“How do you understand the business or business opportunities that can be generated from the surrounding environment?”
Today we answered your question:
How do you understand the business or business opportunities that can be generated from the surrounding environment?”
Intimately knowing the individual business and the environment within which it operates, both globally and locally, combined are essential to identifying ‘good fit’ opportunities that will strengthen and drive the business forward.
The surrounding environment comprises of PESTLE or STEEPLE, that is the politics, economy, social, technologies, legislation, environment, ethics. Researching this environment regularly highlights potential business opportunities.
Knowing the specific business comes from having clearly defined business capabilities as strengths and weaknesses, which highlight which opportunities would strengthen the business and overcome weaknesses.
Wherever you turn today business owners, leaders, social media channels, books, blogs, and entrepreneurs talk about business models. It is a trendy term thrown around by so many and to such an extent that the power of a business model seems forgotten.
As a reminder, we ask and answer, four questions here. What is a business model? What does a business model look like? Why are business models so popular today? Why every business, regardless of type, size, age, wealth, or industry, needs at least one.
To succeed in any business environment a business requires both core and dynamic capabilities. Our focus here are dynamic capabilities, the ability to learn, apply the learning skilfully to adapt quickly.
Dynamic capabilities are necessary because the business environment is never static, it changes constantly, so a business needs to adapt with it. I like to use the athletics race analogy. Imagine a 100 metre race. A runner bursts off the start line as the gun goes off, immediately striking and maintaining a steady, strong pace, never changing, even when competitors pass by on the track. Who will get to the finish line first? Like the runner, without adaption the business becomes stagnant, and competitors who are adapting, pass by reaching the customer first.
From a technology and innovation perspective, the need for adaptability stems from technology advancements. In today’s environment advancements occur every 18 months. Advancements mean a new set of competitors offering new, more convenient, more enticing and exciting ways to interest a finite number of customers. New technologies have removed geographical borders, so competitors are global, and therefore, are unknown, compared to previous years where competitors where more local, easier to recognise and keep an eye on. As Jack Welch, retired CEO for General Electric, said “ An organisation’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage".
So getting ahead, and staying ahead, of the competition requires, robust competitor and business environment research that informs a good strategy, and which dynamic capabilities to develop. Here are 3 common dynamic capabilities using Zoom under COVID as an example where a thorough simple STEEPLE/PESTLE analysis can help identify changes and new opportunities.
1.Business contextual factors
Zoom has flourished due to the global need for video conferencing for communication. https://www.theguardian.com/technology/2020/jun/03/zoom-booms-as-teleconferencing-company-profits-from-coronavirus-crisis
Zoom application and infrastructure was in place when the world needed it, was easy to set up and use, and low cost. Entrepreneurs recognising the trend early have developed alternative applications that offer all the things Zoom doesn’t offer. Megatrends can also help identify ‘sub’ trends sprouting from the megatrend. For example, online video teaching, though around for quite a few years already, has exploded recently.
In both the examples above businesses have used technologies to grasp opportunities in delivering a service to satisfy the demand of the consumer.
Develop the capability to stay up to date, and recognise changes, in these 3 dynamic areas, then apply your findings to your advantage, to get ahead, and stay ahead, of your competitors.