Technology and business go hand in hand. Advances in technology have always had knock-on effects in the business world, and it’s fair to assume that they always will. But as we all know, sometimes these consequences can be positive, and other times they can be negative. Ultimately, it depends whose lens you’re looking through. To one company, a new tech-based solution could be good news, while to another brand, it could spell immediate danger.
In this article, we’re going to consider the main opportunities and threats to businesses that come from technology.
Opportunities
Efficiency
From marketing to manufacturing, just about every business area can be improved by technology. Improved in the sense that things can be automated, made quicker, made cheaper and so on. Ultimately, technology makes business procedures more efficient. The recent development of artificial intelligence highlights this point perfectly. While we can debate the quality of AI content, there is no denying that the likes of ChatGPT can churn out business material at a far quicker rate than any human on the planet.
New Markets
We can talk about business markets as a location or as an industry, but one thing’s for sure, technology is the driving force that allows businesses to branch out.
Without technology, businesses would be stuck operating in the same small towns where they were created. But with technology, small businesses have been able to connect with potential customers in all corners of the world. The internet became how we hear about new brands in other continents, and it’s now where we buy from whether purchasing groceries from our local store or a fashion brand on the other side of the world.
But it’s technology that also allows companies to reshape their products. Snapfish is now a global brand, but began as a photo printing company where customers could send camera film to be turned into prints and mailed back to them. The developments we’ve seen in terms of smartphones and cloud storage now mean that Snapfish is able to offer a far wider range of products that focus on personalised gifts.
Threats
More Competition
Technology is what breeds new businesses, and more businesses mean more competitive markets. But unfortunately for some, new competitors spell the end. Take a look at the mobile phone industry for example. The likes of Nokia and Sony dominated for decades, but the innovative arrival of the iPhone had catastrophic consequences in terms of market share. In this case, Apple’s product was so strong that its brand loyalty and strong reputation weren’t even enough to compete.
Changing Consumer Preferences
As tech develops, our preferences as consumers change thanks to more convenient ways of purchasing. Streaming allowed consumers to rent or purchase movies from the comfort of their own homes, and this far more convenient way of consuming movies obviously became a preference. While this represents an opportunity to consumers and startups, it was a threat that proved too much for rental stores such as Blockbuster.
Higher Costs
The final threat, but perhaps the most obvious one is the financial cost of technology. While tech often makes products and services cheaper for the end user, brands must absorb a lot of the cost to get to that point. From researching new technology to developing new products, there are a number of ways in which tech forces businesses to spend more with the only alternative being to run the risk of not keeping up with your competition – something that many of the businesses already mentioned chose to do, and paid the ultimate price!
The best modern-day example of technology driving costs is the car industry. While many drivers are switching to electric vehicles for both environmental and financial reasons, it’s estimated that over a trillion dollars have been spent on researching and developing electric cars globally.
Final Thoughts
If you were to ask if technology is an opportunity or a threat to businesses, the answer would simply be it depends. It depends on what type of technology you’re referring to and more importantly, it would depend on which business or industry you were referring to. We’ve touched on several examples of technological improvements throughout this article, and each one would present opportunities to some and threats to others. Arguably the biggest shift in tech during our lifetime, the internet, provides the best example of this.
To the consumers who receive goods far more conveniently as a result of ecommerce, it was a great opportunity. The millions of ecommerce brands across the world would also agree. But to the local businesses that have been put out of business due to this change in consumer behaviour, the internet was the biggest threat of them all. That’s why technology always has been and always will be the biggest threat and biggest opportunity to businesses across the world.
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