4 Stages of Hypercompetition
D'Aveni argues sustainable competitive advantage is not really possible. He shows a mechanism that causes faster and faster erosion of competitive positions. D'Aveni's four stages of hypercompetition
1) Advantage based on differentiation (quality) > over time the quality difference gets eroded and price wars begin;
2) Advantage based on raising barriers to entry > over time the barriers get eroded by outflanking and niching by more flexible competitors;
3) Advantage based on know-how > over time the superior know-how gets eroded as technology moves on (Schumpeter);
4) Advantage based on deep pockets (mergers, acquisitions, market power) > over time this fails as pockets are depleted in the attempts to fend-off aggressive competition.