MMT-2

The Changing Environment Organizations are now operating in a highly competitive environment that can be characterized in terms of increasing risk, limited ability to forecast, fluid organizational and industry boundaries, new structures and systems that permit and create change, and more diverse customer demands and expectations. No organization is isolated from the external environment, and there is continuous pressure to adapt and change if they are to survive and grow. The external environment includes everything outside the organization, including the political, economic, social, technological, regulatory, competitive, supplier, and customer environments. The level and pace of change is significantly greater than ever before, which has important implications for organizations and how they are managed. Collectively, changes in the environment create important consequences for the development and management of products, markets, and organizational capabilities. As external environments become more complex, dynamic, and turbulent, it also means that there are alternative opportunities. The rapid pace of change is emerging from new markets, technologies, economic conditions, demographic patterns, globalization, and the knowledge economy. Organizations now need to be more innovative than ever. While these changes eliminate some innovations and entrepreneurial activities, they open up opportunities for others. New markets mean new opportunities, and new technologies create new competencies. Some organizations aim to protect themselves against external threats and changing conditions. Others embrace the potential opportunities that can be found as a result of the threat.

In today's environment, to sustain competitive advantage, organizations need to recognize that customer groupings are more differentiated and competition has intensified. Change in one area such as technological advancement and development has resulted in changes in other areas such as more intensified competition as customers have access to a much broader and diverse group of companies to buy goods. For example, originally Google was a search engine; currently it has the world's leading mobile platform in Android and provides a strong alternative to Facebook in Google+. Amazon originally sold books; now it sells services competing with Apple iOS devices and Android. Apple originally sold computers and MP3 players; now it sells phones and tablets, dominating the market with the iPhone and the launch of the iPhone 4S, which introduced a new approach to search technology with Siri, its voice-activated search and task-completion service built in. Apple's iPhone 4S Siri voice search has intensified competition for Google. More recently, Apple launched the iPhone 5 and iPad mini, which emphasizes the significant pace of innovation necessary in the technology industry to stay competitive. Facebook provided the most disruptive web platform since Google's search engine. With 1.06 billion active users and growing, Facebook is rapidly extending its tendrils into the web at large; this competes with Android, Apple, and Google. To be successful, organizations must continually reduce costs, improve quality, enhance customer service, exceed customer expectations, and offer products and services that are innovative and have what customers value. These improvements are the very basic requirement to retain some market share.

Being competitive is very different than achieving sustainable competitive advantage. Achieving competitive advantage needs to be a core part of strategy and instilled within the management philosophy so that the organization will continually be innovative and entrepreneurial and this strategy is the foundation of the organizational culture. Competitive advantage requires organizations to do the following:

Adapt to external environmental changes Be customer driven and focused Have flexible strategies and processes that can meet the needs and diverse requirements of customers, suppliers, distributors, regulators, and stakeholders Be able to quickly respond to the fast pace of change in the environment by recognizing and taking advantage of opportunities that emerge Proactively meet and exceed the needs of customers in light of existing competition

Actively engage in R & D to continuously prioritize the development of new products, services, processes, markets, and technologies

Organizations that are more adaptable, focused, flexible, responsive, proactive, and engaged in R & D are in a more favorable position not only to adapt to the complex, dynamic external environment but to generate change within that environment and sustain competiveness. Innovation and entrepreneurship are the key sources of sustainable competitive advantage as evident from leading entrepreneurs such as Richard Branson (Virgin Group), Bill Gates (Microsoft), Pierre Omidyar (eBay), and Mark Zuckerberg (Facebook). Continuous innovation, entrepreneurial activity, and an ability to bring about positive changes are the key success factors (KSFs) that define corporate performance in the dynamic, complex, knowledge economy of the 21st century.

The Role of Innovation, Entrepreneurship, and Strategy in Achieving Sustainable Competitive Advantage Innovative and entrepreneurial organizations develop a strategy that can effectively lead to the commercialization of the new and novel products or services in the marketplace with a sustainable competitive advantage. Strategic management and entrepreneurship are dynamic processes that are intended to enhance organizational performance (Kuratko & Audretsch, 2009).

Strategic management focuses on how competitive positioning can create advantages for organizations that, in turn, enhance performance (Porter, 1980, 1996) and achieve sustained competitive advantage. Strategic planning requires top management to focus beyond the current external environment and envisage the organization's market position in the short, medium, and long term. It necessitates the ability to evaluate the resources and core competencies in terms of how they can be utilized to create new sources of value.

Innovation and entrepreneurship are the key to successfully developing competitive advantages. The challenge is to develop innovation and entrepreneurship as a core competence of the organization. In a global competitive economy, the most successful strategies are those that are integrated with innovative and entrepreneurial activities that offer superior value and create wealth. Strategy and strategic management define the direction of the organization and how well it is achieved. Management needs to develop a strategy that focuses on the best ways for the organization to create and sustain a competitive advantage while simultaneously identifying and developing new opportunities. Innovation and entrepreneurship are focused on searching for new opportunities that will create value for the organization, customers, and stakeholders. Strategy is focused on sustaining competitive advantage and achieving above-average returns. Simultaneously embracing entrepreneurial philosophies, an entrepreneurial climate, and entrepreneurial strategic behaviors increases the likelihood an organization will identify and use its unique capabilities as a pathway to increasing its performance (Ireland, Covin, & Kuratko, 2009). Therefore, the integration of innovation and entrepreneurship for opportunity identification and development and a strategy for sustaining competitive advantage are necessary for value and wealth creation. Organizations that can develop competitive advantages today, while using innovation and entrepreneurship to cultivate tomorrow's advantages, increase the chance of survival and growth in the long term.