The concept of Hypercompetition revolves around fiercely contested business spaces and the struggle for market capture. And amid this intense battle for top stakes, it is not always enough to boast a competitive advantage.
Certain markets are so open and dynamic that the conditions experienced today can take a drastic turn tomorrow. And if you've not stamped your boots on the ground, you'll be swept aside by the raging competition.
Aveni's 7s model was built for times like this. It proffers measures you can take to become successful despite the raging competition. Read on and find out how.
What is it?
D'Aveni's 7s framework discusses the means a business can take to remain visible in a hyper-competitive business environment.
It is named after Richard D'Aveni, a business strategy professor at Dartmouth College. It ditches the idea that competitive advantage is enough to strengthen your market position in hyper-competitive markets.
Instead, it asserts that a company must always seek means of self-disruption and strategic maneuvering to thrive in such situations. It suggests four driving forces that promote competitiveness. They are as follows:
Cost and Quality: This includes offerings of value propositions that are cost-effective and reactive to customer sentiments.
Timing and Know-how: This is the strategic leveraging of expert knowledge to gain first-mover advantages in new markets. It considers innovation to be at the heart of efficiency.
Boundaries: You can weaken pressure from the competition by seeking control of your business space. Competition thrives when the entry conditions are not strict.
Deep pockets among competitors: When access to financing is easy, it becomes even easier to mount a challenge in any business space.
The Core elements of Aveni's framework: Aveni suggests that the following components will help businesses thrive in hypercompetitive environments.
1. Stakeholder satisfaction
The model asserts that the customer is the most critical business stakeholder. So it encourages businesses to make them the most important consideration in return for their loyalty.
2. Strategic soothsaying
This model advises that managers be strategic in planning for whatever outcomes they face.
3. Speed
You must take advantage of every opportunity to gain further grounds.
4. Surprise
The element of surprise is an important tool that you can use to strengthen your market position.
5. Signals
Signals are those strong moves that pass a resounding message of intent across your business space.
6. Shifting the rules of the market
To make a mark for yourself in the market, you must take bold and unconventional moves that'll cause great disruption for your rivals.
7. Simultaneous and sequential thrusts
Fire on all cylinders to stake your claims in the market. Take every opportunity to assert yourself.
When do we use it?
Managers and leaders in the business space use Aveni's 7s model for the following purposes.
To enter new markets
Aveni's model removes all entry boundaries and other limitations to pursuing new business interests. It suggests measures to help you fit into new business surroundings.
To Survive in hypercompetitive environments
The model provides guidelines to help you thrive in well-contested markets. In addition, it provides context for the competitor's and customer's perspectives while developing strategies around such markets.
To leverage strategic advantages
Instead of looking to reinforce your competitive advantage, the model encourages you to assert yourself through other means. In addition, it provides the framework for adopting more strategic approaches, so you don't lose ground.
To Monitor customer preferences
The model recognizes that customer interests can swing in any direction, so it prepares you for any such eventualities. In addition, it promotes flexibility in strategic planning so you can react well to changing market variables.
What business questions is it helping us to answer?
Below is a list of the questions you can answer using Aveni's 7s model to analyze your business prospects.
How can I remain competitive in a well-contested market?
How can I enter into new markets or cross-industry lines?
What strategies can I use to capture market space?
What value chain activities should I prioritize?
How can I satisfy the business's stakeholders?
What are my customers likely to consider In the future
How can I achieve self-disruption in my business environment
How can I leverage knowledge and technological innovation to capture newer audiences?
How do we use it?
Here's a quick guide to using Aveni's framework.
Study the competition to know their areas of strengths and competitive advantage.
Study the market to understand your customer's behavior. Then, pursue opportunities to expand your portfolio and scale up.
Continue collecting all the relevant resources—knowledge, finance, expertise, needed to remain competitive.
Pursue aggressive means to assert yourself. Explore disruptive technologies and unconventional business approaches.
Explore every opportunity to strengthen your position, then attack on all fronts.
Practical example
A cable TV station/streaming channel looks to position itself as America's leading provider of primetime entertainment value. It introduces several packages to achieve success in America's saturated TV market. Some of these packages include pay-per-views and tenure subscriptions, but that's not all.
It runs regular consumer surveys to know the most anticipated shows. It then buys exclusive rights to air these shows and assigns them choice viewing time slots. The station announces its film rosters at press briefings and selects events.
Advantages
It suggests measures to survive in competitive environments. Aveni's 7s model is best suited for hypercompetitive markets. It provides you with specific guidelines to remain relevant amid intense rivalry.
It promotes innovation and consistent reinventing. The model encourages businesses to use unconventional but strategic approaches to strengthen their market position. It maintains that self-disruption is crucial to the sustainability of any business.
It promotes strategic competitiveness. Aveni's 7s model promotes long-term sustenance by focusing on the strategic capture of market forces. This is in contrast to the emphasis on creating a competitive advantage, which is a tool for temporary capture.
It is a flexible strategic control tool. This model acknowledges that today's business landscape is increasingly dynamic in its competitive outlook. Thus, it emphasizes the need to be flexible in strategic planning as a response.
Disadvantages
It may be too demanding for smaller businesses. This model better suits big organizations with the resources needed to thrive in hypercompetitive markets.
It does not always proffer immediate solutions. While the long-term benefits of using this model are well appreciated, it'll be less suited for use in urgent situations. If you need a quick fix to pull through a rough market patch, you may be better off with a different strategy.
It idealizes a competitive environment. Aveni's model defines a hyper-competitive market with low switching costs and temporary competitive advantage. This is not always the determinant provision for such types of business environments.
It does not provide a guarantee of success. Even if you follow the guidelines specified by this model, you can not be certain to achieve success. This situation arises from the unpredictability that's often found in dynamic business settings.
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