Hypercompetitive Markets

Hypercompetition represents a state of competition with

rapidly escalating levels of competition and reduced

periods of competitive advantage for firms.*

*Organization Science | March 1, 2000

Introduction

Apple How does Apple, the #1 innovative company in the world, innovate and create game-changing innovations such as the iPod, iTunes, iPhone, iPad and more? What is Apple's secret recipe for innovation success?

Facts:

Secretive companyTable Market LeaderMultiple MoatsDiversified Global Player

Amazon Amazon.com, Inc. (AMZN), is a leading global Internet company and one of the most trafficked Internet retail destinations worldwide. How can they take market share from Apple?

Facts:

Huge partner networkTable Market Late ComerMoats in Different IndustriesDiversified Global Player

Market Overview

Market Overview – Models

Market Overview – Price Wars

Apple vs AmazonApple Amazon

Generally competes by differentiation Generally competes on price/long term view

Closed ecosystem Open ecosystem

Huge Product Legacy Open Possibilities

What would you do?

Recent News 1• Amazon to Reduce Kindle Fire Manufacturing Orders by 50% for Q1 2012

• http://www.itproportal.com/2012/01/23/amazon-reduce-kindle-fire-manufacturing-orders/

• January 23

Recent News 2• Samsung Announces a 7.7 inch Tablet

• http://news.consumerreports.org/electronics/2012/01/ces-2012-amoled-comes-to-samsung-tablet.html

• January 9

Windows 8 Tables….

Apple vs Amazon vs Samsung vs…

Multi-staged Competition?• Brazil Approves Tax Incentives to Begin iPad Production as Apple Targets its Next Major Market

Hypercompetitive Environments

• Fast-paced• Everything is

temporary

PROS CONS

• Aggressive• Moats might not

last

Takeaways

Takeaways• In hypercompetitive environments

competition is fast

• Usually competitors are forced to compete by using satellite businesses/advantages

• Secrecy, moats and execution speed play a key role in the competitive dynamics

• Segmentation of competitors might help in getting a clearer view

• The first question to ask might be: who is this player competing against?