Tag Archives: Hypercompetition

Marketers should go beyond SWOT analysis

Richard DAvneni

At the Dong-A Business Form, Richard D’Avneni, Bakala Professor of Strategy at the Tuck School of Business at Dartmouth University, gave an interesting talk about Hypercompetition, which is the term that he coined about 20 years ago arguing that there is no sustainable competitive advantage. In this talk, he emphasized the dynamics of market by telling us that Sears or the retailer with 90-year successful business history cannot help but leave the industry within only 15 years. Thus, he made a persuasive argument that well-known strategy/marketing tools such as SWOT analysis do not work anymore.

According to him, firms use the SWOT-based strategy for multiple times and, therefore, “learning” takes place. Imagine a firm uses the SWOT analysis and then selects a specific strategy based on some combination of Strength, Weakness, Opportunity, and Threat. In this case, the firm is highly likely to win over its competitors. However, those losing competitors learn what strategy the winning firm will select in the next round (e.g., when launching different products or when entering different markets) and they are able to respond to the same strategy smartly. This suggests that a single-shot SWOT-based strategy works but it does not work in the multiple contexts.

Then, what is an alternative tool that marketers could use when they want to conduct 3C analysis (understand consumers, companies, and competitors)?