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Sustainable Competitive Advantage in Hyper-competitive Industry & Tradeoffs between Internal and External Growth Strategies

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Added on  2020-09-27

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This article discusses the possibility of having a sustainable competitive advantage in a hyper-competitive industry and the tradeoffs between internal and external growth strategies. It also explores which approach is best as an international entry strategy. Examples are given to illustrate the points made.

Sustainable Competitive Advantage in Hyper-competitive Industry & Tradeoffs between Internal and External Growth Strategies

   Added on 2020-09-27

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Quiz 3Name: Shamir ArifReg. ID: 16E00101Q1. Is it possible for a company to have a sustainable com- petitive advantage when its industry becomes hyper- competitive? Hyper competition isa situation in which there is a lot of very strong competition between companies, markets are changing very quickly, and it is easy to enter a new market, so that it is not possible for one company to keep a competitiveadvantage for a long time. It is impossible for every company to have sustainable advantage when its industry becomes hyper competitive. But firms that have unique, valuable, inimitable resources leading to sustainable competitive advantages can retain its customers.Many companies that are in this hyper competitive industry would use the strategies that are adopted by the successful market leaders. However, the things that have worked for others may not work for one. Therefore, it becomes difficult to maintain the competitive advantage.A company can stay competitive in this hyper competitive industry by keeping itself up to date with the changing environmental trends and should be able to take risks. Companies should cannibalize their products to sustain competitive advantage.In addition to this, it is important for the companies to stay on par with the latest trends and embrace them with the ever-changing conditions.Example of this would be in the early 90's the personal computer industry was hyper competitive. Anyone could buy motherboards from dozens or suppliers and build their own brand of computers. There was one little company that stood up was PC's Limited. Their competitive strategy was to build to order, to be extremely operationally efficient, and to price computers forward, estimating the decrease in component cost between the time the ad was placed and when a customer got the magazine and placed an order. PC's Limited was successful, and later changed its name to Dell Computers.In both cases, the competitive advantage has been sustained over long periods of time. In the case of Dell, it served it well to grow to be a multi-billion dollar public company, even if today that strategy is somewhat obsolete.
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