Regardless of their industry, size or location, companies today face five critical business challenges. Collectively, these challenges require organizations to build new capabilities.
1. Globalization
Demand to think “globally and act locally” is increasing significantly. The imperative requires organizations to move people, ideas, products and information around the world to meet local needs. They must add new and important ingredients (volatile political situations, contentious global trade issues, fluctuating exchange rates, and unfamiliar cultures) to the mix when making strategy. They must be more literate in the ways of international customers, commerce, and competition than ever before.
2. Profitability through Growth:
Profitability can be achieved through (1) Cost cutting and (2) revenue growth. Executives will now have to pay attention to Profitability through revenue growth because sufficient attention has already paid for profitability through cost cutting.
3. Technology:
From video conferencing to the Internet, technology has made out world smaller and faster. The challenge for managers is to make sense and good use of what technology offers. Not all technology adds value. In the coming years, managers will need to figure out how to make technology a viable, productive part of the work setting.
4. Intellectual Capital:
Knowledge has become a competitive advantage. From now on, successful companies will be the ones that are the most adept at attracting, developing, and retaining individuals who can drive a global organization.
5. Change, Change and More Change:
Greatest competitive challenge companies face is adjusting to – indeed, embracing – nonstop change. Constant change means organizations must create a healthy discomfort with the status quo, an ability to detect emerging trends quicker than the competition, an ability to make rapid decisions, and the agility to seek new ways of doing business.
Organizations need to thrive, in other words, a never-ending state of transformation, creating fundamental, enduring change.
You must have traditional forms of competitiveness-cost, technology, distribution, manufacturing, and product features to be player in the market. But to guarantee that you become winner, you must have above five capabilities.