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Small Business Management 5th Edition by Timothy Hatten
Edition 5ISBN: 978-0538453141Small Business Management 5th Edition by Timothy Hatten
Edition 5ISBN: 978-0538453141 Exercise 2
Is creative destruction just another economic theory for the foundation of capitalism Build a case supporting your answer.
Explanation
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Creative destruction:
Economist Joseph Schumpeter defines creative destruction as "any replacement of existing products , ideas, processes, and businesses with new and better ones".
Statement:
"Creative destruction is an economic theory for the foundation of capitalism"
Justification:
Creative destruction is not just limited to high-technology businesses or to the largest companies. It is also applicable to small business owners who are not able to keep up with market innovation risks. Creative destruction can occur in any type of industries like barber shops getting replaced with saloons and pagers getting replaced with mobile phones.
The term creative destruction is linked with capitalism because both small scale private business owners and large scale private business owners have a common goal of making profits by means of innovating production.
Small businesses can be known as creative destruction in the market, because it replaces the existing product, ideas, and businesses with new and better ones. Small businesses have made tremendous contribution to the society by innovating various products and services for our daily uses. Small businesses have introduced products like tape-recorders, soft contact lenses, optical standards, instant cameras, etc.
Knowledge is the key for innovation and advancement, it is very important for any kind of company to study the market and the consumer clearly. A company should be able to be innovative, and consider factors like trends, customer taste and preference, and competitive analysis.
Economist Joseph Schumpeter defines creative destruction as "any replacement of existing products , ideas, processes, and businesses with new and better ones".
Statement:
"Creative destruction is an economic theory for the foundation of capitalism"
Justification:
Creative destruction is not just limited to high-technology businesses or to the largest companies. It is also applicable to small business owners who are not able to keep up with market innovation risks. Creative destruction can occur in any type of industries like barber shops getting replaced with saloons and pagers getting replaced with mobile phones.
The term creative destruction is linked with capitalism because both small scale private business owners and large scale private business owners have a common goal of making profits by means of innovating production.
Small businesses can be known as creative destruction in the market, because it replaces the existing product, ideas, and businesses with new and better ones. Small businesses have made tremendous contribution to the society by innovating various products and services for our daily uses. Small businesses have introduced products like tape-recorders, soft contact lenses, optical standards, instant cameras, etc.
Knowledge is the key for innovation and advancement, it is very important for any kind of company to study the market and the consumer clearly. A company should be able to be innovative, and consider factors like trends, customer taste and preference, and competitive analysis.
Small Business Management 5th Edition by Timothy Hatten
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