Business Cannot Afford to Stand Still - Essay Example

Business cannot afford to stand still. The world and its population are constantly changing’ Introduction: The world is witnessing a shrinking phenomenon and more so in the last two decades. The trends, practices, lifestyles and cultures are merging and becoming more and more alike. This phenomenon is called globalization and is here to stay as the people of the world continue to migrate to different corners of the world. Besides migration, the factors like media, entertainment travel and global businesses have brought in what are called transnational ways of living. A state of the art Microsoft facility in a major city of India for example brings in international work culture. All of the above factors have contributed and continue to contribute immensely to the phenomenon that is called globalization. However, what is more interesting is the fact that the trend brings in loads of business opportunities for the Entrepreneurial ventures as well as the existing Businesses. These opportunities come in various forms. For example, the increase in the number of elder population in Germany has made the businesses to venture into what is known as silver marketing. The trends towards specialization and expertise in specific business areas are immediate results of the demands created by demographic and social changes. The present study seeks to provide an overview as to how the globalization and other indigenous factors affect the demographics and social structures of regions. Further, it shows how the above factors present business opportunities and in certain cases challenges to be overcome for the businesses and governments alike. Review of Relevant Literature: The businesses around the world are witnessing changes in the demographic situations and thus are bound to modify their business marketing strategies around the changing character of the populations. Page (2010) contends that there exist a great variety of factors that influence the way the organizations operate. It is evident that factors like unemployment, old age, economic downturns have made the people change their buying patterns. Thus the businesses around the world need to adapt to such changes and prepare themselves to serve the people better. It is within the last two decades that the social and cultural perspectives have changed drastically. The perspectives relate to the aspects like concerns over environment and a healthy lifestyle. This led to changes in environment policies of the companies. For example, the plastic bags could not used as freely as earlier. This gave birth to the recyclable packing material in the form of bio degradable bags manufacturing (Page 2010). Prior to creation of business plans, it becomes important to study the external environment of the forces. The investigation of the social, legal, economic and political environments exercise influence over the businesses. These environment scan is also important to know the competitors plans. The forces behind the changes are themselves continually monitored and thus are found to be in a state of change. The social factors are associated with behavioral patterns and thus change the character of the fashions and lifestyles. The age aspect of the population also changes with time and the potential market situations are altered (The times 2012). The world is evolving at a very fast pace and there exists a need to figure out how the world will cope with the changes within.. Some very pertinent questions are posed as to the businesses playing an ever increasingly greater role in the society. The trend towards specialization and expertise is likely to lead to formation of what might be called mutual networks (PWC 2012). It has been conceptualized that world can be divided into three categories as follows: The Blue world: This is where the big companies have all the clout and majority. The green world: Where sustainable business is a good form of business. Orange world: This is where the businesses are fragmented though networked to a great extent. The companies as well as the various regions as in countries and International socio economic zones are faced with the difficulty that comes with demographic changes. For example an ageing population gives companies immediate challenges to face, like healthcare risks. The healthcare risks involved give the companies to reshape their thinking around which they devise their strategies (CSR Europe 2012). The age based marketing is finding its space in the business world. The existing age based products will have limited appeal to the newly ageing populations around the world. This is particularly so in the case of the ageing baby boomer generation. These people do not like to see themselves as old. Thus a new range of products directed at this population and being age neutral in image and character shall have to be devised and designed. There seems enough evidence to suggest that the businesses and brands should become age neutral. In countries like Germany, there is an emerging trend wherein the marketing is acknowledging and accepting the increasing economic power of the elderly. The increased buying power of the age old population and the differentiation required, have forced the companies to take a serious look at the needs of the ageing population. An important conceptual underpinning in the whole case is the idea of age autonomy to the elderly. The products and services that help the elders preserve their autonomy will be successful with this segment in the long run (Kohlbacher 2010). Brown (2000) observes that the changes in the society have an impact on the business decisions. Such changes have a demographic and a social aspect. Businesses are responding to these changes in numerous ways. For example building more homes for the elderly has been on the agenda for quite a while. Another way this need is being met is by creating more jobs for the elderly. Also, flexible working hours have been incorporated to help the female workers adjust to the working schedules and environments. The declining death rates as well as the birth rates, this has led to a growing population of the elderly. This increasing population makes it worthwhile to target products at this group. Since many of these people have a disposable income and time to spend on leisure and holidays. Apart from the age and sex factors, the demographic factors like place of origin and culture are also making the economies around the world benefitting from the trend of immigration. The immigrations around the world change the composition of the population. This brings the businesses to focus more on the needs of the new entrants into the demographic sphere. It has been observed that the UK economy has immensely benefitted from the inflow or immigration of foreigners. Baron and Shane (2007) observe that the social and demographic changes are an important source of Entrepreneurial activity. The changes in the way people dress or eat and live provide the entrepreneurs with the opportunity to cash in on. The changes in tastes can be an indicator of immense business opportunity. Apart from the social changes, the changes in demographics like the size, growth and distribution of human population too is an immense source of entrepreneurial activity. Further, they discuss the reasons as to why the social and demographic changes are such a great source of entrepreneurial opportunity. They cite two major reasons for the same. First being, that they alter the demand for the products, which in turn create opportunities to produce and sell different and varying offerings. Secondly, they enable production of products more suitable and appropriate than the ones presently available. Kew and Stredwick (2005) have shown how the demography has major influences on the businesses and the governments, who need to respond positively to such changes. It is imperative for the governments as responsibility towards the people to take into account such changes. This also has an impact on the way the businesses operate. Besides the changes have a direct impact on the same. They further evaluate the appropriateness of the responses by the businesses and the governments to such changes. They have cited the example of the Latinos who migrated to the US in large numbers and have a high impact on the US economy. However, there are some challenges with the opportunity that comes with change in demographic structure of a region. One of the challenges is language barriers. The businesses need to address the language problems posed by the changing composition of the population. Observations and conclusion: Based on the above review of relevant literature, the following observations are made: The trend towards globalization is the major contributor to demographic changes in the world. The indigenous changes in demographics like the decline in death rate and birth rate leading to rise in mature population is also an indirect result of globalization in most cases as the forces of globalization bring newer technologies and trends that aid in such phenomena. For example, the improved medical treatments and technologies based on research reach remote areas of the world and help improve the medical facilities in the region. This results in a general improvement in health and longevity of the local population. Trends like small families are a result of globalization in many families. The small families mean that the parents focus more on the children and in many cases pamper them and this brings in additional opportunity for the companies producing kids items like toys etc. in the region. Thus globalization is observed to fuel demographic changes and in turn business opportunity. References Brown, D 2000, Heinemann Business Studies for AS Level,http://books.google.co.in/books/about/Heinemann_Business_Studies_for_AS_Level.html?id=uyFDgGQi_jsCHeinemann. Baron R A and Shane S A 2007, Entrepreneurship: A Process Perspective, Cengage Learning. CSR Europe, 2012, Demographic change, . Kohlbacher, F 2010, Marketing and Innovation in the Aging Society,Springer. Kew J and Stredwick J 2005, Business environment: managing in a strategic context, CIPD Publishing. PWC, 2012, Managing tomorrows people: The future of work to 2020 < http://www.pwc.com/gx/en/managing-tomorrows-people/future-of-work/worlds.jhtml> Page, KL 2010, How Social and Demographic Change Influence Business The times 100 business case studies,2012, External environment theory, Read More