Technological change, government regulations and policies, globalization, economic and market pressure are some of the primary reasons that force companies to review status-quo. These factors directly affect companies’ ability to compete in the market place. Change is the only consistent thing in the world; hence companies continuously review their current position as they try to remain relevant to the marketplace (Araujo & Gava, 2012).
Technological change brings changes in the market place, forcing companies to embrace new ways of producing goods and services as well as distributing them to the market (Araujo & Gava, 2012). With the advent of the internet, globalization has become a reality that companies must embrace. To effective take advantage of technological change and globalization, companies must review the status-quo (Yeung, Xin, Pfoertsch, & Liu, 2011).
Government may change its policies and market regulations. In such a scenario, companies must review their current state to adhere to the new regulations. New technology brings new challenges for the government; as a result, the government may be forced to review its regulations (Yeung, et al., 2011). Consequently, companies in a certain industry would have to change to remain within the new law.
Further, companies review the status-quo due to market and economic pressure. As competition stiffens, companies’ device new and cheaper ways of meeting demand. They must regularly analyze their strengths, weaknesses, opportunities and threats they face. This allows them to reduce cost of meeting demand as they increase their profit margins (Araujo & Gava, 2012).
Companies review their status-quo as a way of improving their effectiveness. As they do this, they should consider the cost of change against the benefits they would get.
Araujo, L. & Gava, R. (2012). Proactive companies: How to anticipate market changes.
Basingstoke, Hampshire: Palgrave Macmillan.
Yeung, A., Xin, K., Pfoertsch, W., & Liu, S. (2011). The globalization of Chinese companies:
Strategies for conquering international markets. Singapore: John Wiley & Sons (Asia)