Definition of Business Pressure
A business environment consists of a number of economic, physical, legal, social, and political factors.
These varying numbers of factors affect the activities of the business to a greater extent.
If there is a significant factor in any of these factors, they impact structure of the business to a greater extent.
A change in these factors causes pressure in the organizational environment.
Presently, there are three types of business pressure faced by the business in the market.
They include societal pressures, technology, and the market. These business pressures are hereunder:
- Pressures of the Market:There are multiple factors that create pressure in the market. For instance, strong competition, the global economy, and the changing nature of the workforce cause pressure in the business. Also, when demands and expectations of powerful and impactful customers increase, the market faces business pressure.
- The pressure of Technology:Technology is also evolving everyday. Innovation and creativity, occurring within the technology, is also causing pressure in the market. Obsolescence is a practice in which businesses manufacture products that expire within a certain period. Thus, businesses profit from sales of their product now and then. Obsolescence creates a lot of pressure on the market.
- Social, Political, and Legal Pressure:Social responsibility also causes great pressure in the market. Government regulates the social, legal and political aspects of society.These laws are the norms of the society that every person follows. When any part of society experiences radical change, it can be either positive or negative.
When change is negative, it attacks the values and mores of a society.
The business environment faces pressure when the government protects society against terrorist attacks and ethical issues.
Thus, social, political, and legal aspects of society create pressure in the market.
How Do Organizations Respond to the Business Pressures in the Market?
Whenever the market or business environment faces pressure, organizations do their best to stay in the market.
They take certain steps to have an advantage over others. Here is how organizations respond to business pressures occurring in the market:
1. Competitive Advantage
Competitive advantage is an advantage that puts a business over another business.
A business avails advantage over another business in some measure such as speed, control, or quality.
When an organization avails a competitive advantage over other businesses, a business gets to have a larger than average competitive advantage.
A competitive advantage can be availed by implementing strategic goals.
It helps organizations in implementing in increasing their performance as well as sales.
So, businesses avail from gaining a competitive advantage greatly.
Following are some of the strategies that are followed for gaining a competitive advantage in the market:
- Leader of the Cost:When a business introduces a product at a lower price without compromising on its quality, the consumer gets attracted to the business.
- Customer Care Service: When a business is oriented towards a business, customers return for another purchase. Customer loyalty and customer retention rate have a positive impact on the performance of a business.
- A business should devise an excellent customer care service system. It would diminish the business pressure to a greater extent.
- Innovation:When a business strives to add innovative products to its product list, other business organizations cannot suppress the development ofyour organization. Innovation separates distinctive and common products. Innovation raises the bar of your Company and puts it at the No# 1 position.
- Different Business Style:When your business has a unique and better logo, you will be deemed as a better business player. Customers will notice your business and consider it better than any other.
- Business Operational Effectiveness:When a business establishes that it can do better than other businesses, it is called business operational efficiency. A business performs better than any other business.
2. Strategic Information System (SIS)
Strategic Information System is an informative system. This information system is created in response to the corporate business initiative.
SIS gives a competitive advantage to the organization. Strategic Information System (SIS) offers a competitive advantage for helping an organization in the implementation of its strategic goals.
SIS assists in increasing the productivity and performance of a business to a greater extent.
Types of SIS (Strategic Information System)
SIS is a type of information system that consists of four types. These types include Support System of Decision, Knowledge Management Systems, Transaction Processing System, and Learning Management System.
These four types of systems aid businesses greatly in increasing its sale and performance.
What Can Help in Responding to Business Pressure Effectively?
There is a business model of PORTER’s Competitive Forces Model. This is the best model of Michael Porter’s 1985 that assists in reducing the impact of the business.
This model analyzes the competitiveness of the market. Following are the feature of this business model:
- This model assists a business in putting a barrier to entry in the market.
- It utilizes the bargaining power of the buyers to some extent.
- It uses the bargaining power of suppliers and tries to give many choices.
- It removes threats of substitute products and firms by gaining a competitive advantage over them.
Business Environment Pressures Can Come From Which Of The Following?
The business environment undergoes pressures that can come from multiple sources.
Following are some of the factors that cause pressure in the business environment.
So, business environment pressures can come from which of the following:
- Reductions in Cost
- Management Restructuring
- Quality Control
- Political Changes
Answer:The correct answer is Political changes. When the state undergoes political changes, it causes a great change in the business environment.
Discussion on the Answer:Political changes are the right answer because business environment pressure comes from three main sources.
These three sources are technology, social/political/legal changes, and market pressure.
In the above four options, we can find the political change that is a source of business pressure. So, political change is the right answer.
The remaining three are not accurate because they affect the business environment.
They do not create business pressure in an organization. Reduction of cost, quality control, and management restructuring merely affects business structure.