The business world is like the world as a whole -- it never stands still. In truth, the business world is changing every second, affected by shifts in all aspects of human life. Reacting to this change is one of the chief responsibilities of an effective chief executive, who must steer his business in line with shifting trends. To do this, the manager must identify in what sectors these changes usually occur.
One of the most dramatic changes to the business landscape is the technology that is available to businesses. This includes changes in the technology used in the products and services offered by a business, as well as changes in the technology used to produce and distribute these products. For example, from 1990 to 2010, the Internet went from being almost nonexistent to ubiquitous, revolutionizing the ways in which companies communicated and developed and sold their products.
Supply and Demand
Over time, the supply and demand of a particular product will shift, because of a number of external factors. For example, while in 1980 there was little demand in China for Western products, by 2010, because of increased prosperity and liberalized trade laws, demand shot up. Responding to these changes in demand, producers often shift the supply of a particular product. A smart company is constantly looking at the supply and demand of the products it offers.
Running a business is like playing a game where the rules keep changing -- and so do your opponents. As time goes on, different competitors enter a market, offering new products and services at different prices. These new entrants cause the distribution of consumers within a certain market to shift. Players in these markets constantly shift their own strategies to react to the moves of competitors, so that change in the market becomes almost incessant.
One of the less obvious changes in business are shifts in the labor market. As with products, the labor market responds to its own forces of supply and demand. Over time, the amount of people who hold a particular skill shifts. This shift in the supply of labor affects the compensation afforded that skill holder. This change in compensation in turn affects the number of positions available to these skill holders.