Business challenges are current or long term challenges and issues faced by a business. These may prevent a business from executing strategy and achieving goals. In some cases, business problems also threaten the long term survival of a firm. The following are illustrative examples of business problems.
Financial issues such as an inability to refinance debt due to tight credit conditions.
A business model that has been disrupted by a new way of doing things. For example, an energy company based on products that pollute the environment when cleaner and cheaper alternatives emerge.
Reputational issues such as poor customer service that receives media attention.
A firm that doesn't align to the changing values of a society in which it operates. For example, a business model, product or operational process that harms the environment.
Costly or burdensome regulations. This can particularly impact small businesses as it can drain limited resources.
Brand issues such as a small business that has difficulty establishing brand recognition in a market dominated by widely recognized brands.
Product positioning issues such as an organic coffee that looks much the same as the other products on the shelf except that it is more expensive than the competition.
Changing customer needs, preferences and perceptions that reduce demand for your products and services. For example, a cultural shift towards healthier food may negatively impact brands that produce junk food.
Increased supply by your competition or a substitute product. For example, a short term property rental service that increases the supply of rooms may negatively impact hotels in an area.
Price competition that lowers your sales and/or reduces your profit margins. This is particularly a problem if you are facing competitors with lower unit costs such that they can keep prices low and remain profitable.
Rising costs such as your cost of capital, labor, materials, parts, overhead and obligations to partners.
Sales problems such as an inability to recruit sales people who have many connections amongst your target customers.
- Only 28.1% of closed deals are predicted accurately 90 days out.
- Reps spend 99.5% on leads with prospects that will never convert.
- Reps only spend only 36.6% of their time on revenue generating activity.
- 87% of companies said data integrity and clean-up is a significant issue.
- Only 27.9% of sales leaders felt they had a dynamic sales process within their organization.
- Sales reps believe they contact prospects but they only contact them 4 times.
- Just 47% of companies report access to relevant content for sales reps.
- Only 41.2% of sales leaders agreed that their comp plans were aligned with business objectives.
- 79% of all marketing leads are never converted to sales.
- 82% of B2B decision-makers think sales reps are unprepared.
Based on Research from InsideSales.com, CSO Insights, Pardot, The Alexander Group, Biznology, and SpringCM
Customers who are unhappy with your products or services such that they are likely to cancel services and/or generate negative word of mouth.
Promotional problems such as an inability to generate demand or interest in a new product launch.
A new product or service that is poorly received by customers or the media. For example, a hotel that undergoes an expensive renovation only to see reviews plummet as customers feel room interiors are visually unattractive and uncomfortable.
A product launch that is slower than you need. For example, issues setting up a production line.
A product launch that takes longer than expected to reach your sales targets. For example, an innovative new streaming media service that finds that their target audience are uninterested in changing their media viewing habits.
A firm that lacks the knowledge to get something done well. For example, a high speed train manufacturer with product reliability issues due to a lack of reliability engineering know-how.
Technology issues such as a costly service outage due to a failure of IT infrastructure.
Information security attacks or vulnerabilities.
An inability to change such as a project failure or business transformation that fails to achieve its objectives.
Employees who lack motivation, talent, diligence or professional standards. For example, a retail location with poor customer satisfaction due to poor management and employees who aren't friendly, helpful or reliable.
The habits, norms and expectations that have evolved in your organization over its history. For example, a call center where employees openly complain that customers have negative traits such that negativity towards customers is commonplace.
Low output in an hour of work. For example, an office where people are spending as much time on personal social media as working.
Low output for a unit of input. For example, a factory that produces 200 units an hour with $1 million in equipment versus a competitor that produces 2500 units an hour with $1 million in equipment.
A firm that isn't able to detect problems because their measurements and benchmarks fail to detect significant underperformance. For example, a firm that aggressively reduces unit cost without properly measuring quality or product ratings. This may result in quality failures and a loss of brand reputation and market share.
A firm that can't achieve its target level of quality. For example, a firm wants to release a hot chocolate mix that is perceived as higher quality than a major competitor. They have tested dozens of formulations and packaging designs but all score poorly with customers.
Problems with your end-to-end customer experience. For example, a mobile device brand that customers perceive as visually unappealing, difficult to use and unreliable.
Problems reaching customers with your products and services. For example, a restaurant chain that runs out of critical ingredients across an entire region due to a supply chain disruption.
Business process issues such as a single point of failure on a production line that is causing expensive downtime.