Yazdan Jafri

Section B

To what extent does demographic growth represent more of an opportunity that a threat to UK business? Demographic change is defines as the change in characteristics of a certain population which has taken place over history. Characteristics include things like gender, race and age. I will discuss the certain opportunities such as a larger and more specific market for business due to demographic change. I will also look in to the drawbacks such as the struggle niche business may face when the demographic change of a larger population of over 55s. One of the opportunities demographic changes that is mentioned above creates for the business is that it allows them to become more dynamic and start to specialize in to a new market segment which has very little competition and has very high potential for future growth. One company which has shown this was the holiday company Saga which specialises holidays for the retired/elderly. By offering good rates for cruises and tours which appeal to the older generation gives the business a great opportunity to grow and expand in the UK due to the recent demographic change. By becoming one of the first companies to start such a niche business for a specific group the business was able to exploit first mover advantage. This allowed the business to establish itself very well with the elderly holiday maker market and hence achieved good customer recognition. This has allowed the business to expand in to other countries which also had the potential to grow in the over 50 market. This in effect also gives firms to dive in to other markets which also hold potential for future demographic growth. This was shown by saga again when they tapped in to the insurance sector for over 50s. Diving in to new markets allows the business to generate larger revenues and establish itself as a very competitive company and as a result gain market share. Although the business is at risk in the future if the demand or demographics of over 50s holiday maker do fall or change. This may mean that Saga would need to dive in to new markets which could be risky as funds would not be available in an excess to carry out successful and detailed market research. Another opportunity that the recent demographic change has created for businesses is the fact that they have a larger pool of people to recruit from with higher levels of experience under their belts. This is something that businesses which are trying to execute economies of scale such as Toyota and other car manufacturing companies situated in the UK. The reason for this is that older employees have the many years of skill and experience which they can help the business use. But many of these older employees would be on the back end of their careers and may just want a part time or full time job at a lower salary as compared to younger and less qualified workers. This mix of skill, experience and low salaries allows businesses such as Toyota to recruit a larger majority of these kinds of specialised workers which can improve their overall efficiency, something they strive upon using their kaizen policy, and in effect lower their unit price to stay more competitive in the UK and global market. Not only does efficiency rise but the business also performs at a higher level due to the better quality of the workforce and problem management skills. His higher performance allows a business such as Toyota to produce at a level closer to their maximum capacity. Therefor allowing the company the opportunity to meet its high global demand and execute a larger amount of sales and generate a larger profit and market share. But this is only a short term way of recruiting staff. These employees would only be taken for a maximum of 3 to 5 years. Due to this the business should also look to mix younger prospects to secure the long term stability of the workforce.

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Section B

However I also believe that some businesses may face drawbacks due to the recent demographic changes. One of the disadvantages that some niche businesses may face more competition. An example of this kind of such a business industry is that of the halal meat distributors. Due to the high population growth of Muslim customers recently in the UK, the demand of halal meat has increased. This increase in demand has led to many supermarket stores to offer halal meat. This in effect has meant that less people are now bothering to go to specialised meat distributors due to higher prices. This would hence mean a fall in demand for niche businesses. This would furthermore mean business may look to appeal to the mass market, for example a halal meat business just selling general meat for a larger market. This could mean that the business fails to achieve expected sales due to the lack of experience in the mass market. This lack of experience may mean a large percentage employees would be axed to save costs and would create a sense of instability amongst workers which could mean a fall in efficiency and production. This would furthermore lead to a loss in market share and competition, which may result in the closure of the business. However a business may not look to go to the mass market and stick to its niche product and look to add quality to its product, for example selling better quality of halal meat. This added quality would help the business to increase its price and appeal to the higher end customers who want the best quality meat. Another drawback to the business due to the demographic changes taking place in the UK is the fact that some of the older workers may not be fit enough to handle the job required. An example of this may be seen in the UK construction industry in particular the construction company of Balfour Beatty. The jobs require workers to be fit and able to do manual labour in order to construct quick and to good quality to ensure safety and maximum customer satisfaction. They would look to hire younger more talented constructors in order for work to be done at a good pace. The fact that the UK population of over 55s is growing would limit the employee pool the business can recruit from. This would mean that the business may be reluctant to axe younger employees who would be harder to replace. As a result of this the younger employees may realise the demand of their skills and may slack off a bit and in effect cause the rate of construction to lower. As a result satisfy customers to only a limited extent. This would lead to the business failing to order for constructions and may lead to a fall in revenue in the future. Another factor a business would look to consider is the awareness between the younger community to join the construction industry rather than other lines of careers. This may mean setting large workshops or talks in schools where they can attract potential employees using lucrative initial deals in an attempt to help stabilise the future working environment. This would however mean a large investment from the business, something which may be hard to back up due to the recent recession and slow growth of the construction sector in the UK. Although these factors will not affect the business in the short term, long term effects should be dealt with early in order to minimise problems they may face. In conclusion, to say business face more of an opportunity due to demographic change would in my opinion is wrong. I believe that the opportunity a business faces is gauged by what exactly the business does and how the demographic change is related to the business. There are also many other factors a business should consider such as the reaction of other competitors due to the changes taking place. The opportunity that could be available for a certain business may be zapped away very quickly if the business does not react quickly to change. This was shown very clearly when Apple introduced a new generation of smartphones with touch technology. Other competitors such as Nokia and Samsung where slow to react and are now trailing behind. In my view first mover

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Section B

advantage is vital to maximise the opportunity created to the business. However it may be argued that all business should stick what they are best at doing I believe that they must adapt as time goes on a certain as demographics change in order to maximise growth and sales. Carrying out market research to great detail can help stabilise new moves a company makes to new markets.