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Problem

How might a firm apply basic defense strategies in a hypercompetitive environment?

Step-by-step solution

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Step 1/3

Strategies are basic needs in the world of competitive advantage. It is important to be knowledgeable as well as develop unique capabilities for sustaining in the hypercompetitive environment.

Step 2/3

Firms must apply basic defense strategies in the hypercompetitive environment as follows:

• Firms can use the industry-based approach. It includes a differentiation process. Firms can focus on being unique and create differentiation in the market. The product must be unique and must be able to attract customers. This will make customers pay a premium for the product.

• Another strategy can be referred to as cost leadership. It includes minimizing production as well as marketing costs. The firm must focus on sacrificing profits. Yet, it must create products from the cheapest sources. This will help in creating cheap products, that will stand out and cause an increase in the demand for products.

Step 3/3

As stated above, these are the two types of strategies that firms can use in a hypercompetitive environment.