Global Trends That Are Shaping the Business World - Literature review Example

Literature Review Name Class Unit Part 1 Summary Ernst and young The report by Ernst and Young (2010) looks at the six global trends that are shaping the business world. The report looks at the long term developments that are shaping the world. The trends looked at the report are; emerging markets increase their global power, cleantech becomes a competitive advantage, global banking seeks recovery through transformation, governments enhance ties with the private sector, rapid technology innovation creates a smart, mobile world and demographic shifts transforms the global workforce. The report asserts that the global economies are highly interconnected which have led to the governments and industries cooperating in ways which could not have been imagined years ago (Ernst and Young, 2010). The report cites that the six trends are interconnected by three drivers which are; demographic shifts, reshaped global power structure and disruptive innovation. Due to the impacts of the trends on the way in which business operates, there will be winners and losers. The article gives ways in which the winners can be spotted. The winners will be constantly monitoring broad trends which are in internal and external environment. They are outward looking organisations who have great jurisdiction and regulatory frameworks which helps in adapting to the local environment and coming up with a global workforce. The winning organisations are modifying their supply chains making them to be part of their future strategy (Ernst and Young, 2010). The article suggests that as the business and governments look into the future, they have to know that their current strategy cannot be enough. Business has to look at more opportunities and risks which are brought about by the evolving trends. They are supposed to re-imagine what is possible and determining what they can do best. Businesses which are able to succeed find themselves navigating tomorrow trends and also being part of shaping them (Ernst and Young, 2010). Authors’ point of view From the authors point of view, the six trends will determine the way in which business operates, grow and compete. The authors view the trends as the main determinants of winners and losers in the business world. The author sees that in the future, current business strategies may not be adequate enough. The authors see that with a different mindset, it is possible for the business to re-imagine what is possible and determine new things and the best way to do them. According to the author, winners will be able to navigate tomorrow trends and also shape them. Part 2 Cassandra: The World in 2014 A top ten for business leaders The article outlines 10 trends that business leaders have to look at in 2013. The article asserts that there will be a redistribution of social power globally. The traditional institutions that have not been able to deliver progress will lose their powers according to the article. This power will flow towards communities and individual as well as business. The author claims that companies that are not able to read the future are bound to follow. The article acknowledges that social technologies have become part of our daily life and work. The article sees the role of the social generation in enabling business to deliver value to customers. This is through acknowledging that mobility and connectivity as part of future business. The second trend is redefining value; the consumer is winning the fight to own the new consumer. According to this trend, the consumers have choice. There will be more demand for shared values between consumers and business. The third trend is distributed everything. The article sees that mobility is entering a new stage. According to this trend, small scale production will reshape production and consumption can occur at any place (Malnight & Keys, 2012). The fourth trend is the next industrial revolution. The trend asserts that smart technologies will reshape the society. The trend looks at the way in which smart machines and robots will replace human. The main challenge that this trend will present is coming up with a skilled workforce that is capable of handling them (Malnight & Keys, 2012). The fifth trend is the new space race. According to the article, space programs will lead to commercial space travel. This will also lead to space competition over ownership. The sixth trend is the geopolitical wars. This involves a fight on future control. The article claims that radical political shifts at home and between nations are rising. The seventh trend is the resource wars escalating. The article claims that the increasing population will lead to pressure on resources which will be made worse by climate change. The article points out that by 2030, the resources demanded will be twice what the world can supply. The eighth trend is business stepping up. Business is expected to step into new roles which will enable them to tackle social and economic challenges. The ninth trend looks at information as power. According to the article, knowledge and information will be the new source of competitive advantage. There are also security challenges that have to be addressed. The last trend is the changing shape of the financial system. The article sees a situation where the banks will be the key players (Malnight & Keys, 2012). Author point of view The author asserts that the dispersion of the power will be a source of great challenges and opportunities. The article argues that are the business must be ready to take the challenge. The author views that the power will shift from the traditional institutions towards individuals and governments. The author sees the future as uncertain and unstable with indicators such as shifting climate patterns, social unrest, inequality, unemployment, institutional failure and more. The authors see a situation where companies will continue to fail if they misread the future. Part 3 Summary Forbes magazines The article looks at the ten emerging trends in the business. The trends are a new type of business ecosystem, emerging ways to scale business, emergence of different type of leader, the growth of middle class, global division of labour, universal connector, business platform, cloud infrastructure and externalising of the talent. Apple and Amazon among others have been able to cast new form of business through the use of the trends. According to the article, there are five pillars on elastic enterprise which determine the success of companies that migrate to them fast and in a competent manner (Shaunessy, 2011). The article sees that of the ten trends, five are very significant. Radical adjacency moves are associated with five important trends identified. This is defined as a market move or acquisition where the buyer or executing company is taken into space where they have little or no experience. The five pillars according to the article are; platforms for high scaled business interactions, management of business ecosystem, use of universal connectors such as RSS and APIs, use of cloud infrastructure and new form of leadership (Shaunessy, 2011). Author viewpoint The author views the ten trends as the means in which companies are able to cast a wholly new form of business. The main argument by the authors is that there exist five pillars associated with elastic enterprise. The author argues that companies which are capable of migrating to these pillars in a fast and efficient manner are able to gain great results in the troubled economy. The author also argues that innovation does not always explain success. He sees that innovation is overblown and stresses the importance of radical adjacency (Shaunessy, 2011). Part 4 The story of Zara The article explains how Zara has become the best known fashion brand. The article gives a brief history of the company since inception in 1963 to become the world fastest growing affordable fashion by 2005. The article asserts that Zara gives insights on the way in which break through can be gained using strategy. The business has been able to identify the differences that customers want and also been able to differentiate themselves from the competitors. For the competitors, it is hard to imitate Zara or achieve its positioning. The article asserts that Zara has been able to achieve a level of uniqueness that is hard to imitate. To find a breakthrough in the clothing market, capturing the elusive consumer have been very vital for Zara. The article claims that Zara has used clear focus and vision to tap power of fashion. The shortening of the conventional supply chain response has helped Zara in fast response. The visits to Zara are higher than the competitor’s. The article asserts that Zara depends on empowered retail managers who provides word of mouth and does not fully rely on electronic data as the competitor’s. The article claims that Zara was able to invest in information technology which has helped them in communication. Compared to the competitors who spend a lot of their revenue in advertising, Zara uses 0.3% of their sales in advertising. According to the article, eliminating bottlenecks is the main drive to speed. The areas identified as bottlenecks are; dying and sewing of which Zara controls. Zara also outsources production in countries which are close to Spain. Zara is also known for delaying design decisions with an aim of reacting to the consumers demand. The company uses creative teams instead of a group of designers. The designers are expected to speed up the development process so that the numbers of samples are minimized. The article cites that the company uses young designers who are trained to make fast decisions. The article asserts that the designers are trained to reduce the number of views and changes. This helps to speed the product development and reduce samples made. The article asserts that this has helped Zara to reduce the failure of new products to 1%. This percentage according to the article is lower than the industry average, which is 10%. Author point of view The author argues that fine tuning of the supply chain is a necessity as proved by Zara. The author views that having an elaborated supply chain management as in the case of Zara can provide a business with sustainable competitive differentiation and positioning. They also see this as a means of increasing output, decrease inventories as well as operating expenses. According to the authors, this is a strategic trend. Part 5 Summary Five themes shaping the global business environment The article has identified five trends that modern business requires for them to succeed. The first trends are the power shift in the locus of power from north to south. This involves shifting of power from the developed countries to the developing countries. There has been a shift with most global countries targeting the developing countries. The second trend is a new model of consumers’ engagement. According to the article companies have been forced to redefine the ways in which they engage with consumers. The third trend according to the article is new paradigms, changing business models and constant innovation. The consumer taste and preferences have been changing at a fast pace which have led to faster product design. The fourth trend is redefinition of social contract. The article asserts that there has been an increase in demand from the citizens to the government. The last trend is a global war for talent. Talent have been increasingly located in the developing markets both in skills and numbers (Paul, 2012). Author viewpoint The author points out that the world is in a constant change and the shifting dynamics can impact the business corporate strategy. The author argues that the trends require business to focus on a bigger picture. The author cites that business leaders have to understand the trends in order to succeed. Conclusion All articles point out on the changing business world through the emerging trends. Business has to be able to adopt new trends that will enable them to achieve a competitive advantage. According to the articles, business that fails to adopt the emerging trends is bound to lose. Zara serves as an example of a company that have been able to move with the changing trends and thus have attained a competitive advantage. The dispersion of economic powers presents business with challenges and opportunities. The business is thus supposed to be ready to take advantage of the trends. References Ernst and Young 2010, “Six Global Trends Shaping the Business World”, Ernst and Young Insight Report, 2010, Retrieved 18th December 2014 from, http://www.ey.com/GL/en/Issues/Business-environment/Six-global-trends-shaping-the- business-world Malnight, T & Keys,T 2012, “Cassandra The World in 2014, Global trends for 2013 A top ten for business leaders, Global trends for 2013: A top ten for business leaders”, The Economist, Retrived 18th December 2014 from, http://www.economist.com/node/21567244/print Paul, A 2012, “Five Themes Shaping the Global Business Environment”, ATkearney, Retrived 18th December 2014 from, http://www.atkearney.com/documents/10192/421091/Five_Themes_Shaping_the_Global _Business_Environment.pdf/53e0d01d-97a1-46e8-8182-a7b002497698 Pearson, A. (n.d), The Story of Zara –the Speeding Bullet How a Business can Achieve Sustainable Competitive Differentiation and Positioning: The Strategist’s Choice, Unique Business Strategies, Retrieved 18th December 2014 from, http://www.uniquebusinessstrategies.co.uk/pdfs/case%20studies/zarathespeedingbullet.pd f Shaunessy, H. 22nd September 2011, “The 10 Most Important Trends in Business”, Forbes Magazine, Retrieved on 18th December 2014 from, http://www.forbes.com/sites/haydnshaughnessy/2011/09/22/the-10-most-important- trends-in-business/2/ Read More