Factors Responsible for Changing Concept of Business
Image below depicts factors responsible for changing concept of business.
Seven main factors responsible for changing concept of business:
- Growing expectations of consumers.
- Advent of consumerism.
- Increase in the market competition.
- Information revolution.
- Rise of professionalism in business.
- Growing concern for safety of environment.
- Rapid development in various technologies.
Now let's discuss each of these factors lucidly.
1. Consumer expectations
Consumer expectations from business are increasing day by day. Today, most consumers prefer buying those goods and/or services which have a competitive price-quality ratio, are easily available in the market, and have an optimum capacity to satisfy their needs. Although they welcome innovation and creativity, they also expect reliability in goods and services from business firms. This has encouraged most businesses to follow consumer expectations and start focusing on consumer-oriented goods and services.
Therefore, we see that, entrepreneurs have shifted from their only profit earning motive towards satisfying consumer's expectations.
Consumerism, in its simplest form, means to support the social rights and economic interest of consumers. In general, it is a term which is also used to refer to a consumer movement, consumer activism and consumer protection. It is a movement of consumers, by the consumers and for the consumers. It's their collective approach to safeguard their rights, fight and seek justice in case being cheated and neglected by unscrupulous businesses, educate and create awareness, solve problems and tackle challenges with unity.
Today, consumerism has made consumers more aware of their rights and duties. Now, they have access to legal courts where they can lodge their complaints and seek justice. Overall, this has empowered and brought them in a much better situation when compared to past decade.
Consumers' unity, awareness, legal rights, and empowerment have compelled business firms to change their attitude towards consumers.
3. Increasing market competition
As economies of various nations are opening up, one global market is taking its form. Although this huge market has opened many new opportunities, it has also brought other tougher challenges. One of the stiff challenges is increasing competition in the market. The increase in market competition has compelled many businesses to either enhance or change their business activities. The focus is now on to stand out unique in the market and earn goodwill. This can be mainly achieved by providing a best balance of a price-quality ratio on goods and/or services, studying customers' feedbacks, satisfying their demands optimally, attending their grievances and resolving them soon.
In today's cut-throat competition only those businesses will be able to survive and flourish who can better attract, attend, communicate, understand and satisfy their customers' needs and/or demands. A satisfied customer can become a loyal customer, and if a business earns such a customer then it gets a long-term success key of the competitive market.
Hence, the increasing market competition has influenced change in the concept of business. As a result, viewpoint of business has moved from only profit-earning towards customer satisfaction.
4. Information revolution
Today, we live in an information age which has revolutionized the way we interact with each other. Gone are the days when managing and accessing a large amount of hard information base was a tedious, costly and a time-consuming task. With the advent of modern computers, faster broadband-internet, speedy and always on wireless connectivity, the scenario has changed remarkably. Today, information can be accessed within few seconds and is just a click away. Its management is also not a big problem, and the same can be properly organized, stored and retrieved anytime anywhere with the help of computers. Latest portable computing gadgets and wireless connectivity have taken information accessibility even to a further level and has placed it right in the hands of everyone.
Information revolution has greatly improved the productivity of the business world. Now business-related decisions can be taken quickly and efficiently. Registering, storing, managing, securing and accessing all customer-related information is easy, cost-efficient and faster. This has enabled the businesses to provide timely and efficient services to their customers, even before they ask for it. For example, a hotel can store information of its regular customers' preferences or likes in regard to their favorite foods and beverages, and serves them efficiently. Another example, an online retailer can keep a record of customers' birthdays in his e-commerce database and wish them automatically.
The information revolution has not only helped the concept of business to satisfy customers but also to delight them.
5. Professionalism in business
The professionalism is growing in the business world. Skilled managers use a professional approach to manage their business. They apply managerial skills to conduct business activities in a systematic way. Here, their aim is not only to help their business earn profit but also to serve their customers better than their competitors. Since profit is impossible without customers, they always try hard to retain their existing customers and strive even further to get new customers. They continuously aim to increase their customer database, serves and satisfies their current customers, and to expand the business they are managing. Overall, their actions benefit the society as a whole.
The professional role displayed by skilled managers has made an impact on the concept of business and has oriented it from only profit motive and customer satisfaction towards social welfare.
6. Growing concern for environment
Since the industrial revolution of 1872, human civilization has continued to make its industrial-progress at the expense of environmental degradation. Industrialization triggered a mass consumption of limited available resources to meet the growing demand of consumer goods. In the race of industrial establishments, production of goods was given the highest priority over anything else. Industries started expanding to cope with this growing demand and soon started exploiting the environment in a ruthless haphazard manner.
Following issues raised the alarm of environmental exploitation:
- Rapid Deforestation,
- Loss of biodiversity,
- Pollution of air, water and soil,
- Global warming and climate change,
- Its overall impact on human lives.
This caused a great ecological concern and demanded immediate action for the protection and preservation of environment from further exploits and harms. Governments of various nations came together to find a solution on this concern. They soon established international environment laws. Rules were made to minimize and control the ongoing environmental harm. Objectives were put forward to protect the sensitive ecological balance.
Its implications were seen in form of important actions like:
- Enactments of environment laws.
- Protection of biodiversity.
- Ban on use of harmful chemicals.
- Encouragement to recycling of waste-materials.
- Promotion of production of eco-friendly items.
- Raise environmental awareness in masses.
- Monitoring consumption of natural resources.
- Allocation of funds for developing greener technologies.
Today, many NGOs are also helping governments to achieve the mission of protection and safety of environment.
Thus, the growing concern for environment has also changed the concept of business and made environmental safety its priority.
7. Technological developments
Technological developments contribute immensely in the growth of business. It has replaced slow man-made production into a fully-automated machine process. It is now possible to produce high-quality goods in short-time with fine accuracy that too with minimal wastage of raw-materials. Rapid technological developments seen in main sectors of economy like energy, agriculture, communication, production, transportation, and construction has overall enhanced the growth potential of most businesses. With the growing concern for the environment, greener technologies are also emerging to help business produce high-quality eco-friendly goods.
Thus, technological developments also left mark on the concept of business.
These were main factors responsible for changing the concept of business.