Hypercompetition in Business Strategy

This assignment delves into the concept of hypercompetition, where companies constantly strive to maintain a competitive edge through innovation and disruption. It examines how companies like PepsiCo leverage short-term innovations and strategic alliances to navigate this volatile environment. The analysis highlights the importance of diversification, adaptability, and partnerships in achieving sustainable success amidst intense competition.

Running head: COMPETING INTERNATIONALLY
Competing Internationally
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1COMPETING INTERNATIONALLY
Since most of the companies compete in a highly competitive market, the strategies
undertaken by these organizations to maintain competitive edge also needs to be improvised.
With the intensification of competition, the new era of competition has ushered in, known by the
name of hyper- competition.
First of all, as companies operate amidst cut-throat competition, they need to envision
disruptions that can result in superior stakeholder satisfaction. In order to avoid the risk of losing
a major market share to the strong substitutes such as Monster, Rockstar and Red Bull energy
drink products, PepsiCo diversified it product range, and introduced the Sting Energy Drink,
available in three distinct flavours. The advertisement campaigns reinforced the message that
Sting was a far superior energy drink, to the rival brands, simply because it was carrying the
globally recognized brand name “PepsiCo”. By creating its new market of energy drink, the
company managed to disrupt the monopolistic dominion of Monster and Red Bull (Stambaugh et
al., 2013). The market leaders can get easily disrupted, and can create upheaval in
hypercompetitive markets. Although innovation does help a company survive in a
hypercompetitive market, it needs to ensure that it embraces short-term innovation, rather than
the long-term ones. Setting short-term innovation is important, as it encourages the company
leaders to keep on inventing new innovative strategies, prevent a sense of complacency settling
in, and develop better processes that can help in making innovation more efficient in the long
run. Besides, short-term innovation is the best strategy, simply because it helps a company
understand consumer choice as it changes over a period of time (Bonnici, 2014). The consumers
can keep on changing their preferences, and given the volatility of their choice, one innovation
may soon become obsolete in the very next year. The vulnerability to changing trends is almost
obvious to happen, as too many substitutes are there in the market, threatening the stability of the

2COMPETING INTERNATIONALLY
rival organizations. This is the reason why companies should keep on looking out for short-term
innovation for disrupting the existent market, instead of long-term ones. While earlier, most of
the companies intended to reduce competition, by monopolizing business, and putting all
resources and efforts in developing business of a specific segment, in a hypercompetitive market,
things are different. The organizations need to diversify the market share, by entering new
markets, and introducing new product line, that can help it sustain itself in a competitive market.
In case, the other product lines stop working, the company can still maintain competitive edge
through the alternative product business. At the same time, it should be remembered that
partnership and alliance have also become highly important to sustain in a hypercompetitive
market. In case, an emerging company tries to survive amidst competition, and develop its brand
image, it should enter into brand partnership agreement with larger and recognized companies,
whereby resources used jointly can benefit both (Vasiltsova et al., 2015). For example, Spotify
and Uber have entered into alliance in order to provide stereo control to Uber customers. Since
every Spotify consumer does not use Uber, nor does every Uber rider use a Spotify account, this
alliance will allow each company to pursue prospects from the other’s existing customer base, all
while continuing to promote both products (Tsai et al., 2016).
Thus, it is evident that in a hyper-competitive market, companies no longer compete with
each other to protect their market-share, but rather maintain sustainable advantage by disrupting
the strategies of the competitors.

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Reference List:
Sammut-Bonnici, T. (2014). Hypercompetition.
Stambaugh, J. E., Zhang, Y., & DeGroot, T. (2013). Labor Mobility And Hypercompetition:
Another Challenge To Sustained Competitive Advantages?. Strategic Management
Review, 7(1), 64.
Tsai, Y. H., Joe, S. W., Chen, M. L., Lin, C. P., Ma, H. C., & Du, J. W. (2016). Assessing team
performance: Moderating roles of transactive memory, hypercompetition, and emotional
regulation. Human Performance, 29(2), 89-105.
Vasiltsova, V. M., Dyatlov, S. A., Vasiltsov, V. S., Bezrukova, T. L., & Bezrukov, B. A. (2015).
Methodology of management innovation hypercompetition. Asian Social Science, 11(20),
165.