Define the term hyper-competition with an example. Identify a firm that competes in a hypercompetitive industry.
It is the extreme environmental turbulence with markets and industries experiencing a constant attack on competitive advantage and with strategies to cope with such circumstances (Kessler, 2013, p. 359). For example, a fast-food restaurant could lower its prices closer or below the rival’s price to cause hypercompetition. An example of a company in hyper-competition is Netflix. It allowed people to rent DVDs through the mail that disrupted the industry resulting in online streaming.
Explain how the five partners (flagship) model developed by Rugman and D’Cruz differs from Porter’s five forces model?
The Flagship model is more relevant to today’s business environment because it highlights the significance of collaborating with numerous businesses to succeed. It emphasizes cooperative behavior in network relationships. On the other hand, Porter’s model focus on what a company does on itself; the corporate individualism and individual business transactions. It emphasizes rivalry, entry barriers and mechanisms to exercise power and achieve competitive advantage (Rugman, 2002, p. 347).
Determine how FedEx uses dynamic strategic interactions to compete in each arena listed in the model on 16-2, which are cost and quality, timing and know-how, entry barriers, and deep pockets.
FedEx uses Quality Driven Management (QDM) to generate cost savings and grow revenue by empowering team members to become creators of change at the company, which leads to the elimination of waste and cost. FedEx pays great attention to the collaboration between staff at all levels to maximize quality. It leverages the Internet of Things (IoT) to improve the quality of services and the efficiency of operations. The company has substantial experience (know-how) in the industry and has continuously created competitive strategic plans to outcompete its rivals. It eliminates entry barriers while using them against its rivals. For instance, FedEx was able to eliminate the government regulations barrier and used it to its advantage by securing a short-term hold on smaller jets and gaining exemption on payload capacity. Another competitive advantage is its deep pockets, emanating from its established global market. It delivers packages in over 200 countries worldwide. The company is most effective in expanding when it spends on infrastructure.
What is the connection if any, between a national competitive advantage and a company competitive advantage?
A nation with competitive advantage is one that has can produce specific goods and services more efficiently than other countries. Companies in such countries experience high levels of competition in innovation as they seek to capitalize on their competitive advantage. Therefore, the national environment exerts pressure on companies to innovate and gain a competitive advantage with time. It is imperative for companies to continuously innovate to improve in such environments (Boyers & Abramson, 2011).
Boyers, L., & Abramson, A. (2011). FedEx Plays Catch Up in India. Forbes. https://www.forbes.com/2011/09/09/forbes-india-fedex-winnig-back-lost-ground.html
Kessler, E. H. (2013). Encyclopedia of management theory. SAGE Publications.
Rugman, A. M. (2002). International business: Strategic management of multinationals. Taylor & Francis.