneuvering among global and innovative combatants.
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It is
a condition of rapidly escalating competition based on price-quality positioning, com-
petition to create new know-how and establish first-mover advantage, and competition
to protect or invade established product or geographic markets.
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In a hypercompetitive
market, firms often aggressively challenge their competitors in the hopes of improving
their competitive position and ultimately their performance.
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Several factors create hypercompetitive environments and influence the nature of
the current competitive landscape. The emergence of a global economy and technology,
specifically rapid technological change, are the two primary drivers of hypercompetitive
environments and the nature of today’s competitive landscape.
2) From the PRACTICE activity, identify an organization that could benefit from the application of the I/O Model of Above-Average Returns
a. Follow the five steps to justify your answer.
1. Study the external
environment, especially
the industry environment.
2. Locate an industry with
high potential for above-
average returns.
3. Identify the strategy called
for by the attractive
industry to earn above-
average returns.
4. Develop or acquire assets
and skills needed to
implement the strategy.
5. Use the firm’s strengths (its
developed or acquired assets
and skills) to implement
the strategy.
The External Environment
• The general environment
• The industry environment
• The competitor environment
An Attractive Industry
• An industry whose structural
characteristics suggest above-
average returns
Strategy Formulation
• Selection of a strategy linked with
above-average returns in a
particular industry
Assets and Skills
• Assets and skills required to
implement a chosen strategy
Strategy Implementation
• Selection of strategic actions linked
with effective implementation of
the chosen strategy
Superior Returns
• Earning of above-average
returns
b. Do not use Apple or Walmart in this exercise, nor should the organization you select be the same as another post.
DISCUSSION 2
Projecting the World Population
No one knows what the world’s population will be in the future, but the United Nations gives three projections: high, medium, and low. Many others share differing projection's, check out these short articles and/or videos which present some others.
Next, explain how each of these projections would affect your immediate community? How would these population changes affect the way you currently live your life?
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