Megatrends & Business:
Everything you need to know
History is filled with stories of businesses that have failed due to their inability to adapt. 20 years ago, it was a British tradition to flock to your nearest Blockbuster store to rent a video and grab a bag of popcorn for your weekend viewing. The retailer had a huge portfolio of stores across the UK and its business model proved highly lucrative. Yet Blockbuster failed to see the writing on the wall and didn’t future proof its offer in the face of competition online. In 2000 it declined the opportunity to acquire a DVD-by-mail online start-up by the name of Netflix. Its demise was inevitable and that unwillingness to follow the zeitgeist sealed its fate. Online video streaming dominated the market and by 2013 Blockbuster was filing for bankruptcy.
What is a Megatrend?
Not following global megatrends can lead to businesses falling far behind their competitors, or even closing due because they did not react quickly enough to changing forces.
According to Ernst and Young, megatrends are ‘large, transformative global forces that define the future by having far-reaching impacts on businesses, economies, industries, societies and individuals’. In 2019, Euromonitor International released a megatrends report highlighting five major forces shaping our future:
• Changing consumer values
• Environmental shifts and pressures
• Shift in global economic power
• Population change
• Technological breakthroughs
These megatrends incorporate numerous smaller trends that are defining the future, each with its own impacts. Environmental shifts and pressures cover smaller trends like rising C02 emissions, resource scarcity and climate change. Many of the megatrends are connected and interlinked, such as technological breakthroughs and changing consumer values. Newer technologies are introduced into the markets, creating greater competition for established brands. This challenges customer loyalty as consumers switch brands to exploit technological breakthroughs.
What megatrends mean for business
As previously mentioned, failure to follow, react, and adapt to these megatrends can lead to business failure. Companies must understand how their operations will be affected by changing trends. If overlooked, they represent business risks, yet if they are responded to appropriately, they can offer an avenue for future growth.
Indeed, those businesses which treat megatrends as an opportunity rather than a threat, can see a significant gain in market share. Given that megatrends’ impacts are global, they can allow businesses to access new markets, with a much larger consumer base.
Analysing the megatrends for a significant period can also improve a business’ chances of identifying future trends, allowing them to gain advantage by making appropriate investments, innovations and adaptations ahead of the curve. That competitive edge can prove invaluable. Businesses may have to commit time and resources to analyse these trends, but in the longer term they will be far better equipped to confront the challenges and exploit the opportunities which lay ahead.
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