In business, change is inevitable, and it is crucial that businesses adapt to their
consumers wants as they change overtime.
This video investigates the factors which influence the dynamic nature of business,
the reasons why new business ideas are necessary and how new business ideas are generated.
Without meeting the needs of customers, it’s very unlikely that a business will survive
long term, never mind make a profit.
However, business is very dynamic in nature and change can happen overnight, but some
markets are much more dynamic than others.
Simply put, some markets change quicker and more often than others.
Therefore, it’s essential that businesses continually monitor and analyse the market
they operate within to understand its dynamic nature so the business can effectively and
efficiently react to any change.
This allows businesses to adapt their existing product range and services that they offer
such as Weetabix launching an on the go version of
the traditional breakfast cereal for consumers who have a busy lifestyle and need something
quick and convenient in the morning.
Businesses may also adapt their branding by making subtle changes to their logo and packaging
to ensure they stay relevant and up to date such as Cadbury’s have with their chocolate
bar packaging on numerous occasions over the years.
In addition, businesses also adapt their processes to enhance the shopping experience overtime
to keep up with changing buyer behaviours and continually meet the needs of their customers.
A good example of this is McDonalds and the way they have adapted the customer journey
and purchasing options, they have gone from a till system and a drive thru only to self-serve
machines, an app, and home delivery services.
All the above adaptations allow businesses such as Weetabix, Cadbury, and McDonald’s
to meet the ever changing needs of their consumers.
Alternatively, entrepreneurs may develop new and unique business ideas such as innovative
products and services after identifying a gap in the market as a result of any changes.
But what causes change, influences the dynamic nature of a market, and presents opportunities
for new business ideas?
Well, there are three key factors which we are going to investigate, these are: changes
in technology, changes in what consumers want, and products and services becoming obsolete.
Let’s take a look at these factors in more detail with some supporting examples of businesses
who have either adapted to these changes or developed new and original ideas as a result.
As we are all aware, technology is advancing at a rapid rate, and it is these changes in
technology which provide entrepreneurs with the opportunity to take advantage of gaps
in the market with new business ideas.
Alternatively, it could mean existing businesses may need to adapt their current products and
services to meet the needs of their customers.
Integrating E-commerce and M-commerce into its operations has become standard practice
for most of today’s businesses.
For example, the increasing power of web technologies and the rise of mobile device technology such
as smartphones and tablets mean that entrepreneurs can now run a fully functioning business from
a smartphone device and an internet connection alone.
These technological advancements have made entrepreneurship more accessible than it ever
has been before, with websites such as Shopify providing a platform for entrepreneurs to
open an online store overnight and fulfilment methods such as dropshipping meaning that
entrepreneurs don’t even have to stock the products they sell anymore, orders are fulfilled
automatically through a third party such as a wholesaler or manufacturer.
Another example of a technological advancement which has caused change is the introduction
of streaming services such as Spotify and Netflix.
In fact, Blockbuster was at one point the market leader in the video rental market and
was offered the opportunity to buy Netflix in its early form which at the time offered
a web based video rental service.
However, Blockbuster famously declined this opportunity and failed to adapt to the technological
advancements in their market, leaving the door wide open for Netflix to develop its
business over time to become the well-known streaming service that is widely used today,
ultimately leading to Blockbuster eventually closing its doors.
Changes in demographics, consumer tastes and trends in society are all very influential
factors in relation to the dynamic nature of business which leads to entrepreneurs and
businesses developing new products and services to meet these changes in what consumers want.
Changes in demographics such as age, gender, ethnicity, and levels of income all have a
direct impact on what consumers want, for example if the population was aging then businesses
who target older consumers as a segment of the market will be more popular.
Alternatively, a decrease in the level of income within the UK would lead to a rise
in popularity for discount retailers such as Aldi and Primark as the disposable income
of the population is reduced, thus causing a change in buyer behaviour.
Changes in consumer tastes and trends in society could be influenced by a variety of factors
including ethical and environmental concerns or simply because a product has become popular
and desirable.
For example, sneakers have evolved from an item of sportswear into both fashionable and
cultural commodities, with the global sneaker market valued at $79 billion dollars in 2020
and expected to reach $120 billion by 2026.
This rise in popularity for sneakers has been fuelled by millennials and Gen-Zers who have
a clear taste for sneakers and are willing to pay the price for limited edition models
via online platforms such as StockX.
Veganism is a societal trend which is on the rise in the UK due to concerns for animal
welfare and the planet from a growing audience which has caused major changes in what consumers
want, with many businesses such as McDonald’s adapting their product range with the introduction
of its Vegan McPlant Burger and Greggs launching the Vegan Sausage Roll.
Many products and services have a limited lifespan and at some point, in the future
will become obsolete and no longer be available for consumers.
The lifespan of a product can be tracked on the product lifecycle which allows a business
to analyse the life stage their product is in during its lifetime, right from the initial
launch through to decline.
By tracking a product during its lifetime, businesses can think of new and innovative
ways to adapt the product to prolong its lifespan or develop completely new products which would
meet consumer needs more effectively.
There are many examples we could use for this but technological products such as the mobile
phone are perfect.
The first mobile phone to be sold commercially was way back in 1983 but they were very expensive
and didn’t really meet the general consumer’s needs.
Things changed in the 1990’s the market started to accelerate with Nokia mass producing
the world’s first ever mobile phone and the market has gone from strength to strength
since.
Nokia was at one point the market leader and would compete intensely with the likes of
Blackberry and Motorola etc. all of whom adapt their mobile phones with every new release
such as adding new features which included colour screens, touch screens, and internet
access.
However, in 2008 a new player came to town, Apple.
They saw a clear gap in this market and believed they had the innovation to change the market
completely and become the market leader themselves.
You could argue they have been very successful in their venture into the mobile phone market.
Again, adapting their product overtime to meet changing consumer needs such as the ability
to FaceTime, take high definition photos, and stream a variety of media.
Whilst it’s difficult to see at this moment in time, the mobile phone could one day become
obsolete itself.
In fact, Mark Zuckerberg has just unveiled the long awaited smart glasses partnership
with Ray-Ban which will allow consumers to take photos, listen to music and make phone
calls as a minimum on the early versions.
Zuckerberg believes that this is just the start, suggesting that Ray-Ban Stories are
an important step towards a future when phones are no longer a central part of our lives.
So, who knows what the future holds, the only thing we can guarantee in business is change
due to its dynamic nature.
After watching this video, hopefully you’ve got a better understanding of how and why
new business ideas are developed, and existing business adapt their products and services
to meet the ever changing consumer needs.
If you want to learn more about business, don’t forget to subscribe to Two Teachers
on YouTube to see our weekly video uploads on key business topics.
Thankyou for listening and all the best.