Trends and Challenges (Introduction)

The are 4 drivers on long-term trends, ie

i) technology (smart phones, social media, internet, digitilisation, automation, etc)

ii) demographics the rising expectations of the world's growing middle class, aging populations in developed countries, etc)

iii) resources (climate change, finite resources, renewable resource, etc)

iv) psychology (neuroscience, etc)

Organisations need to keep a "watchful eye" on trends that could impact on them.

It is important to sort out the trends from the fads. The trick is picking a real trend as opposed to the fake trends. As Neil Shoebridge (2004) reports, some of the factors to keep in mind are demographic changes, complexity (including age, gender, life-stage, income, etc), convenience, health, sensory, individualism and connectivity (for more details see management fads in this volume and in volume 5 - Section on Customer Management). There are 5 rules to help define trends

i) unlike fads, which are linked to short-term movements such as fashion, trends last at least 10 years

ii) for every trend, there is a counter-trend, which can create untapped growth opportunities

iii) there are "rich pickings" for organisations that cover 2 or more mega-trends

iv) fads, when under-pinned by a mega-trend, can generate sales spikes and keep brands fresh

v) if marketers cannot straddle 2 trends, consumers will that is, people will find a way to satisfy 2 or more needs regardless of what marketers try to make them do.

Sometimes we hang onto trends too long, eg starting in the late 1990s and lasting for over a decade, the Chinese economy was the only thing growing. Yet since the global financial crisis, China has stalled and could have problems restarting as its wages are becoming uncompetitive. Yet people have not accepted this change. In 2016, the Mexico-Texas midwest corridor was probably the most dynamic part of the world.

Other areas of concern include

- the global push by central banks to flood the world with money; this could unleash an inflationary wave and has serious consequences for the developing world where the cost of food is going up. Anti-government activism and populism by the discontent are flourishing as a result and it's global in nature.

- analysing the wrong data, eg in Australia, official inflation is low yet everything is expensive. there is

"...disconnect between the official data and inflation vs the cost of living and the actual pain everybody is in..."

Philippa Malmgren as quoted by Joanna Gray 2016

- the importance of the Chinese policy "One Belt, One Road", ie

"...Over the next 25 years, China is going to build physical infrastructure from China through Central Asia into Western Europe and along the coast line of Asia around India into the Middle East, around Africa, up into Europe and across Latin America..."

Philippa Malmgren as quoted by Joanna Gray 2016

This is going to have a huge impact on the world economy.

 

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