1. What is hypercompetition?

Is the outcome positive for corporations in the IT

industry?
2. What is your opinion of Apple having a code of conduct for its suppliers? What
would Milton Friedman say? Contrast his view with Archie Carroll’s view.
3. Why should a profit-making organization be socially responsible to its various
stakeholders?
4. What is stakeholder analysis? Explain the steps taken to achieve the identification
and evaluation.
5. Why do some employees of an organization behave unethically? Why is it
necessary for an organization to develop employees’ ethics?

Answer

1. Hypercompetition can be defined as organizations' use of tactics to disrupt the competitive advantage held
by industry leaders. Hypercompetition typically occurs at a rapid pace. For example, let's say that you own a
fast-food restaurant and your items are priced slightly higher than a rival fast-food chain. If you decide to
adjust your prices to be closer to or lower than your rival, that is hypercompetition.
Hypercompetition is rapid and dynamic competition characterized by unsustainable advantage. It is the
condition of rapid escalation of competition based on price-quality positioning, competition to protect or
invade established product or geographic markets and competition based on deep pockets (financial capital)
and the creation of even deeper pocketed alliances. Often a characteristic of new markets and industries,
hypercompetition occurs when technologies or offerings are so new that standards and rules are in flux,
resulting in competitive advantages and profits resulting from such competitive advantages cannot be
sustained. In order to compete irrespective of how short-term the competitive advantage is, companies can
implement a strategy based on finding and building temporary advantages through market disruption rather
than trying to sustain an unsustainable advantage.
Price wars are easy to initiate but usually very expensive for companies. For example, in
1975, Datril launched a product at a much lower price than Tylenol and captured 50% share in test markets.
Tylenol responded aggressively by reducing its own price and launching its first ad campaign, because
Tylenol could sustain lower prices due to scale economies. While Datril ended up with less than 1% of the
marketshare, Tylenol gave up a lot in profits.
To escape price wars, companies try to occupy different locations on the price—quality axis,
using micromarketing, offering mass customization and shifting strategies based on the industry trends, for
example the luxury car segment has moved from a redefine-perceived quality approach of product offering to
fuel efficiency during the energy crisis, safety and comfort, 24-hour road-side assistance, micro-marketing
and mass customization. The problem with all of these strategies is that they are highly imitable.
2. Apple is committed to the highest standards of social and environmental responsibility and
ethical conduct. This Code outlines Apple's expectations for Supplier conduct regarding labor and
human rights, health and safety, environmental protection, ethics, and management practices.