Organizations Adapting to the Changing Business Environment

Published by MBA Skool Team, Published on September 13, 2015

“The only thing that is constant in this world is change.” The same thing goes with the corporate world as well. Today the face of the corporate world is changing at an unprecedented. Major changes we have seen is the rise of the e-commerce sector, start-up culture, established brick and mortar companies changing their model to brick and click structure. The top management of all the organizations have realized that if they don’t change with time then they may soon become obsolete. We have seen what happened with the organizations like Nokia who refused to change and didn’t come up with touch interface.

As a result now they are nowhere in the market. Same thing happened with the social networking website Orkut. They came up with a block buster product but then stopped innovating. On the other hand the Facebook, Orkut’s nearest competitor, kept on working and innovating and hence acquired the user group of Orkut as well.

Image: pixabay

Organizations have realized this and they have started changing with time. Let us analyze what they are

FMCGs: - 90% of the new products fail in the market in this sector. So it involves great efforts to make the product successful. Also the companies cannot rely on their blockbuster product for too long. We have seen that Kurkure (a product of PepsiCo) have been very popular from the beginning and still it is going strong. The secret of their success is that they have been coming up with new variants at regular intervals. The latest addition is their “Masala Kurkure” variant. Same is the case with soap products as well. Companies keep coming up with new variants to stay relevant in the market. Also they have started involving the customers while developing the new products to get an idea of the changing taste of the consumers. This also results in creating a buzz about the product.

FMCDs:- Initially consumer goods firm focused on the products itself. Now the companies have realized that customers do expect the post service after purchasing the expensive products. So they have started providing the complete solution to a problem rather than just the product. The owners of the juicer and mixers expect the company to provide a free repair for the first few times. Same we can understand with the help of water purifier. Initially the companies used to proclaim themselves as the manufacturer of the water purifier apparatus. Now days they want to solve each and every problem of the customer related to water cleaning, be it for kitchen use, laundry use. Companies have realised that they have covered the customer base as of now and the revenue lies in fulfilling the needs of the present customers. The terms like “Gold at the bottom of the pyramid” while mentioning the consumer goods make sense but when it comes to the consumer durables then at that point not much of the revenue is flowing through the rural region. The metros markets are saturated for most of the products and hence the source of revenue generation lies either in the repeat purchase of the product or the services market.

Automobiles:-Also this is true for the automobile industries as well. Companies like General Motors focus have started focusing on the distance an average person drives his car. In US it comes out to be around 1 lakh kilometres. Now for these one lakh kilometres the customer would require not only his cars but also other products like wheels for the vehicles, seat covers that need to be changed from time to time, regular car washes, complete services of the cars. Other automobile equipment also keeps on changing from time to time. Companies like General Motors have realized the opportunity here and they are now planning to cover these one lakh kilometres rather than focusing on the types of cars he is going to buy. So they are ready with their cars, pre car services like arranging for the loans, arranging for the insurance, post selling services like car wash, equipment replacement and many such opportunities. So here clearly one thing is visible that automobile companies are the pioneers of turning themselves into complete problem solution providers. There are many advantages for the same. First is the convenience of the customers as he is getting everything at one place which will ultimately improve the customer experience. Second is that it is providing an opportunity to the companies to gauge the interest of the companies and update themselves as per the changing needs of the computers.

IT Industry :- Many of the experts will admit that fastest changing sector in the corporate world is the IT services sectors. For more than one decade IT sector has worked as the support system for other organizations like the banks, hospitals, hotels, pharmaceutical firms. They have been managing their backend jobs like that of managing their database, providing them the software for various day to day operational activities and many other such tasks. Till now it has been complete dependence on the man power. The IT companies have been charging their clients based on the number of persons working on the project. So it has been more of the day to day mundane work for the employees as most of the time they are not aware why even they are performing a task and what it has to do with the impact on the customers. This has resulted in the dissatisfaction among the employees and they have started moving towards other jobs where they can utilize their talent. Companies like Infosys have realized this and they have started coming up with solutions which are more based on innovation rather than mere backend jobs. This industry is moving towards automation which will result in the decrease in the head count of the employees in the industry. However this only will lead to the improvement in the quality of work that the employees are doing and more satisfaction to the employees. So it is quite apparent that they are transforming themselves from just being IT solution providers to the company which will act as an IT consultant where they will not only identify the problems but also present a slew of innovative options for solving the problem.

This article has been authored by Tarun Sharma from IIM Kashipur

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