Profound and lasting changes are afoot in the high‐tech industry. Only those high‐tech companies that align their business models for the new horizontal and hypercompetitive future will succeed. The seven deadly signs of the new competitive environment are: (1) growing downward pressure on price with an ever‐increasing demand for greater performance; (2) greater complexity for customers as they face the unbundling of hardware options, integration choices, and multi‐company business coordination; (3) a new distribution of value: greater value to innovative component makers and solution integrators; less value for product design and assembly; (4) branding and customer relationships will differentiate commodity products; (5) collaborative networks will emerge; (6) global supply and global customers will mean global organizations; (7) competitors will encroach horizontally. Recommendation: proceed with a five‐step approach to develop a new winning strategy: (1) pick a horizontal space; (2) redefine and Web‐enable your value propositions; (3) assemble your collaborative networks; (4) integrate your internal operations globally; and (5) realign your organization and technology. Studies demonstrate that during downturns, advantage shifts to companies that continue to invest strategically.
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