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The Top 4 Biggest Threats To Businesses Today

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In the world of business, every generation has unique challenges. Technology is responsible for most of the change as new products and systems disrupt the status quo.

We’re living with a ‘new normal’ since COVID-19, and while we are more reliant on technology now, it’s also considered one of businesses biggest threats. There are other business threats, including political highs and lows, fluctuations in trading, and the use of economic stimulus.

In this article, we consider four threats to businesses coping with change.

SWOT

At any given time, it is essential to understand the SWOT (strengths, weaknesses, opportunities and threats) to the company and industry so smart choices are made along the way. For example, a business will hold off 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 they are the last to switch to newer technologies.

Software and apps have increased efficiencies within the business and opened up the global economy as the 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 believes 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 cybercriminals 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. This, again, is a product of technology but has also become a point for 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 movement that is on-trend.  Local SEO and local 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, and it’s affecting their mental health.

For businesses, the threat is retaining staff as well as attracting new hires. For example, workers in the UK or Europe are taking up roles remotely working for businesses located in Australia, the USA, Canada, and vice versa.

Suddenly there’s a huge 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 they have ever occurred 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.

Staying Vigilant

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.

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