Competitive Cycles in a Hyper-Connected World: Everything Flows

Competitive Cycles in a Hyper-Connected World: Everything Flows

Alessandro Arbore (Bocconi University, Italy)
DOI: 10.4018/978-1-7998-4552-2.ch004
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Abstract

This chapter presents a competitive framework suggesting a circular perspective in analyzing and managing competitive wars in a hyper-competitive and hyper-connected world. The author uses the expression “competitive cycles” to represent a typical journey of a competitive arena. The journey starts with the status quo, characterized by a direct confrontation on specific success factors (War of Position); eventually, this scenario is disrupted by the game-changing strategy of an insurgent (War of Movement). This leads to the next stage of the journey, the War of Imitation, ending up when the new game finally becomes the new status quo, that is, back to the War of Position. Then everything flows, until a new cycle, with its new rules, will start again. The digital tsunami is adding momentum and clock-speed to competitive cycles. In every moment of a firm's life, then, it is vitally important to be fully aware of its different wars. In fact, behind each of them lies distinctive rationales and dynamics, which call for specific strategic approaches.
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Competitive Cycles In Action: An Evergreen Perspective

From a theoretical perspective, the background of our framework emerges from three different streams of literature:

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    The proactive firm, an idea that is conceptually rooted in the chaos and complexity theory (Kauffman, 1995; Kotter, 1996; Brown & Eisenhardt, 1998; Sanders, 1999). Proactive systems adapt to change overcoming environmental turbulence and entropy.

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    The Resource Based View, holding that the value generated by a firm is contingent on its endowment of resources and capabilities (Penrose, 1959; Barney, 1991; Grant 1991; Prahalad & Hamel, 1994). The uniqueness of this endowment is at the core of the competitive advantage, whose sustainability is higher, the higher are the barriers raised to imitability. A strong link between the proactive firm and the resource based view lies in the concept of Dynamic Capabilities, which refers to the firm’s 'ability to integrate, build, and reconfigure internal and external competencies to address rapidly-changing environments' (Teece, Pisano & Shuen, 1997).

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    The innovation literature, in its broadest meaning: from the creative destruction of Schumpeter (1942) to the disruptive innovation of Christensen (1997). Many authors have highlighted how successful companies evolve by alternating phases of continuous improvement interrupted by phases of revolutionary innovation (Dosi, 1982; Foster, 1986; Tushman & O’Reilly, 1997; Iansiti, 1998; Christensen 1997, 2006). Here, the concept of ambidexterity is especially consistent with the proactive firm and the resource based view: ambidextrous organizations are not simply concerned with the exploitation of their resources and capabilities, but have a continuous commitment to regenerate them for exploring new, innovative strategies (O’Reilly & Tushman 2004).

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