Businesses are not in a vacuum or alone, always related to the environment. The environment is rapidly changing and has an impact on the level of relevance of a business with markets and government, socio-cultural and economic regulations. Business adjustments are needed for the situation so that business presence is important for the market, which is served by the business. Ignoring the environmental situation will have an impact on business relevance for the environment. Business becomes less important for the environment, including the market and ultimately its existence is difficult to maintain. Demand decreases or disappears. There are no sales transactions. Without it the business in the end can’t survive.
The environment that mention here is the environment related to business. The examples are market situation, industrial situation, macro economy and key changes that include technology, government regulation, purchasing power, social and culture.
One environmental situation that has a strong influence on business is the market and industrial situation. The market situation is like developing and shrinking market segments, shifting market segment spending patterns, changing their demand for a product. While industry is closely related to competitors, the development of material providers, the emergence of substitute products and so on.
Comparing the environment with business gives insight into strengths, weaknesses, opportunities and threats (SWOT or TOWS Analysis). What is the environmental side that poses a threat (threat), what side of the environment that provides opportunities? Insights about TOWS encourage businesses to adapt or business strategies. Business strategy composes a business plan by weighing threats, opportunities, strengths and weaknesses. The strategy uses power to take advantage of opportunities. If for threats, if it can’t be dealt with, just avoid it.
What is the situation of the business environment in this early millennium era. Because the scope of the business environment is wide and diverse in each industry and business, the key trends will be discussed in this article. It include technological, social and economic innovation.
Often the technology is identical to the engine. Though not necessarily. Technology comes from Greek words, techne and logia, Techne means hand skills, art, expertise. Logia mean science or study. The meaning of the term technology is a set of tools, modification of objects, ways, skills, methods and processes used to create goods and services or complete a task. If a tool actually hinders doing a task even though it is more complicated, it means that the tool does not reach its destination.
The simplest technology is stone in the prehistoric era. The stone has been modified more pointedly, and the longer people make it more smooth and nice. Modification of natural objects has a purpose. According to archaeologists, the modified stone is useful for cutting, hitting, carving, tools that relieve human tasks.
In the current development, technology can actually incriminate humans in carrying out their duties. Cars help people to move from one place to another, but in a city, cars can make it difficult for people to move because of traffic. Email is one of the technologies for communicating, but it can also happen that electronic messages enter too much in e-mail, so unnecessary letters hoard important letters. As a result, e-mail does not function optimally as a communication channel.
This shows that the tool was originally intended to alleviate human work, then it could also happen to incriminate humans, so that a tool is needed for renewal. Email on Gmail, for example, can now recognize spam and also categorize which messages are urgent and important and which can be delayed and less important.
Technology and Business
Technology is developing. The development can be renewal or improvement; it can also be a replacement. New technology replaces old technology. Paper mail delivery is replaced by electronic mail. Bank transfers replace postal money orders. Telegram letter is replaced by SMS.
Business related to technology. There is technology involved in the process of producing goods and services. There are technologies that become products that businesses produce. Examples of technologies involved in manufacturing products, for example sewing machines in the clothing business. While the business example that produces, technology is the sewing machine business. They sell the sewing machine.
Thus, technology is very large in relation to technology. When there is a substantial adoption of new technology in the community and replaces old technology, businesses that are associated with old technology may become obsolete. For example, when Android smart phone technology is increasingly being used and favored by GSM phones, the GSM phone business is naturally affected. This is what Nokia experienced. Nokia’s turnover dropped not because it was less well known and less well managed, but because there was a GSM cell phone replacement product that was preferred over Nokia products.
For businesses that do not sell technology, they can also be affected by technological shifts. Motorcycle public transportation services do not sell technology, but are affected by technology. The emergence of IT-based businesses such as go-to, grab eroded the previous motorcycle taxi business. With the mobile application going away, motorcycle taxi drivers do not need to wait for passengers at motorcycle taxi posts. He can wait at home or anywhere. So that the time and energy resources they spend on this business are more economical. Furthermore, online motorbikes are able to offer a much cheaper price, because the cost components are decreasing.
The markets of old model businesses are disrupted by substitutes for new business models that are often much cheaper and / or better. These are the symptoms popularized by Rhenald Kasali as a symptom of disruption. The term was coined by Clayton M. Christensen and Joseph Bower in the article “Disruptive Technologies: Catching the Wave” in the Harvard Business Review journal (1995). Disruption literally means disturbing. Disruption in business terms has connotation meaning about the word disruptive innovation. Disruptive innovation is a finding that helps entrepreneurs find new market opportunities, while disrupting or damaging existing markets. In disruption, a new finding replaces the old ways, so that old ways are no longer needed. Disruptive innovation creates products or services that surprise the market. Shocking can be a cheaper price, or finding a new and different type of consumer.