Goal of The New 7-S’s

While the traditional 7-S’s are concerned with capitalizing on creating a static strategic fit among internal aspects of the organization, the New 7-S’s are concerned with four key goals that are based on understanding dynamic strategic interactions over long periods of time. These four goals are Disrupting the status quo Competitors disrupt the status

Living with Hypercompetition: The source of profits

While neoclassical microeconomic theory and industrial organization the-ory suggest that companies earn profits by gaining a unique advantage and avoiding perfect competition,15 the Austrian school of econgjoates identi-result of a dynamic proceSSWTreative destruction,” or disequilibrium.17 In other words, entrepreneurial discovery creates profits by finding new ways to better serve customers. It is in essence

Using the New 7-S’s: Two forms of disruption

As indicated, this is not a linear process that begins with vision and ends with tactics. Instead, it is a continuous process in which vision contributes to capabilities, which contribute to tactics. Tactics in turn contribute to vision and capabilities. As will be discussed below, strategy is developed by a process of triangulation that

A vision for disruption

A vision for disruption comes from being able to identify ways to satisfy customers better than competitors at a given point in time and over and over again. The battle for the market is the battle for the hearts and minds of customers. This is accomplished by satisfying current customers in exist­ing markets, finding

Capabilities for disruption

To capitalize on the advantages identified through the first two S’s, hypercompetitive firms develop capabilities for speed and surprise. Speed and surprise are capabilities that can be used in many ways. Fixed capabilities, such as investments in plants and other resources, tend to commit a company to a certain course of action. In static

Tactics for disruption

The final three S’s are concerned with tactics for delivering disruptions— shifting the rules of competition, signaling strategic intent, and simulta­neous and sequential strategic thrusts. The vision for disruption and capa­bilities for disruption help shape the tactics that will be used. And if a firm is good at specific tactics, the company may shape

How the new 7*S’s work together to create disruption

This chapter has described how each of the New 7-S’s contributes to the disruption of competitors. It has described how the strategies of sustaining advantage used in static environments have been replaced by strategies of disruption in hypercompetition. The “three circles” diagram (see Figure 8-1) suggests how the New 7-S’s work together toward the

A new 7-S analysis of intel’s secret to success: The new 7-S’s inside

The New 7-S’s can be used to assess competitors, especially to identify their strengths, weaknesses, and use of these factors in the four arenas of competition. Intel Corporation provides an illustration of how a hyper­competitive company uses the New 7-S’s to seize the initiative over and over again. It has drawn upon most, if

Dynamic 7’S analysis: analyzing how competitors seize the initiative from each other

Even if the company is good at using the New 7-S’s, competitors can still seize the initiative, as indicated by the above discussion of the four arenas. Competitors have taken advantage of vulnerabilities of Intel in each of the arenas. They have also used their own strengths in certain S’s or changed the way

New tools for dynamic strategic planning based on the new 7-S’s

As discussed in Part II, approaches to long-term strategic planning that are designed to sustain advantage actually are a poor preparation for long-term success. At best, they prepare companies to win one round of competition. Traditional five-year and ten-year planning models that emphasize sus­tained advantage and planned sequences of milestones and budgets are usually

Loss of the initiative and downward spirals of decline

1. The Downward Spiral With the new analytical tools discussed above, hypercompetitive firms can use the New 7-S’s to seize the initiative. When a company using the New 7-S’s seizes the initiative, its competitor suffers a parallel loss of the initiative. Just as repeatedly seizing the initiative leads to a cycle of mo-mentum, repeated

Sustaining the unsustainable by using the new 7-S’s

Ultimately, knowledge of how to use the New 7-S’s to disrupt the status quo and seize the initiative with a series of unsustainable advantages may be the only source of advantage that is sustained over time. Through using the New 7-S’s to establish a series of temporary advantages, companies build a sustained advantage. This

Two competing American approaches to strategy

There are two competing American approaches to competitive strategy. On the one hand is the collusion-based approach. According to this view, companies sustain advantages by using entry barriers and building explicit or implicit agreements with competitors. On the other hand is all-out war. Under this view, companies sustain their leadership through a dynamic movement

An old tradition returns-with a twist

The current drive to return to cooperation may be the last gasp of diehard adherents of sustainable advantage and traditional collusion-based strat­egy. If they cannot cooperate tacitly, they attempt to cooperate openly. If they cannot sustain their advantages by ordinary means, they try to do so by the extraordinary means of neutralizing the competition

Hypercompetition: A new ideology of competition

Markets were never really static; they just moved to higher levels of com­petition so slowly that they appeared to be static. But today markets are driven by the forces of global information processing and technological competitions that have transformed relatively low-intensity static envi­ronments to high-intensity dynamic hypercompetition overnight. These forces create opportunities to unseat

Hypercompetitive nations

In hypercompetition the advantages of nations are just as unsustainable as the advantages of companies. The past success of U.S. companies in world markets is no guarantee of their future success, as the rise of strong com­petitors from Europe and Asia has demonstrated. Nor is Japan’s success any indication of its future prospects; it

Antitrust policy and the need for a fundamental shift in American ideology

Traditional antitrust laws were created to respond to the needs of the old realities of competition. They are based on the assumption that mar­kets are static and companies can build sustainable advantages that result in monopolies or quasi monopolies. Antitrust laws were also designed to counter the power of large corporations that sought to

The obsolescence of antitrust

Antitrust laws were originally designed as a counterweight to the power of large corporations. These laws leveled the playing field for the “little guy”: customers and small competitors. They were supposed to prevent monop­olies, collusion and price fixing, predation, and exclusionary practices. These laws were created in a time of robber barons. But now,

The dynamic efficiency and fairness of hypercompetition

A group of economists who testified for IBM commented that a key weak­ness of the government’s economic analysis in the case was that it was based on a static view of the world. [One] underlying error that the government’s economic analysis committed was to suppose that a dynamically changing competitive market whose basic feature

Antitrust laws have a negative effect on hypercompetition

Traditional antitrust laws chill and dampen the aggressive competition necessary to achieve the four types of dynamic efficiency in hypercompeti­tion. When firms are very successful at racing up the escalation ladders, they are, ironically, vulnerable to allegations of being anticompetitive. In hypercompetition companies often do things that might be interpre­ted as anticompetitive under antitrust