4.1.1 & 4.1.2 Business Change & Approaches to it

Business change

the adoption of a new idea or behaviour that results in a business operating in a different way

External environment reasons for change

• changing consumer tastes

• changes in law/legislation

• increased competition

Internal environment reasons for change

* Changing employee expectations

Approaches to business change

• Proactive

• Reactive

Proactive

They anticipate, initiate, and embrace change

Reactive

Only respond to change as it becomes necessary to do so

Advantage of proactive approach

Can gain competitor advantage by getting ahead of other companies

Disadvantage of proactive approach

Can be costly, no guarantee for success

Advantage of reactive approach

Spends money as needed, so less chance of wasting money

Disadvantage of reactive approach

Can all fall behind other companies whoo are being proactive

Why must change be embraced by a business?

• enhances a business’s competitiveness

• increases a business’s chance for survival

• improve productivity

• contribute positively to staff satisfaction and motivation

Kmart - need for change

2010:

• kmart struggling to differentiate from low-end stores

• lowered prices, simplified product ranges, and stocked more on trend pieces

• led to larger increase in sales and increased market share

• successful change