Strategic Management: Competitiveness and Globalisation 7th ASIA Pacific Edition by Dallas Hanson So

change in technology. Only the organisations which adapt to change survive.
A term that is used to describe the rapid and consistent replacement of current
technologies by new, information-intensive technologies is perpetual innovation. This
implies that innovation – discussed in more detail in Chapter 13 – must be continuous
and carry a high priority for all organisations.
The shorter product life cycles that result from rapid diffusion of innovation often
means that products may be replicated within very short periods, placing a
competitive premium on an organisation’s ability to rapidly introduce new products
into the marketplace. In fact, speed-to-market may become the sole source of
competitive advantage. In the computer industry during the early 1980s, hard disk
drives would typically remain current for four to six years, after which a new and
better product became available. By the late 1980s, the expected life had fallen to
two to three years. By the 1990s, it was just six to nine months.
Now the source of competitive advantage is constant innovation and speed to
market. Apple is a great example as it innovates continuously, with frequent new
product launches around the world. Similarly, the fast-fashion brand Zara, makes sure
Chapter 1: Strategic management and strategic competitiveness 1-9
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
Australia Pty Ltd. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
that it only takes four weeks from design to store display, compared to an industry
average of four months. This can be a challenge for mature and traditional
organisations.
The rapid diffusion of innovation may have made patents a source of competitive
advantage only in the pharmaceutical and chemical industries. Many organisations do
not file patent applications to safeguard (for at least a time) the technical knowledge
that is disclosed in a patent application.
Disruptive technologies (in line with the Schumpeterian notion of ‘creative destruction’)
can destroy the value of existing technologies by replacing them with new ones. Current
examples include the success of Air Pods, Google Chromecast and 5g.
The information age
Changes in information technology have made rapid access to information available to
organisations all over the world, regardless of size. Consider the rapid growth in the
following technologies: personal computers (PCs), mobile phones, computers, personal
digital assistants (PDAs), artificial intelligence, virtual reality and massive databases.
Such examples show how information is used differently as a result of new
technologies. The ability to access and use information has become an important source
of competitive advantage in almost every industry because:
• Data is vital to understanding customers’ needs and to accommodate the interest
of other stakeholders.
• IT is a great source for product and supply chain innovation.
The ability to access a high level of relatively inexpensive information has created
strategic opportunities for many information-intensive businesses. For example,
retailers now can use the internet to provide shopping to customers virtually anywhere.
STRATEGIC FOCUS
The core of Apple: Technology and innovation
Apple has been on a hot streak for a couple of decades. It is an exceptionally
innovative company and its products including iPod, iTunes, iPhone, iPad, Apple
Watch, and Air pods have revolutionised multiple industries. Its brand is incredibly
strong on a global scale and customers continue to purchase its expensive products
even though cheaper substitutes abound. As a result, there were 1.4 billion active
Apple devices in 2019, earning revenue of 260 billion in 2019! The core factor in this
success story is technology development and innovative products.
Teaching Note: Apple illustrates the power of well-conceived and managed
innovation. Over the years, it has produced a number of breakthrough products
that are in high demand. Ask students to compare some of Apple’s products with
those of competitors, particularly Samsung. What do they know about the
products and how important is the strength of the Apple brand in shaping
perceptions? Ask students if they think that Apple will be able to continue this
momentum into the future.
1-10 Hanson 7e Instructor’s Manual 
Hanson, Backhouse, Leaney, Hitt, Ireland, Hoskisson, Strategic Management, 7th Edition. © 2022 Cengage
Australia Pty Ltd. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly