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