Protect against imitation

Mechanisms to protect against imitation are:

Imitator	Incumbent
Requirements for successful imitation	Barriers against successful imitation
1) Must be able to identify competitive superiority	* Withhold information about profitability * Forgo short-term profits for long-term success
2) Must be willing to imitate	* Deterrence (afschrikking, koude oorlog): signal promise to retaliation * Make commitments to make threat credible * Pre-emption: exploit all available investments opportunities/secure access to resources
3) Must be able to understand sources of competitive advantage	* Tacit knowledge: rely on skills, processes or culture/resources that are implicit * Causal ambiguity: rely on complex multidimensional mix of sources
4) Must be able to build / acquire necessary resources	* Base differentiation on resoureces that are rare/immobile/contracted * Exploit time tags

Companies can find themselves in

1. Sustaining circumstances
   1. Incremental innovations
   2. Higher margins by selling better products to the most demanding customers
2. Disruptive circumstances
   1. In contrast to sustaining innovations, disruptive innovations are not focused on bringing better products to existing high end customers
   2. Instead, they usually tend to be significantly worse in the original performance dimensions
   3. But they excel in other benefits such as simplicity, convenience and most importantly, a lower price

Part of: M8-S2 - Reading - Strategies for E-Business - Chapter 6 - Sustaining Competitive Advantage