Chapter 6 Notes

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Management (MGS)
Professor Constantinou

Chapter 6 Crafting Business Strategy for Dynamic Contexts NotesStrategy and Dynamic Contexts The Challenges to Sustainable Competitive Advantage y three dimensions of dynamic change are competitive interactions industry evolution and technological disruptions y these categories are interrelated and relative speed of changes in these categories further complicates strategy in dynamic contexts y competitive interactions are composed of two related factors the interactions between incumbents and the interactions of new entrants and incumbents y the interactions caused by new entrants are a particularly severe source of dynamism when the entrants introduce a new business modelthat is a strategy that varies significantly from those used by incumbents y research on competitive interaction has identified 4 underlying phases1 discovery and competitive new action 2 customer reaction 3 competitor reaction and 4 evaluation of action and reaction effectiveness y competitive interaction theory suggests that because competitive actions will generate reactions a firms managers should predict reactions to its actions and use that info to determine what would be the best course of action given competitors likely reactions Revolutionary Strategies That Lead Industry Change y there are 5 revolutionary strategies that can introduce dynamic change into an industry y successfully implemented such strategies can overturn an established industrial structure and rewrite the rules of competition y these 5 revolutionary strategies tend to fall into 1 of 3 categories highend disruptions lowend disruptions or hybrid y highend disruptionstrategy that may result in huge new markets in which new players redefine industry rules to unseat the largest incumbents incumbents can also use newmarket disruption strategies y lowend disruptionstrategy that appears at low end of industry offerings t
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