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The Winner’s Competitive Cycle Essay

Words: 320, Paragraphs: 1, Pages: 2

Paper type: Essay, Subject: Free

The Winner’s Competitive Cycle is an economic model which demonstrates how the benefits of a company can bring it to more and more success. According to this concept, if a company has definite advantages in the market (for example, better market share, better products, better price, lower costs, etc.), such benefits will allow this company to develop better and faster than its competitors, because bigger advantages bring to bigger and more effective positive outcomes. Therefore, this model illustrates the principle “success brings to more success” and describes a certain reinforcing cycle allowing the company to benefit from its increasing opportunities. Practically, this cycle can have several layers.For example, a British economist Finn Jackson describes the Winner’s Competitive Cycle as the following. In the first stages success can be achieved at the expense of better market share, higher volumes of sales and better marketing. In the second stage such advantages as lower unit costs and better investments can result in making the product better, causing more profits and greater market success. Finally, in the third stage, accelerated success can be achieved at the expense of optimization of business process, offering better services and extra cost advantages, which will result in increasing the amount of customers and greater commercial success of the company (Jackson, 2005).Certainly, the Winner’s Competitive Cycle can be the most effective strategy in terms of economic boom and business prosperity, but less likely during times of economic decline and recession, because the factors necessary for this model to work, including increasing competition, opportunities for market expansion and receiving more clients, as well as the opportunities to lower the costs and increase investments, can be provided only during the period of economic rise. In particular, according to the works of Kazuo Nimura, the tactic of the Winner’s Competitive Cycle was effectively used by many Japanese enterprises in the end of the 1950s, when Japanese economy was growing rapidly (Kazuo, 1991). 

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