The Proliferation Trap: How to Manage Multiple Threats to Your Competitive Position

By: Richard A. D'Aveni

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Synopsis: The fragmentation of markets and new, more focused business models have created many narrower markets where there once were a few broad ones. If rivals are using these new, narrower positions to slice away slivers of your market, you have become a victim of the proliferation trap. But you cannot fight everyone, everywhere, all the time. In this chapter, Richard A. D'Aveni shows how to go into battle. He first describes the telltale signs of the proliferation trap, then offers a set of diagnostic questions to help you evaluate your own vulnerability to proliferation. Using examples from the hotel industry-including the Starwood, Hilton, Holiday Inn, and Choice organizations-and the city of Las Vegas, he shows how companies threatened with the proliferation trap can escape it by selecting which threats to fight, destroy it by overwhelming threats, or turn it to their advantage by outflanking the threats. This chapter was originally published as Chapter 3 of Beating the Commodity Trap: How to Maximize Your Competitive Position and Increase Your Pricing Power.