© Ram Mudambi, Temple University, 2001 Competition: moderate versus hyper Most firms today are moving from markets where competition was moderated by the competitive moves of industry leaders to conditions of hyper-competition where firms position themselves aggressively against one another. In ‘moderate’ competition, firms position themselves around rather than directly against each other. Barriers are used to limit new entrants. Sustainable advantage is possible so long as industry leaders co-operate to restrain competitive behavior. In hyper-competition, on the other hand, firms are constantly seeking to disrupt the competitive advantage of industry leaders and create new opportunities for competing. Competitive advantage is sustainable only through continuous short-term changes that permit new bases for profitability and growth.

© Ram Mudambi, Temple University, 2001 Hyper-competition In hyper-competitive markets product repositioning is frequent, product life cycles are short and product design cycles are quick. Static sustainable competitive advantage is virtually impossible to achieve. Your competitors copy or surpass your points of strategic advantage quickly, allowing you only temporary superiority, making it necessary to continuously evolve.

© Ram Mudambi, Temple University, 2001