MGT790 THE CRITICAL NEEDS OF STRATEGIC MANAGEMENT IN THE 21ST CENTURY BUSINESS LANDSCAPE FOR THE SURVIVAL OF SUSTAINABLE

COMPETITIVE ADVANTAGE IN MALAYSIA. BM7703BF Prepared by: Noorizathulazwin Bt Ahmad Timbul 2011742601 Prepared for: Associate Professor Dr. Norzanah Mat Nor Date of Submission: 18 March 2013

The business landscape of 21st century is foreseen to be characterized by the rise of a knowledge-based, multicultural, multiskilled and mobile workforce; the explosion of sophisticated telecommunications technology; and increased consumer demands (Grates, 1998). It is considered by ever changing trends and events that happen with so much rapidity that they take most business leaders by surprise. It is often faces with the rapid changes in economy and technology. The pace of change that companies like Apple and Google often release products and version along with software every few months so that customers are always click away from the latest version. On the other hand, the future belongs to people like Mark Zuckerberg of Facebook who comes up with innovative and market shattering ideas so often that most commentators wonder about how he and his team can do it so often. It has been said that companies need to change internally and externally with such alertness to make a new transformation. And this is what Facebook does with its approach towards new product launches that surprise the stock markets and impress the users. The critical needs of strategic management in the 21st century business landscape including several factors such as (1) speed: where successful organizations respond more quickly to customers, bring new products to the market faster and change strategies more rapidly; (2) flexibility: where organizations that move quickly are flexible. People must be multiskilled, they need to constantly learn new skills, and willingly shift to different locations and assignments. Flexible organizations work it in uncertainty, throw out job descriptions, and thrive on ad hoc teams that form and reform as tasks shift; (3) integration: which is the organization creates mechanisms to pull together diverse tasks and activities as they are needed. It focuses more on how best to accomplish business or work processes and less on producing specialized pieces of work that management will eventually pull together; and (4) innovation: where the successful organizations find innovation essential. They create innovative processes and environments that encourage creativity (Ashkenas et al., 1995). The term sustainable competitive advantage is used to describe a superior performers attributes and resources that are unable to be duplicated or imitated by its current or potential competitors on the edge to enter an industry and also last a long period of time. Sustainability of the competitive advantage of a firm therefore depends on the possibility of competitive duplication. It is an advantage that enables business to survive

against its competition over a long period of time. Hyper competition is a key feature of the new economy. New customers want it quicker, cheaper, and they want it their way. The fundamental quantitative and qualitative shift in competition requires organizational change on a unique scale. Strategic management is all about gaining and maintaining competitive advantage. A firm must strive to achieve sustained competitive advantage by (1) continually adapting to changes in external trends and events and internal capabilities, competencies, and resources; and by (2) effectively formulating, implementing, and evaluating strategies that capitalize upon those factors. As in Malaysia, the growth of the Internet and e-business has changed the way many companies operate. Due to rapid changes of this advance technology, Malaysia is having high sustainable competitive advantage therefore contributing to economic growth. An element of sustainable competitive advantage is Porter five forces model that is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and attractiveness of a market. The forces are (1) the intensity of rivalry between existing competitors: the strongest of five competitive forces is often the market strategy for buyer patronage that goes on among rival sellers of a product or service; (2) the threat of new entrants to the market: new entrants to a market bring new production capacity, the desire to establish a secure place in the market, and sometimes substantial resources; (3) the threat of substitutes: companies in one industry come under competitive pressure from the actions of companies in a closely adjoining industry whenever buyers view the products of the two industries as good substitutes; (4) the bargaining power of suppliers: whether the suppliers of industry members represent a weak or strong competitive force depends on the degree to which suppliers have sufficient bargaining power to influence the terms and conditions of supply in their favour; and (5) the bargaining power of buyers: whether buyers are able to exert strong competitive pressures on industry members depends on (1) the degree to which buyers have bargaining power and (2) the extent to which buyers are price-sensitive.