Advantages Of Arenas

Decent Essays
In the 90s, competition has become too turbulent to analyse or manage. While many called for a more dynamic approach, arguing that managers have been using archaic models of strategy in the face of changing trends. Revolutionary technology, advances in communication, globalization, and connectivity were just some of the new global trends organizations needed to keep up with. This became an era of “hypercompetition”, and D’Aveni’s focus of research. In this environment, very flexible, aggressive competitors eroded the advantages of long-standing major organizations. The school of thought before D’aveni was that organizations needed to sustain their competitive advantage. However, the truth in this era was, no advantage can be sustained. In…show more content…
Arenas represent groups of market players which use similar tactics to achieve a common competitive advantage. These arenas are the timing and know-how arena, the strongholds arena, and the deep pockets arena. The timing and know-how arena represents true innovation and imitation that underlies product evolution and the successful adaptations firms undertake to stay in the game (Wilkinson and Kannan, 2017). In this method, the bulk of responsibility rests on managers to observe the business environment and make decisions which will influence the direction of the organization. It relies on sensing and shaping new opportunities, and is a common arena in organizations which foster a culture of knowledge management. The strongholds arena relies on strong barriers of entry. However, in a hypercompetitive environment, no barrier is impenetrable. This is not to say that a “well-secured” organization does not have a competitive advantage – it only means that the advantage is transitory. Strongholds thrive in mutually forbearing behaviour with other organizations, i.e. if organizations are not actively and aggressively competing against each other. However, they are susceptible to disruption, especially if they are an established organization with a low-performing rival. The strongholds arena is often present in anticompetitive environments, making it ineffective in hypercompetition, whose theory plays a central role in trying to dismantle
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