Competition: Forms, Facts and Fiction

322 Pages·1993·42.199 MB·English

by  Emilio Cvitkovic (auth.)

COMPETITION
Forms, Facts and Fiction
COMPETITION
Forms, Facts and Fiction
Emilio Cvitkovic
M
© Emilio Cvitkovic 1993
Softcover reprint of the hardcover 1st edition 1993
All rights reserved. No reproduction, copy or transmission of
this publication may be made without written permission.
No paragraph of this publication may be reproduced, copied or
transmitted save with written permission or in accordance with
the provisions of the Copyright, Designs and Patents Act 1988,
or under the terms of any licence permitting limited copying
issued by the Copyright Licensing Agency, 90 Tottenham Court
Road, London W 1P 9HE.
Any person who does any unauthorised act in relation to this
publication may be liable to criminal prosecution and civil
claims for damages.
First published 1993 by
THE MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 2XS
and London
Companies and representatives
throughout the world
ISBN 978-1-349-12859-4 ISBN 978-1-349-12857-0 (eBook)
DOI 10.1007/978-1-349-12857-0
A catalogue record for this book is available
from the British Library.
Copy-edited and typeset by Povey-Edmondson
Okehampton and Rochdale, England
To my father
Contents
Acknowledgements xi
Introduction 1
What this book is about I
Why this book is needed I
How this book is different 3
Who needs this book 7
Scope of this book 7
1 A Model of Competition 10
What is a model? 10
Why do we need a model of competition? 10
State of the competition analysis art 11
Competitive analysis is going nowhere 12
What foundations can we use to build a model of
competition? 21
My model of competition 24
2 Competitive Positioning 37
The importance of positioning 37
Assessing the importance of positioning: a case study 38
A methodology for positioning analyses 47
Types of competitors 53
3 Competitive Strengths 69
Barriers to entry 70
Factors undermining barriers to entry 71
Success in the attack and the defense of markets is based
on skills 79
A methodology to analyze competitors' skills:
performance profiles 83
4 Decisions, Decisions 91
'Rational' decision-making 93
Decision trees 93
vu
viii Contents
Perspectives on the use of rational analyses 96
Corporate irrationality 102
Organizational irrationality 105
Political irrationality model 112
5 Competitive Conflict 118
Nature of contlict 119
Playing games to articulate 'true' contlicts 120
What is a game? 121
How do you design a game? 125
How to play the game 130
Games in theory and practice 138
Negotiating manageable contlicts 140
6 Uncertainty 151
Coping with uncertainty 151
Forecasting 151
Forecasting models 153
Statistical models 154
PhenomenologicaI models 161
Mechanistic models 178
Forecasts as tools for consensus 185
Alternatives to forecasting 187
7 Complexity 193
'Internal' complexity 193
Organizational design 194
Operations research and 'systems' 205
Motivation and organizational first aid remedies 209
'External' complexity 212
An approach to representing external complexity 220
8 Implementation 226
'Scientific-rational' management 227
'Entrepreneurial' management 235
Why is entrepreneurial management needed? 236
How to get things done 246
9 Results 255
Which yardstick to use? 255
'Unconventional' yardsticks 269
Contents ix
Alternative yardsticks of performance 273
What matters about a company is not its past, but its
potential future performance 277
Lack of candour in the reporting of performance of
results 281
Conclusion: Interesting Times 289
The future competitive battlefield 289
Notes and References 299
~~ ~
Acknowledgements
I am grateful for the encouragement I received from friends and family
to write this book. Julie Wei, a former colleague, provided the initial
support and enthusiasm. Along the way I benefitted from the support
and ideas from my friend John Gage and my brother Steve. The final
versions were reviewed by Ted Welton and Michael Chu and my uncle
professor George Sutija.
I owe this book to the staunch support and the help of my wife
Suzy. She both edited several draft versions and also helped me by
taking a disproportionate load of our mutual child-rearing, house
keeping and other social and sanity-maintaining responsibilities.
I must also thank all companies cited in this book, which provided
the examples needed to make it understandable and relevant. Most
examples have been obtained from the public record. For obvious
professional reasons, direct sources or personal examples have been
kept confidential. However, appreciation to all is in order, particularly
to those which provided less than flattering examples. The intention
here was not to demonstrate the proper handling or mishandling of
competitive situations, but to provide a concrete, understandable
basis for discussion and commentary. Criticism in this book is not
gratuitous. It is necessary as one needs the dark components of the
chiaroscuro to draw the most vivid forms. We all benefit from
criticism since, according to Nietzsche, 'That which does not destroy
us, makes us stronger'.
Finally, I can trace some of the commitment to writing this book to
the words of Hippocrates quoted in the introduction and which are
often used to highlight the seemingly insurmountable difficulties
associated with the practice of the art of medicine. The same could
be said of the business of understanding competition. Awareness of
the difficulties that lie ahead is a necessary departure point. The
destination and the motivation we need to attain it is also well
described by the words and the spirit of the Hippocratic oath, which
exhorts us to be equal to the challenge and demands that we set the
highest standards in the practice of the worthy art.
xi
xii Acknowledgements
I wrote this book while at the employ of SRI International, a
research and consulting organization. Its views, conclusions and
recommendations do not represent the views of that organization.
This is a personal book I wrote to clarify my own thinking about the
art of competing in business. In tone and content, it is a personal
marker which describes what I believe I know, and what I know I
believe in, and for which I assume complete responsibility.
Burlingame. California EMILIO CVITKOVIC
The author and publishers wish to acknowledge, with thanks, the
following illustration sources and to state that they have tried to
contact all copyright-holders; in any case where they may have
failed, they will be pleased to make the necessary arrangements at
the first opportunity.
The Akron Beacon Journal. Ohio (p. 150) Business Week (p. 266); US
Commerce Department (p. 268); Creator's Syndicate, Inc. (p. 36); The
Economist (p. 177); Harvard Business ReviewfHenry Martin (March
April 1991 issue of Harvard Business Review) (p. 277); Monthly Energy
Review (pp. 156, 160, 180); The New Yorker (pp. 68, 75, 90, 103, 139,
184, 192, 254, 288); North American Electric Reliability Council
(p. 168); Recording Industry Association of America (pp. 165, 172);
San Francisco Chronicle (pp. 78, 282); Alfred P. Sloan, lr © 1963,
reprinted by permission of Harold Matson Company, Inc. (p. 163);
Richard Stine, Banbridge, Washington (p. 6); US Department of
Education (p. 293); USA Today (p. 105); Universal Press Syndicate:
Toles cartoon © 1990 reprinted by permission of Editors' Press
Service, Inc. (p. 13); The Wall Street Journal © 1989 Dow lones &
Co., Inc., all rights reserved worldwide (pp. 39, 159); The World Bank
(p.225).