Business Challenges in the 20th Century Essay Example | Topics and Well Written Essays - 1250 words

Business Challenges in the 20th Century - Essay Example Companies are often channel their efforts in taking overcoming the threats while taking advantage of the opportunities present in their environment. Thus, the proper and thorough assessment of the challenges faced by business entities should start with an adequate audit on their environment. This paper will look at three major challenges faced by business organization. It will accomplish this t ask by making a general assessment of the current business landscape. The paragraph that follows will be a glance at the business arena. This will be followed by the specific issues and challenges revealed and how they can be properly addressed. According to Philip Kotler (2005), one of the "megatrends" which is needed to be considered by business organizations is a major economic force called hypercompetition, which is characterized as "a period where the rate of change in the competitive rules of the game are in such flux that only the most adaptive, fleet, and nimble organizations survive (D'Aveni 1994)." It is irrefutable that this trend is one of the most important factor affecting the performance and strategies of business entities. As they operate in a hypercompetitive environment, they need to cope with its various features such as more intense rivalry, higher buyer leverage, and integration of international market. These three major challenges are further examined in the following sections. Challenge 1. More Intense Rivalry As more and more players recognize that potential markets with high profit gains and acquire technologies for an efficient operation, they intensify their efforts to conquer their target markets. It is apparent how business organizations are currently battling head on for higher market shares. More efficient technology in firms' value chains enable them to drive down prices. Aside from price wars, companies also compete on the quality and features of their specific products. As the world is becoming a global village, this situation is even exacerbated by the threat of competition from foreign firms. More in tense rivalry is becoming a major concern among competing industry players. Higher competition forces firms to develop a more efficient business model and strategy. Sometimes, these may even lead to the failure and bankruptcy of a firm. Higher competition tends to shake off inefficient players leaving only those with sustainable competitive strategies. In the face of more intense rivalry, industry players need to focus on crafting a strategy which will mitigate competition with other companies. It is also important that a firm embark on a stronger effort of defining and enhancing its position in the particular market. For example, a hotel company can further realign its strategy with its goal by looking at what it wants to achieve. The company can pursue a differentiation strategy to differentiate itself from its rivals. It is irrefutable that even though two companies offer the same product, customers often perceive huge differences in the way the companies craft their marketing mix. A hotel company can either focus on offering low priced and convenient accommodation or may opt to adopt a strategy of charging prices justified by excellent customer service. It should also be noted that warding