Remember for the exam:
Changes in Fashions and Trends
Businesses need to keep an eye of what is happening in terms of fashion and trends in the external environment. A trend is something popular at the moment that a business can look to capitalise on the current increased demand.
Businesses must adapt or respond to changing fashion and trends in the external environment.
What once was popular can go out of fashion and, if a business does not keep up with trends, it will probably go out of business.
Example: Music Industry
Tape > CD > Minidisk > MP3 > What next?
Why do we not need to store music physically now?
Online shopping at supermarkets and shops like Amazon and eBay rose by 125% during the coronavirus pandemic. How does this link to external influences and what impact does this have on businesses?
Products up to date/ new products released to extend Product lifecycle.
In addition to new technology, new competitors can emerge or existing competitors may update current products. This can again be demonstrated in the music industry. While Spotify disrupted the industry and was quick to market with Spotify Premium, Apple Music came onto the scene a bit later in 2015 followed by a quick succession of competitors.
Fashion
Fashion refers to current styles and preferences in clothing, accessories, and personal appearance that gain popularity in a specific period.
Impact on Businesses and Enterprise:
- Following Fashion Trends: Businesses that align their products with popular fashion trends can experience a surge in demand for relevant items. Increased sales of trendy products can lead to higher revenue and enhanced brand visibility.
- Ignoring Fashion Trends: Businesses that neglect evolving fashion trends might struggle to attract customers seeking the latest styles. Reduced demand for outdated products can lead to slower sales and potential inventory challenges.
Trends
Trends encompass massive shifts in consumer preferences and behaviours that influence various industries.
Impact on Businesses and Enterprise:
- Embracing Positive Trends: Businesses that align their offerings with positive social and cultural trends can gain a favourable reputation and customer loyalty. Increased customer loyalty can lead to repeat business, positive word-of-mouth, and potential growth.
- Neglecting Trends: Businesses that fail to adapt to emerging trends might lose relevance and customer interest. Decreased customer interest can lead to lower sales, reduced market share, and potential brand erosion.
