Innovation and Competitive Advantage: Changing Environments

The Changing Envi

ronment 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 outsid

e 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 organiz

ations 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 tur

bulent, 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

inno

vative 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 them

selves 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 groupin

gs 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 dive

rse 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

se

rvices 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 technolo

gy 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 in

novation 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

custo

mers 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 instill

ed 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 ex

ternal environmental

changesBe customer driven and focusedHave flexible strategies and processes that can meet the

needs and diverse requirements of customers, suppliers, distributors, regulators, and

stakeholdersBe able to quickly respond to the fast pace

of change in the environment by

recognizing and taking advantage of opportunities that emergeProactively meet and exceed the

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

changesBe customer driven and focusedHave flexible strategies and processes that can meet the

needs and diverse requirements of customers, suppliers, distributors, regulators, and

stakeholdersBe able to quickly respond to the fast pace of change in the environment by

recognizing and taking advantage of opportunities that emergeProactively meet and exceed the