A new study has highlighted how businesses can use disruptive, external changes, such as the COVID-19 pandemic to their advantage
Changes in the external environment always have an impact on the success of companies and may even tilt previously valid laws of business off balance.
Jan Recker, Chair for Information Systems and Systems Development at the University of Cologne’s Faculty of Management, Economics, and Social Sciences, has published a study in Academy of Management Perspectives, which explains how businesses can use this change in the external environment to create a better business strategy.
Recker explained: “If you want to survive in a post-COVID-19 world, you should pause and question your current strategy.
“Every crisis leads to change. But that also means that crises can lead to new, even better business strategies.”
The market is no stranger to disruption
The global financial crisis of 2008 is often seen as a bad time for businesses; however, the event gave rise to start-ups such as Airbnb and Uber.
Previously, private individuals had had reservations about letting strangers into their own cars or homes, but in view of the financial bottlenecks caused by the crisis, these business models became accepted and successful.
Another example of huge disruptions in the market-leading to business success is the temperance movement in the USA in the 1920s, which proved successful for soft drink giants such as Pepsi and Coca-Cola.
It may be a matter of time before we see the new startups that have used the current COVID-19 pandemic as an advantage to their business model.
Recker added: “Understanding the changes that are taking place, how they affect companies and what can be done about them, is not only crucial for companies to survive this change but can also be turned into a benefit.
“In the current situation, however, most companies look for temporary interim solutions until they can return to ‘normal operations’. However, whether there will ever be a return and what our new normality will be cannot be predicted. Good business models have to be able to adapt.”
The paper describes several external factors, such as changes in the socio-cultural, economic, political, or ecological environment, as well as the COVID-19 pandemic and how they affect the success of business and entrepreneurship.
“Looking back, we can clearly see one thing,” Recker said.
“History repeats itself. And we can learn from it.”
Editor's Recommended Articles
Must Read >> Why remote learning can power your business
Must Read >> How can your business adapt to a post-COVID world?