Innovation as Source of Competitive Advantage
Strategic entrepreneurship – Innovation as source of competitive advantage
Global organizations face the challenge of adapting frequently to meet the needs of their customers, suppliers, and share-holders. Creating value for stakeholders is becoming increasingly difficult even for leading players like General Motors (GM) and Ford. A stream of continuous value-creating innovations by global competitors (e.g., Toyota and Honda) have challenged GM & Ford to reinvent themselves continuously.
The challenge of continuous and dynamic change is affecting firms across multiple industries. This includes even the players in IT Services industry such as Accenture / IBM / Infosys & TCS and their Business & Service models are changing due to the nature of competition. The winners and losers resulting from changes in this particular industry remain unknown. Being able to create a more attractive value proposition for customers is making it quite difficult for some of the more traditional players like IBM or Accenture since that means cannibalization of their existing revenue stream, changing the Business model of service & delivery and altering the Relationship matrix with customers in complete linear model.
The Challenges of competing in a global environment creates several tension-filled questions for firms:
In what markets should we compete? Should we offer standardized products across all markets or should we modify our products for local preferences?
How much risk are we willing to accept to compete in markets with which we are not deeply familiar? What kinds of skills should we develop in order to become more innovative?
Though all of these tensions (and certainly few more ) are important, of particular interest is one that change creates for firms; specifically, the need for a firm to