Responding to changes in technology

Technology change means new or improved digital tools, systems and processes used in business. It affects how a business produces, markets, sells and communicates, and it is not only about new gadgets: new software and new ways of competing matter too. A business can respond by adopting or upgrading technology to keep up with what customers and rivals are doing.

How businesses respond

• Build digital skills: train current staff or recruit people with technical skills, so new systems are used safely and productively.
• Change products or services: add features customers now expect, such as online booking, click-and-collect or a mobile app for loyalty points.
• Use digital marketing and e-commerce: sell through a website and reach customers on social media, which can widen the customer base and help the business compete.
• Improve efficiency: software and automation can cut waste and costs, but usually need investment and can change job roles, so staff may need retraining.
• Review security: more online trading means more personal and payment data is held, so a business should check passwords, backups and who can access records, and keep customer details safe.

New rivals and obsolete products

Technology can lower barriers to entry — the obstacles that make it hard to start in a market. An online shop can be launched with a website and social media rather than an expensive high-street store, so new competitors may appear. Existing businesses may respond by improving their own online service or offering something distinct. Technology can also make a product or way of working obsolete, meaning out of date and no longer wanted. A business then has to adapt or replace it, or it may lose sales.

Worked example

A family-run bicycle shop finds that a new online-only cycle retailer can undercut it and deliver anywhere in the country. It responds by adding a repair-booking service to its website and taking contactless payment in store, posting short maintenance videos on social media, training one member of staff to handle online orders, and tightening security for customer details. These responses cost money, but they help it keep customers and compete.