Pressures Faced by Businesses and Management

Question: Discuss about thePressures Faced by Businesses and Management. Answer: Introduction Organizations do not work in isolation. They interact with both internal and external environmental variables. Some environmental variables include technology, culture, political variables and legal factors, (Casadesus-Masanell Zhu, 2013). Organizational pressures can be categorized into three, market pressures, societal pressures, and technological pressures. Two of these pressures are discussed as follows: Market Pressures The market consists of many players. Some market participants include customers, competitors, and suppliers, (Naletlich, 2016). The market pressures are pressures that organizations may face in their attempts to gain a competitive advantage over their rivals. Organizations will always strive to not only keep their current clients but also attract new customers. The customers exert significant competitive pressures on the firm as they can always buy their goods from elsewhere, (Bombaridini Trebbi, 2012). In an open market where there are many buyers and many sellers, competition is a major determinant of success. The goods in these markets are also related. Hence there are a lot of substitutes, (Teeransirikool, Sienthgthai, Badir Charoenngam, 2013). Customers are, therefore, given a lot of alternatives from the market making them be able to shift quickly from purchasing from one company to another. The competitors are also great determinants of success of any business. In an open market, managers are always faced with an enormous challenge of competing with both local and international rivals, (Bombaridini Trebbi, 2012). Whenever companies are not able to bear the competition it is exposed to by the market, it may be thrown out of the market, (Bombaridini Trebbi, 2012). The managers are, therefore, pressured to devise policies that would enable them to gain customer loyalty for their products. Competition greatly relies on customer preference. If a firms products are preferred by clients, then the company may gain a competitive edge against their rivals in the market. Michael Porter outlined some factors that may make a firm to seek competitive advantage. They included the threat of entry of other companies, threat of development of alternative goods, the bargaining capability of clients and suppliers and competitive rivalry among groups, (E.Dobbs, 2014). The manager must, therefore, be aware of these factors and adjust to them appropriately to remain competitive. Technological Pressures. In the global business environment, there are a lot of technological improvements. Some of these improvements include internet marketing, social media marketing, and electronic transactions, (Garcia Colegrove, 2015). The manager must always scan the environment so as to identify any technological improvements that are relevant for the organization. Technology seeks to simplify the way business is carried out in the society, (Garcia Colegrove, 2015). Companies that use low technology in their operations may be slow and quickly thrown out of the market. Technological obsolescence is one of the leading causes of business failure. The managers are therefore pressured to come up with unique technology that other competitors do not have so as to compete favorably, (Garcia Colegrove, 2015). Innovation is a perfect way to adopting new technology. However, this may be an expensive process to managers. The company may also not be in a position to accept technological changes, making the manager to experience a lot of forces against change, from the employees. How the Manager can Alleviate the Pressures Innovation As explained by Naletelich (2016), innovation is the process of coming up with better ways of operation. It helps to solve some market-related constraints, and organization may be exposed to. Managers should always carry out a thorough environmental analysis to identify the major technological trends in the market, (Naletelich, 2016). This would enable them to determine the technological gap in the environment and fill it through innovation. Innovation is also closely linked to change. The managers should encourage creativity in the firm so as to come up with strategic changes that are technologically competent. Innovation enables firms to gain customers satisfaction. It may major on saving customers shopping time, reducing the time taken by clients in the queues before being served and coming up with unique products that have no substitutes in the market, (Garcia Colegrove, 2015). Innovation also weakens the tendency of companies to be outlaid from the market through the development of substitutes, bargaining power of suppliers and customers and new market entrants, as the company will be able to devise unique ways of operation. Formulating competitive strategies. Managers may weaken the market pressures by coming up with certain competitive strategies. Michael Porter outlined some competitive strategies. These plans included focus, differentiation and cost leadership, (Garcia Colegrove, 2015). A firm can adopt cost leadership as a way of gaining a competitive advantage against its market rivals. In this strategy, the company would sell its products at relatively lower prices than those of its competitors, (Magretta, 2013). This enables the low and middle-income families to be able to afford the goods, making them develop loyalty to the companys products. A company may also develop customer focus as a competitive strategy. In customer focus, the company practices an active market differentiation and then modifies its operations to suit a specific customer target, (Grundy, 2016). The manager may decide to focus on customer satisfaction. For low-income families, satisfaction is gained when the customers can purchase the products at lower prices and save for other purchases, (Magretta, 2013). The company may, therefore, aim at reducing the cost of its products so as to achieve customer satisfaction and loyalty. The company may also practice differentiation. In differentiation, the firm manipulates its goods and services so as to make them unique and different from the products from other businesses, (Grundy, 2016). This enables the firm to develop an efficient product positioning, as the customers will easily recognize the unique products in the market. Differentiation can also be achieved through branding, (Grundy, 2016). If a company develops a unique brand, then the clients will be able to separate this brand from other brands easily and purchase the goods provided by the corporation. Conclusion In this assignment, two pressures that an organization and the manager can be exposed to have been explained. These include market forces and technological pressures. The ways that can be utilized by the manager to weaken and solve these tensions have also been discussed. These include innovation and development of right, competitive strategies. References Bombardini, M., Trebbi, F. (2012). Competition and Political Organization: Together or Alone In Lobbying for Trade Policy? Journal of International Economics, 87(1), 18-26. Casadesus?Masanell, R., Zhu, F. (2013). Business Model Innovation and Competitive Imitation:The Case of Sponsor?Based Business Models. Strategic Management Journal, 34(4), 464- 482. E.Dobbs, M. (2014). Guidelines for Applying Porter's Five Forces Framework: A Set of IndustryAnalysis Templates. Competitiveness Review, 24(1), 32-45. Garcia, M. M., Colegrove, T. (2015). Introduction to Special Section: Considerations andPotential Impacts. Bulletin of the Association for Information Science Technology, 42(1),8-11. Doi:10.1002/Bul2.2015.1720420105 Grundy, T. (2006). Rethinking and Reinventing Michael Porter's Five Forces Model. Strategic Change, 15(5), 213-229. Doi:10.1002/Jsc.764 Magretta, J. (2013). Understanding Michael Porter: The Essential Guide to Competition and Strategy. Harvard Business Press. Naletelich, K. (2016). Consumer Perceived Dimensions of Organizational Creativity andInnovativeness. Ama Winter Educators' Conference Proceedings, 27g-21-G-23 Teeratansirikool, L., Siengthai, S., Badir, Y., Charoenngam, C. (2013). Competitive Strategies Firm Performance: The Mediating Role of Performance Measurement. International Journal of Productivity and Performance Management, 62(2), 168-184.