conferencia

Conferencia

DECONSTRUYENDO VALOR ROMPER LAS REGLAS

Mr. Richard A. D’Aveni Profesor de Dirección Estratégica de AmosTuck Business School, Dartmouth College

© Copyright by Richard A. D’Aveni 2005. All rights reserved.

DECONSTRUCTING DECONSTRUCTING VALUEVALUE

DECONSTRUCTING DECONSTRUCTING VALUEVALUE

Professor Richard D'Aveni

Breaking the Rules of the Competitive Game

Tuck School of Business at Dartmouth CollegeTuck School of Business at Dartmouth College

Instituto de EmpresaAnnual Alumni Conference

November 25, 2005

Instituto de EmpresaAnnual Alumni Conference

November 25, 2005


To Strategize About How to Use Rapid and Disruptive Change to Break the Old Rules of Competition

• To Change Mindsets by Embracing External Disruptions as Opportunities to Break the Rules

• To Examine How Traditional Strategic Rules Fail in Disruptive, Hypercompetitive Markets

• To Understand How to Win Using Fast Paced Disruption Strategies that Change the Rules of the Game

GoalsGoals


Disruption and Unsustainable Advantage

CompetitiveAdvantage

Short Periodof Advantage

LaunchRapid Counter

Attack or Disruption

Time

CompetitiveAdvantage

Periodof Advantage

Launch Slow CounterAttack

Time

Stability and Traditional Sustainable Advantage

We Live In a Disruptive WorldWe Live In a Disruptive World


Falling

Entry

Barriers

Hypercompetition

Capitalizing on the Four Driving Forces of Hypercompetition

Rising Deep Pockets

Accelerating

Technological

And

Business

Model Change

Fragmenting and Escalating Customer Demands


Old Rules Don’t Apply

Because Time, Speed and Maneuvering MatterBecause Time, Speed and Maneuvering Matter


IN THE STONE AGE

Perfect Competition


The Old Rules: Win By Reducing Rivalry

Build Non-Competitive Industry Structures

Strong Defensive

Walls

• Barriers to Entry – Exclude Competitors

• Reduce Rivalry• Avoid Price Wars

• Differentiate—Generic Strategies

• Segment and Divide Up Markets

• Use the Power of Monopoly• Over Buyers

• Over Suppliers


...Aggressive Disruption

• Shift in the Rules of Competition?

• Revolutionary Technology?

• New Business Model?

• Deregulation or Privatization?

What Kind of World Do You Live In?

Please Sit Down if Answer is Yes

…Falling Barriers • Unconventional Entrant?

• Foreign Entrant?

• Adjacent Industry?

• Convergence?

...Escalating Competition• Quality War?

• Price War?


What are the New Rules of Hypercompetition?


Advantage

Long-Term Advantage

Time

Strategic Dominance

Time

A Series of Advantages

Advantage


Do Not Wait Until It Is Too Late

Time

Advantage

Doing

Setting Up

Planning

Envisioning

Four Virtually Simultaneous Organizations

Set Your Time Pacing Interval


Financial Strength/ Reliability

Service/ Products

Value Pricing

Specialty Value

PropositionsBrand

QUALITY

Balance Sheet Management Agents

Economies of Scale in Operations/ Overhead

Link Marketing

with Underwriting

Distribution, Direct

Selling, and Internet

KNOW-HOW/ASSETS

FUTURE

FUTURE

Property & Casualty Insurance Industry

Pre-Plan Your Disruption SequenceCreate a Value and Competence Migration Path


The Essence of The Struggle

Nothing is Sustainable!Nothing is Sustainable!


Knocking Rivals Off Balance: The Center of Gravity

Proactive Disruption of Competitors’ Advantages


The Disruption of the Brokerage Industry

Disrupting the Center of Gravity

Round 1: Challenging the Downstream End of the Brokerage Value Added Chain

Merrill’s Strengths

Largest Broker Network

Tailored Advice

Lower cost and 24-hr. service via

electronic/telephone service

Schwab’s Disruption

DistributionMarketingResearch/ Analysis

Product Development Service

Customer Account Reports




Round 2: Challenging the Upstream End of the Brokerage Value Added Chain



Invention of CMA/Mutual

Funds

Securities Analysis

One Source provides many new products and

access to research by many funds


The Disruption of the Brokerage Industry (cont.)





Round 3: Rechallenging the Downstream End of the Brokerage Value Added Chain


Largest Broker Network

Tailored Advice

Schwab Advisor Network &

Schwab OnLine



The Disruption of the Brokerage Industry (cont.)





Round 4: The Empire Strikes Back

Merrill Drops Megatonage

Major Cost Cut Backs

(overseas & U.S.)

Major Employee

Reductions

Schwab Responds by Imitating Full Line Brokers


Schwab Direct Detail

(In-depth Mutual Fund

Insights)

Upscale Rebranding

U.S. Trust Computerized

Stock Advice and Portfolio Planning

& Wireless Trading

My Financial Picture Online

New Compensation System

[No commission paid on small account trading]

Retirement Planning Network





Round 5: The Guerilla Strikes Back

Merrill’s Investment Banking Strengths

Research Tied to

Investment Banking Deals

Schwab Challenges Conflicts of Interest


IPOs Tied to Investment

Banking Deals

&

CMA Funds Used For

M&A Loans

Advertising De-Legitimizing Investment Banks—Biased Toward IB Clients Over Brokerage Clients Advertising De-Legitimizing Investment Banks—Biased Toward IB Clients Over Brokerage Clients



In Hypercompetition

The Only Defense is a Good Offense


Industry Average Stock Performance

Industry Rivalry

1980’s - 1990’s

1950’s - 1970’s

Embracing The Hypercompetitive Shift

N = 200 Industries

Drive Growth to Create Shareholder ValueDrive Growth to Create Shareholder Value


The Goals of the Struggle

• Outmaneuver your opponent by serving your customer better

• Compete to neutralize or obsolete the opponent’s advantage at serving the customer

• Not to sustain your advantage


Chivalry is Dead

The New Golden Rule

• Do Unto Yourself Before

Others Do Unto You

The New Goals

• Disrupt the Status Quo

• Reshape and Reinvent

the Industry


Only Two Types of Firms

TheDisruptive

TheDead


Type of Disruption

High

Fluctuating Equilibrium

(Near Equilibrium)

Disequilibrium

(Chaos)

Low

Equilibrium

(Stability)

Punctuated Equilibrium

(Periodic Disequilibrium)

Competence Neutral/

Enhancing

Competence Destroying

Frequency of Disruption

The Nature of Change: Turbulence

Turbulence is Disruption of the Status QuoTurbulence is Disruption of the Status Quo

Time

Equilibrium

Turbulence

Time


Turbulence

Time


Turbulence

Time

Disequilibrium

Turbulence


Matching Your Mindset to Turbulence

The Nature of Change Changes the Nature of Competitive Advantage

Type of Disruption

High


Leverage & Layer Core Competencies

Disequilibrium

Hypercompetitive Strategies

Low

Equilibrium

Strong Barriers & Monopoly Power


Strategy as Revolution

Competence Neutral/

Enhancing


The Nature of Change and Strategy


Type of Disruption

Frequency of Disruption

Which Type of Market are You In?

Do Your People Have the Right Strategic Mindset for the Type of Turbulence You Face?

High


(Near Equilibrium)

Disequilibrium

(Chaos)

Low

Equilibrium

(Stability)


(Periodic Disequilibrium)

Competence Neutral/

Enhancing


Time

Equilibrium

Turbulence

Time


Turbulence

Time


Turbulence

Time

Disequilibrium

Turbulence

conferencia

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daveni profesor

gamegoals copyright

disruptive world copyright

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maneuvering matter copyright

time pacing interval

traditional strategic