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Timing-based Competition

July 1st, 2005 · No Comments

HBS Working Knowledge has an article by Donald Sull with Yong Wang:

Entrepreneurs and managers must consider not just one, but multiple, windows of opportunityincluding customers, competitors, capital markets, technical evolution, and government policy among others. To further complicate matters, these windows vary in importance over time and are constantly shiftingopening a crack or threatening to close altogether. As a result, entrepreneurs must get the timing right to get through the windows that matter.

To simplify the task of evaluating the timing, it is helpful to focus on three windows of opportunity, specifically customers, competitors, and context (including external factors other than buyers and rivals), which consistently matter in evaluating whether the timing is right to pursue an opportunity. Many people have discussed time-based competition, in which the faster rival beats the slower. The three windows of opportunity model, in contrast, focuses on timing-based competition. There is no assumption that faster always trumps slower. Wahaha, for example, pioneered the children’s nutritional drink segment. In other cases, however, Wahaha followed early entrants who educated consumers on the benefits of enriched milk, bottled waters, and cola. Success depends on concentrating resources on the right opportunity at the right time. Getting the timing right, to a large extent, requires managers to make their move when all three factors are aligned. Timing will, of course, also be influenced by internal factors. Much of timing, however, depends on forces largely outside the control of an entrepreneur or manager.

Tags: Entrepreneurship

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