D’Aveni’s 7S framework was created by strategy expert Richard A. D’Aveni. D’Aveni’s 7S framework is an approach to directing an organization in high velocity or hypercompetitive markets. The framework was designed to enable a business to remain competitive through a series of initiatives delivering temporary advantages. According to D’Aveni, this strategy is preferable to restructuring the business to maintain equilibrium or sustain competitive advantage.
Understanding D’Aveni’s 7S framework
D’Aveni’s 7S framework was created by strategy expert Richard A. D’Aveni.
The framework was designed to enable a business to remain competitive through a series of initiatives delivering temporary advantages. According to D’Aveni, this strategy is preferable to restructuring the business to maintain equilibrium or sustain competitive advantage.
In other words, D’Aveni believes that sustaining a competitive advantage in the modern era is impossible. Traditionally, slow-moving and stable markets were dominated by one or two major players. In a new era that D’Aveni calls hyper-competition, firms move quickly to disrupt the competitive advantage of market leaders.
Hyper-competition is caused by several factors, including:
- Fragmentation of customer preferences.
- Rapid technological change.
- The diminishing of geographic and industrial barriers due to globalization.
- Significant global alliances among competitors with deep pockets.
In this environment, competitive advantage is no longer sustained but continually created, eroded, destroyed, and then recreated through strategic maneuvering.
The core components of the 7S framework
D’Aveni believes that a set of seven guidelines will help businesses sustain success in the hypercompetitive era.
Let’s take a look at each in more detail.
- Stakeholder satisfaction is key to winning interactions with a competitor. The most important stakeholder is the customer, but employees are also crucial to success. They must be empowered and motivated to generate new means of delivering value to the customer.
- Strategic soothsaying describes the process of proactively predicting what consumers will want or need in the future.
- Speed is vital – both in responding to counterattacks and taking advantage of opportunities.
- Businesses should use the element of surprise to stun their competitors. While IBM was attempting to dominate the personal computer market with a strong brand and sales force, it was blindsided by Dell and its highly successful direct mail and telephone sales distribution network.
- Pay attention to signals, or announcements of strategic intent to dominate. When effective, signals can be used to manipulate the future moves of competitors.
- Shifting the rules of a market can greatly disrupt rival companies. For better or worse, Gillette changed the rules of the shaving market when it introduced the disposable razor. This shifted the focus of the market from quality and price to convenience. Here, aspects of Game theory can be used to guide strategic options.
- Simultaneous or sequential thrusts describe an organization using several moves in quick succession. A classic example is a series of product announcements in different geographic markets to mislead or confuse a competitor.
- D’Aveni’s 7S framework helps businesses become more successful in high velocity or hypercompetitive markets.
- D’Aveni’s 7S framework argues that slow and stable markets dominated by one or two major players are a thing of the past. In this new era, every business must make rapid and concerted moves to disrupt the competitive advantage of market leaders.
- D’Aveni’s 7S framework is underpinned by seven guidelines or best practices. They suggest possible strategies for success in markets where competitive advantage is continually being destroyed and recreated.
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