Financial Situation

We generalize the data and look at the problem: 1. Conservatism – a business built on the use of certain matrices, charts, and technology. But each such matrix is suitable for a specific period of time with his current situation on the market. Time passes, changing financial and political situation, there New laws are coming to market of new companies and new products, changing consumer demand. This usually occurs gradually, but sometimes the process is uneven and things change very quickly.

The company, which once and for all developed for a specific scheme, and they do not change over the years, sooner or later to defeat. 2. Vanity – sometimes a company like 'swell' of his success, that does not notice that their product is outdated and the technology its promotion of no interest to the buyer. As an example, the company Coca-Cola – a strong, world-renowned company, offering soft drinks. Their product is unchanged, and the aggressive promotion strategy. But times are changing and people are more interested in their health and natural products. As a result, Russia has increased the consumption of kvass as more natural and traditional drink of Russia.

3. Entanglement – when the company grows, it becomes more hierarchical, it is becoming more different departments and services, all of which require coordination and competent management. Sooner or later, the company reaches a level where it occurs the famous 'Peter Principle': A person or company who have reached a certain level, and reach the level of their incompetence. This is explained by the fact that, rising up, a person takes on more responsibilities and in some time already can not perform them all. The company, growing, becoming more intricate, complex, cumbersome, slow, and sooner or later and reaches a state when all the processes to manage it becomes difficult and start error. 4. Laziness – this step are all the companies and it is important to learn how to overcome this period.