In the world of business, every generation of business owners has unique challenges. What do you think are the top business threats today? Recently the developed world has been living with a new normal since COVID-19, and organizations have prioritized the uptake of new technologies and digital transformation of business processes.
Technology is an opportunity however it is also still one of the top four business threats today. Plus, there are the political highs and lows, fluctuations in trading, the use of economic stimulus (money printing). How do you turn business threats into business opportunities? In this business blog, we look to find opportunities in the top 4 biggest threats to businesses:
- Globalization – what’s really going on?
- The Shifting Face of Labor – the future of work
- The Speed of Change
How do you know what are business threats?
Let’s begin with the methodology businesses use to strengths, weaknesses, opportunities and threats – the SWOT analysis.
At any given time, it is essential to understand the SWOT (strengths, weaknesses, opportunities and threats) to the company and industry so intelligent choices are made along the way. For example, a business will keep investing in additional staff or equipment if the timing is off. Plus, there may be an opportunity to release a new service or product due to increasing demand prompted by environmental, economic or political conditions.
Here are the top four most prominent threats to businesses today:
1 – Technology
The impact of new technologies can be a gamechanger or require minor adjustments. For example, ‘going digital’ or taking your business online will please many customers but not those adverse to change. These people are typically in the ‘laggards’ group of the technology adoption curve and are the last to switch to newer technologies.
Software and apps have increased efficiencies within the business and opened up the global economy as clothes are likely to have been made in more than one country.
COVID-19 looks at how quickly we have adapted to online collaboration tools for team and customer meetings and workflow management. Remote working is the new normal due to these new technologies which will only get smarter with AI, VR and NLP. Technology can provide opportunities as well as threats.
Many industries struggle directly or indirectly with the speed of technological change, and sometimes they can be replaced by startups providing a product or service which is far superior. For example, Uber and ride-sharing have disrupted the taxi industry, so traditional taxi firms slow to adapt have gone out of business.
One of the biggest dangers a business faces is believing that new entrants are not a real threat. Or that your systems are safe from hackers and cybercrime.
No website or network is safe, nor is it protected entirely from cyber criminals who are always one step ahead. How quickly you react to a perceived threat by applying security updates, changing passwords, antivirus protection, and so on can be the difference between being an easy target and being seen as a hard nut to crack.
There will always be the threat of cybercrime. The payout is too good, and hackers use innovative ways to get to your systems, including AI-assisted ransomware.
2 – Globalization
Each business is now competing in every market in the world. Again, this is a product of technology but has become a point of concern in and of itself. It is easier than ever to send work overseas, find products from other parts of the world, and communicate with potential partners in other countries. This all creates new challenges for businesses.
Due to international laws, a company may be limited in what they can do about some of these challenges, but that only means they need to be more creative in combatting them. For example, if your company’s product or service can be outsourced overseas at a much lower cost, you need to think about another way to make yourself more appealing at a higher price point. This is a challenge in a cost-obsessed environment but not impossible.
Taking your business local and appealing to local customers is one on-trend movement. Local SEO and marketing strategies are reversing the focus on ‘global’. For example, Google prioritizes local search results.
3 – The Shifting Face of Labor
Younger generations of the labor force have spent their entire lives in a world of massive connectivity so working remotely, online and using collaboration tools is their comfort zone. Older workers are more challenged with isolation, affecting their mental health.
For businesses, the threat is retaining staff and attracting new hires. For example, workers in the UK or Europe are remote working for businesses in Australia, the USA, Canada, and vice versa.
Suddenly there’s a massive pool of jobs and job applicants as we all become a global workforce.
4 – The Speed of Change
We touched on this topic earlier, and now we’re in the 5th industrial revolution. Changes are happening faster and on a much larger scale than ever before. This means that a business could shift in strategy today. That is the right decision, but they may need to move away from that strategy in a short time.
The level of flexibility that companies need is something relatively new. While it is essential to display a level of consistency so that consumers know what to expect, if a company allows that consistency to turn into stubborn continuity, there will be a price to pay.
These are only a few of the challenges that businesses face in the world today. There are, of course, many others, just as there are new ones right around the corner. In today’s fast-paced, globally-connected world, business executives need to be as vigilant as ever if they hope to be prepared to handle these challenges.