The global business environment today stands influenced by manifold forces and trends that tend to define the future directions and that how businesses are going to interact with their customers and respond to confronting competition. In an age of advances in technology to religious fundamentalism, business culture has come to be defined by events dictated by emerging forces, leaving the businesses with little choice but to adapt to the dynamics of the changing times and to devise strategies that may help in adapting to the needed requirements of the customers to identify their present and future choices.
Even in current economic climate, forces behind the change are drumming in an unparalleled speed and power. It is thus important to be aware of these forces and trends which are shaping the business world, and it is essential for professionals to comprehend how businesses can adapt, take advantage, and prepare for the future shocks.
The opportunities and risks of emerging markets Emerging markets are expected to be able to compete with mature markets in the next few years, and are going to gain more economic and political dominance. These markets are expected to further flourish with trade and investment, and the trend will inevitably impact the businesses around the world. These directions will also ask the businesses to formulate strategies which are suitable to the environment around them whether or not the emerging markets follow the 'survival of the fittest' rule.
The emerging markets possess young and growing population and these characteristics make the emerging markets as a focus of rising consumption, production and the provider of capital, talent and innovation. In order to gain from these markets, the businesses are focusing on their local presence either by having local partnerships or becoming part of joint ventures.
The businesses in the emerging markets are going to face risks from actions like breach of intellectual property rights, volatility of currency or exchange rates, geopolitical instability and very low safety and quality standards.
Culture and ideologies Ideologies and cultures are a force to reckon with and they define how businesses are required to be conducted. Whether the ideologies are political, cultural or religious, the believers of the ideologies hold a strong conviction and are deeply committed to maintaining and defending the ideology, even by force and intimidation. Ideologies thus dictate how, when and where the businesses are to be conducted; the businesses are thus adapting to devise strategies for operating within this kind of world setting.
Emerging money-based caste system Businesses are becoming much more adept at identifying the top customers by knowing which psychological buttons are to be pushed to capture them. The goal is to create extravagance and exclusivity for the select few, even if it stirs up resentment elsewhere.
Businesses are moving where the money is, and are providing innovation to attract the existing demand. Special treatment for the very rich isn't personal, it's business. Public officials in Los Angeles have agreed to lease a separate facility at LAX to a private firm that would serve celebrities or anyone else willing to pay $1,800 to skip the traffic jams and lines at the main terminals.
Businesses are now willing to go to pamper the biggest spenders, because the businesses now know that:
i). What customers hate is an attempt to hide stuff and not being honest. Transparency is becoming an important virtue of modern business.
ii). Offering an ordinary customer just a whiff of the rarefied air can actually enhance the bottom line, even if it stirs a certain amount of envy and resentment.
iii). New demands are being created by the most affluent shoppers hence in future goods are to be aimed at the wealthy and more offerings are to be made of new products.
iv). Businesses can now pinpoint and favour the wealthiest customers in ways unimaginable even a decade ago.
v). The premium customer doesn't want to be asked questions, they don't' want friction, they want things to happen through osmosis.
vi). These customers want that hassle is precisely calibrated to just how much one can pay.
vii). The virtues of elite segmentations require a directness that might well serve as fodder for support among business elite.
The political climate
Government intervention Having authority, power and command, it is not a question anymore that why the government is always an effective driving force of a nation's economy. Even today, in global politics governments have been increasing their dominance even in the private sector, and this trend is expected to continue in the coming years. The taxation and fiscal policies being implemented by the government are going to influence business costs. Similarly the interest rates affect many economic policies. However, business leaders are required to keep in mind that current government policies are not forever as they can also change in an unpredictable time. Thus, it is better to have a business outlook with taking into consideration the increased role of the government in the global business affairs.
Support from the community In an era of unprecedented social, economic and environmental change, in which public trust in business has been shaken, it is vital that businesses take steps to grow without compromising long-term business, environmental and social sustainability. Sustainability makes good business sense. The companies managing and measuring their corporate responsibility issues outperform their opponents on many counts including the shareholder return. Furthermore, such businesses recover more quickly from the financial crisis. The community also helps businesses to get changes in regulations which hinder their growth. In many cases government regulators are dependent on community support to allow business operations, for example, issues related to environment.
The business community relationship can result in increased business engagement in local neighbourhoods; increased development of their employee's skills and motivation through volunteering; increased diversity of employees; improvements in the social impacts of their products, services, and marketing; recruiting, investing, and procuring locally; better local business relationships; reduced operational costs; and ultimately, the creation of more sustainable communities.
Advances in science and technology Advanced technological tools and new digital platforms capable of boosting businesses opportunities and competitive advantage are bombarding our minds. Technology obviously revolutionises ways and means how businesses can operate. Even small businesses already have access to these technologies and they are effectively competing with bigger companies and organisations. One can observe the use of computers, servers, analytical tools, websites and other technological platforms to improve the competitive edge in the market. The technological revolution will continue at a quick pace, and businesses are going to be re-shaped by these changes in the future.
Redistribution of knowledge and workforce The knowledge regarding how businesses operate is undergoing a change. The environment relating to workforce is currently under constant change. Young and knowledge based workforce is needed by the industrial economies and that is why immigration has become a hot debate. Young people who make up the labour pool are already demanding differently from the previous generations. They are seeking for a different type of fulfilment, and are expecting more from employers.
The modern business world is already allowing people to change careers and jobs in a snap, regardless of their college degrees and distinctions. And with this radical shift in the workforce, the productivity, efficiency, and output of the businesses is expected to change.
(The writer is an advocate and is currently working as an associate with Azimud-Din-Law Associates Karachi)
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