Competitive strategy

The Chinese market shows all signs of hyper competition, namely dynamics, complexity, and evolution. Boundary conditions of the competition are changing fast. The time lags between entrepreneurial actions and reactions are short - the business environment changes and adapts quickly.

Small changes in the complex supplier structure can result in a completely different market development. This complexity makes it difficult for managers to make well-founded decisions. Mental decision models from the West cannot be applied, because they rely on simplified and linear relationships that do not integrate new and context-sensitive information in China. A dynamic strategy exploits existing market potential while generating new products, services, sales channels, or business models.

Defending competitive advantages

In China, competitive advantages often result from the ability to react quickly and determinedly. This is especially true for industries that are strongly influenced by consumer trends, technological innovations, and consolidations. The Chinese market is so dynamic that market advantages often erode on short notice. Successful companies must pay attention and adapt quickly. Dynamic, competitive companies create flexible, learning organizations that continually seek new advantages. Companies continuously reinvent themselves and upgrade resources and positions, preventing their competitors from undermining their activities.

Development of dynamic competitive strategies

In order to develop an effective and dynamic competitive strategy, Western managers must identify the Chinese arena of competition as well as the conditions to generate new competitive advantages. They need to anticipate opposing steps, know the competitive options, and analyze possible effects of a chosen strategy.

The effectiveness of a chosen strategy in Chinese markets depends on the company's ability to anticipate and respond quickly to new customer expectations and competitor reactions. Successful companies must also respond to changes within the competitive environment, including new regulations, innovative technologies, changing demands from customers and new emerging competitors - and counterfeiters.