What Are Major Reasons for Change in Business?
Companies change for several specific reasons. However, all business
change results from internal or external drivers. Internal drivers
include innovative leadership, survival instincts or financial goals.
External drivers include societal movements, technological evolution,
economic reality and customer demands. Whether innovative or reactive,
change is inevitable in companies that last.
Economic Reality
Economic factors compel companies to change
in many cases. If current business activities, products and services
don't generate the revenue necessary to sustain profit, change is
required. Often, companies that change early have a better chance of
developing new revenue streams. The economy can also create more
universal industry change. Many retailers turn to lower prices and
discount promotional strategies during poor economic conditions to
attract more budget-conscious buyers. The problem with this sort of
brief, reactive change is that it is sometimes difficult to restore a
quality image when the economy improves.
Societal Demands
Societal
pressure and customer demand also prompt company change. Many
businesses have become more green-friendly in response to growing public
pressure to preserve environmental resources. Government regulations
sometimes compel companies to react to public pressure even when they
otherwise wouldn't. Changing customer preferences also compel change.
Dunkin' Donuts recognized increased consumer demand for coffee drinks
and made that a focal point of product development and promotional
campaigns.
Innovative Leadership
Change is inherent in a business that
prides itself on innovation. Apple is an example of a company that had
to change and innovate to maintain the brand image it had created. Steve
Jobs realized that computers weren't going to sustain the success of
Apple and seized upon the emerging trend toward mobile devices with the
iPod, iPad and iPhone. New leadership also drives organizational change.
Public company boards sometimes oust executives to inspire change in a
stagnant environment. A new leader brings a different own leadership
style, philosophies and business insights.
Competitor Action
Competitor
action is a common trigger for responsive change. Companies sometimes
prefer the status quo until leaders see competitors evolve. If a
business doesn't respond to innovative competitors, it could fall behind
and lose customers, prestige and revenue. Blockbuster is a prime
example of a company that waited too long to change to mail-order, kiosk
and streaming movie technology. Its moves were too late to catch up to
the likes of Netflix and Redbox. Game developers are quickly shifting
gears to mobile applications as of publication. Those that fail may get
left beyond as traditional game players turn to tablet- and phone-based
games.
source: bizfluent.com
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