Question

Define hypercompetition. Give two important catalysts of competition and expound on their respective roles in setting off hypercompetition in the global environment

Answer 1

Answer:

The usage of tactics by the industry leaders to disrupt the competition is called Hyper-competition.

Explanation:

It is the first word that was coined in Business strategy by Richard D'Aveni.

Hyper-competition is "the dynamically competitive business world in which an action or an advantage cannot last long".

For example If "A and B" are two shops that sell similar products If "B" sells the products for a much lower price, then "A" tries to adjust its prices to gain more customers than "B" this is called hyper-competition.

The two most important catalysts of hyper-competition are:

• Globalization - The competition is related to products, target market, the production speed of the companies etc. When many companies hold the economy of the world, that means the consumers are active. It changes the number of production and quality by dispersing the value chain by integrating activities globally. This leads to hyper-competition.      

• Technology - The companies became innovative by using the latest technologies to compete in the business environment globally. A technology-based industry where the customers are willing to spend more for the technology imbibed.  To gain profits and get hold of more customers they use high-end technology for improvising their products. This again leads to hyper-competition.    

Therefore, Globalisation and Technology both act as a catalyst of hyper-competition around the globe.