Changing business models in line with new trends

The depreciating value of crude oil and devaluation of the country’s currency have increased the drive to diversify the economy and more businesses are focusing on investments in the non-oil sector.

ADVERTISEMENT

The services, telecommunications, agriculture and the manufacturing sectors have been contributing significantly to the Gross Domestic Product in recent times and experts have called for more investment in these areas.

The new development in the business environment has also placed in the country in a position that it has to compete with other African countries and the rest of the world.

As the business environment is changing, experts suggests that strategies used in production and delivery of products and services need to be improved to meet the quality requirements in the domestic market and other countries.

They however point out that the unstable economy and the inflation in the country call for change in lifestyle and the production of more affordable products.

The newly approved Economic Community of West African States Common External Tariff and the removal of textiles and furniture items from the import prohibition list will also expose Nigerian businesses to stiff competition with imported products.

Business opportunities in the emerging market

A PricewaterhouseCooper report stated that the business environment has changed significantly in the last decade and is set to change further in the coming years, driven by six groups of inter-connected forces for change.

It says global economic shifts have become a norm in which the rate of economic activities have slowed and will become more volatile but that looking forward, steady, stable growth will be more precious.

The report titled, ‘Measuring and managing total impact: A new language for business decisions,’ notes that the economic balance of power is also shifting and is set to shift further towards emerging economies, adding that by 2050, it is projected that seven of the world’s largest 13 economies will be emerging compared with four currently.

“Competitive advantage based on access to cheap labour and materials will become a thing of the past: instead, the global battle for talent and access to knowledge will increasingly be the basis for competition,” it states.

Business models to encourage women inclusion

Due to the social exclusive of women in the country, more government initiatives are designed with special focus on women especially women entrepreneurs.

Experts not that business models in the country are gradually changing to more sustainable ones that give inclusion to the lower and middle class as well as the Small and Medium Enterprises in order to help them survive in the competitive business environment.

The Principal Consultant, Experiential Consult Limited, Mrs. Aderoju Odunsi, notes that in order to promote gender equality, some intervention programmes by the Federal Government, which provides funds to support SMEs, have given the first consideration to women in agribusinesses.

Odunsi adds that modern business opportunities in the agricultural value chain are being taken up by women and this has prompted other corporate organisations to support women enterprises as part of their business strategy.

Technology and Internet penetration

The PwC report says that internet penetration and advances in technology have extensive impact in the business environment because they allow businesses to have direct access to consumers and open up markets to new businesses.

It adds that IT allows businesses, consumers and communities to assemble almost instantaneously to influence or create alternatives to traditional business, government and community structures.

According to the report, adopting IT will disrupt the established rules of competition by enabling small businesses to compete with larger ones and reducing the costs of production and services.

On the other hand, it says, “The power of the Internet and social media have heightened transparency by enhancing the availability of complex information; the impact of any business lapses can quickly escalate and be very difficult to contain.”

Expertise in business will be in demand

The report says that evidence in the business environment suggests that values are shifting to focus more on experiences, relationships and meaning rather than material gain, stating that these shifts will have an important bearing on business.

For example, it notes that people are becoming increasingly aware of the limitations and threats posed by conventional economic growth which may make consumers to be more environmentally and socially conscious, especially younger ones.

“They want to know more than ever about the products and services they use and who they buy them from. At the same time, trust in business has been declining,” it adds.

Accountability is prominent

The PwC report adds that stakeholders, other than shareholders, are having an increasing influence over business and are demanding more and better information as they pursue higher standards of responsibility and accountability from businesses.

It says the high-profile controversies over some businesses’ tax affairs, environmental practices and working conditions highlight the need for greater openness and, as a consequence, the need for businesses to behave responsibly.

The growth of the sharing economy and collaborative consumption looks set to continue – value networks are replacing value chains and consumers, it notes.

New opportunities and threats

For business, the report states that the changing landscape and the search for ‘good growth’ present both opportunities and threats as stakeholders bring their growing influence to bear, affecting diverse aspects of the business.

It says, “Opportunities come from rapid growth in the emerging economies but new sources of competition are potential threats.

“Changing customer needs in both existing and new markets offer scope for revenue growth, but revenue is at risk for those businesses which fail to keep in touch with their customers’ shifting values.”

Copyright PUNCH.