The changing business environment Assignment 2022

Management
The changing business environment
Student’s name
8/4/2019

The changing business environment 1
Business environment, which in today’s time it is constantly changing. Along with this, it
is very complex and dynamic in nature, which carries the factors such as economic, legal,
technological aspect and shows the rapid development in the information technology and its
application (Savrul, Incekara, & Sener, 2014). Over time, it is also seen that both business and
the trade has gained the information technology with improvements in efficiency, productivity.
As productivity, improvement has facilitated the speedy and accurate production in very larger
range (Nohria, 2017).
Creative destruction is one of the well-known techniques, which was introduced by
Australian economist Joseph Schumpeter which states that it is one of the processes in which
new entities in the economy replaces the obsolete ones. Other than this, it is also seen that the
capitalism ability to destroy the older one and innovate something new or reinvent itself. As
innovation in our economy, means creation of something new and replacing them with
something outdated. In other words, when old firms and industries are not profitable anymore,
they close down. Such destruction enables the resources such as capital and labor to move into
more productive course (Komlos, 2016).
The creative destruction process mainly highlights that when the company comes up with
the new ways or new combination, new productive unit is formed. Then the company submerges
the new and the old productive units together to get something creative output. Then, company
when after the new ideas starts with the production by applying the both old and new production
unit. This entire works goes smoothly and operations are regulating more effectively than before.
Then, the cycle goes on with the similar way. Consequently,, creative destruction is that process
which mainly focuses on industrial transformation, from being a competitive to the monopolistic
market and then back to competitive. For example, earlier there were CD‘s then they are
gradually replaced by MP3 and now they are being replaced by Digital music downloads.
Innovation, which is one of the strongest sources of the organization or the entrepreneurs,
which mainly help them in, competes with the existing firms or the industries, eroding their
profits and market share and eventually becoming more powerful than them. Whereas,
entrepreneurs are the persons who conduct businesses, takes risks, exchange the various business
deals and in the process, they aimed to capitalize. Other than this, entrepreneurs are those who
stimulates the productions and the business altogether and enables the market equilibrium.

The changing business environment 2
According to the Schumpeter, the nature of the entrepreneurship and creative destruction are the
key features of capitalism (Bureau, 2013).
If we talk about the naturalist of the creative destruction, it is mainly caused by the
entrepreneurs. Entrepreneurship according to their nature revises the old knowledge and
introduce the new knowledge though various innovations so that the firm should further develop
their doings and sustain their competitive advantage in the market. Hence, this highlights that
entrepreneurship triggers the creative destruction. As in this, company holders innovate their
products, services and the entire organization in turns further cerates or generate value in the
market and along with this, they diminish the value of the incumbent products, services and the
entire organizations (Tülüce, & Yurtkur, 2015). It is also seen that the resources, which were
used of applied in the old are rarely, suited to the new production and therefore, the new industry
and the new production process starts and the old bone gets destroyed. The two cornerstones of
the creative destruction process are the innovations and the entrepreneurship, hence, this helps in
driving force that helps the entrepreneurs to bring innovation to the forefront of the economy and
in this way they triggers the destruction (Andersson, Braunerhjelm, & Thulin, 2012).
Yes! It is proven that the entrepreneurs are the key drivers of the creative destruction.
This is because, according to the entrepreneurs point of view, when market is in stable condition
with the clear growth goals. In that concern, the company needs to work on the technology
aspect, incremental innovations to be made need to new formation of the product and the service
for better understanding of the customers taste, preferences and targeting the customers base well
(Kivimaa,& Kern, 2016).
By knowing all this, innovate entrepreneurship is in the mould of a rebel or the change
agent, he mainly aspires to develop something old into new, a new product or the new service
package or the new production process which mainly renders the existing products and the
services less functional. According to the facts which are highlighted by the Schumpeter’s is that
it is not necessary that all entrepreneurs are not always interested in the money but they
engrossed their mind and looking forward for the innovative business activities, seeing various
opportunities and much more. In addition, other than this, some organization fails because they
only think of earning money rather successful entrepreneurs focus on new ideas, new dreams in
which they worked for (Batabyal, & Nijkamp, 2012).

The changing business environment 3
In a study, it is also found that innovative entrepreneurship, the term destruction leads to
the new spirit of creation, and giving room to the universal principle that every creative act has
its destructive consequence. For example, over years typewriters are totally disappeared and the
arrival of the computers were there. Hence, such scenario leads to the collapse of those
organization who applied typewriters, their prices fallen, and there was a wake of new
production and innovations such as computers. Therefore, all those companies who are
benefitted or made money and became obsolete which further might adapts the new
technologies which, leads to the retrenchment of the workers and the many other hardships to be
made by the company (Nightingale, 2015).
In other words, the entrepreneurs is the engine of the creative destruction, capitalism,
which is the fundamental impulse and the keeps the capitalist engine in motion which mainly
comes from the new customer demand, taste, preference, new method of production , new
market creation and much more. Hence, this kind of process of creative destruction is the
essential facts about the capitalism. In this innovation or something new plays a major role, as
such aspects helps the entrepreneurs to grow their business and his dominant position in the
entire market. Hence, by this it is proven that by the power of innovation, the entrepreneurs goes
beyond the limits, establish their new own rules, master the uncertainty and also inherent the
functions of the market in order to performance better than before and earn name and goodwill in
the market. Hence, in other words, the entrepreneurs invests their specific sector of activity as for
then the economy, society and technology are the main factors which helps them in bringing
many solutions to the unlined problems (Schneider, 2017).
Therefore, this is proven that innovation by the ultimate entrepreneurs leads to the
creative destructions as innovation helps in changing of inventories, ideas, technologies, skills
and equipment’s who because obsolete. Nevertheless, the positive aspect of creative destruction
is that it leads to the continuous progress and helps in improving the standards of living for every
business holder in the market (Coyne, & Williamson,2012).
Closing of the companies or many organizations due to the adoption of creative
destruction or innovation in the organization has majorly affected the market at large. The key
reason behind these closers are- As companies are building an intolerance for excess complexity
as when we see on to the root of this, market has evolved, technology changing and due to

The changing business environment 4
regular innovation and with rapid changes more of creative destruction is taken place. Hence,
due to such changes they survive more than those who do not. Other than this, companies and
much other organization are competing for the longer time period, competing much and regularly
tracking down the operation performance after innovation leads to more generation of success
(Schubert, 2013).
Moreover, the entrepreneurs who leads to the innovation and the adoption of creative
destruction focuses on the greatest strength of the firm , just like apple they having a tremendous
performance in the history and they did something new or innovate with their products which
leads to the competitive advantage of them. Lastly, making various strategies on a repeatable
model that replicate and adapts the greatest success repeatedly. This all can be done when the
company reacts faster than their competitors do (Ziemnowicz, 2013).
According to my analysis, the best example of creative destruction is Netflix, as it is
disruptive to existing industries and the effect after the creative destruction is Netflix effect.
Traditional media companies got bankrupt in 2010, instead of them, Netflix is now challenging
to many cable network as they have become obsolete with time and now the ultimate winners of
the creative destruction are Netflix effect. As from them, customers reap intense benefits and
gives the cutthroat competition in an form of constant evolution, never-ending entertainment of
innovate customer products which is getting faster, cheaper and better all time. Hence, this
proves that creative destruction makes the better world day by day.
Another implacable example of creative destruction is Uber Company. Earlier when uber
was started there were single ride was in system, because of this, people opting for uber they
were rather travelling to train or bus. Then company with the creative destruction focused on ride
sharing aspect and with this, they again with the use of the competitive advantage factor target
all their customers at the lower price. He by doing or adopting the innovate technique of the
creative destruction, they have affects the business overall turnover and has improved the
economic growth who develops the innovative business ideas and makes the old process or the
company obsolete. By this, uber has begun top ripple the benefits from the technological
innovation of the creative destruction (Igami, 2013b).

The changing business environment 5
Lastly, when we talk about the amazon company, it is also one of the well- renounced
companies who applied creative destruction method of innovation, which was at its finest as
earlier the bookstores were to sell books of wide variety but after the introduction of the amazon
books were sold online. Therefore, this highlights that traditional bookstores faced a huge
competition in terms of online retailers like amazon who offered books on a great discount.
Further, amazon also introduced them with the e-book stores. Hence, this highlights about the
finest example of creative destruction as they come up with the new idea and reduced the
traditional ways of book shopping. Hence, through this, they gain an competitive advantage of
selling things online and now by the use of such innovative aspect they are selling clothes,
accessories, shoes and books all online and gain or tapped the large market share and customers
base as compared to the retail stores. Such innovate techniques are generating destructive results
for the traditional methods and companies and finally letting them obsolete with time (Igami,
2013a).
From the above essay, we can conclude that creative destruction mainly highlights about
the innovation aspect. Hence, it is seen that entrepreneurs are the main reason with which
creative destruction played a major role in the success of the many organization and along with
this, it also negatively affected the traditional outlets or the organization that was unable to
innovate due to the lack of knowledge or the finances or capital. Hence, from overall point of
view, creative destruction has given the historical perspective the new strategic view or
importance to businesses’. Hence, this leads to the success in the enhancement of economic
condition and as well as fulfilling the required needs of the customers as customers and creative
destruction goes hand in hand because customers wants change in an environment and so does
creative destruction or technological innovation does.

The changing business environment 6
References
Andersson, M., Braunerhjelm, P., & Thulin, P. (2012). Creative destruction and productivity:
entrepreneurship by type, sector and sequence. Journal of Entrepreneurship and Public
Policy, 1(2), 125-146.
Bureau, S. (2013). Entrepreneurship as a subversive activity: How can entrepreneurs destroy in
the process of creative destruction?. M@ n@ gement, 16(3), 212-132.
Batabyal, A. A., & Nijkamp, P. (2012). A Schumpeterian model of entrepreneurship, innovation,
and regional economic growth. International Regional Science Review, 35(3), 339-361.
Coyne, C. J., & Williamson, C. R. (2012). Trade openness and cultural creative
destruction. Journal of Entrepreneurship and Public Policy, 1(1), 22-49.
Igami, M. (2013a). Estimating the innovator’s dilemma: Structural analysis of creative
destruction. Manuscript, Yale University,1(2),47-56.
Igami, M. (2013b). Estimating the innovator’s dilemma: Structural analysis of creative
destruction. Manuscript, Yale University.
Kivimaa, P., & Kern, F. (2016). Creative destruction or mere niche support? Innovation policy
mixes for sustainability transitions. Research Policy, 45(1), 205-217.
Komlos, J. (2016). Has creative destruction become more destructive?. The BE Journal of
Economic Analysis & Policy, 16(4) 78-97.
Nohria, N. (2017). Fast forward: The best ideas on managing business change. Business
Review, 9, 10.
Nightingale, P. (2015). Schumpeter’s theological roots? Harnack and the origins of creative
destruction. Journal of Evolutionary Economics, 25(1), 69-75.

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Savrul, M., Incekara, A., & Sener, S. (2014). The potential of e-commerce for SMEs in a
globalizing business environment. Procedia-Social and Behavioral Sciences, 150, 35-45.
Schneider, H. (2017). Creative destruction and the sharing economy: Uber as disruptive
innovation. Edward Elgar Publishing.
Schubert, C. (2013). How to evaluate creative destruction: reconstructing Schumpeter’s
approach. Cambridge Journal of Economics, 37(2), 227-250.
Tülüce, N. S., & Yurtkur, A. K. (2015). Term of strategic entrepreneurship and Schumpeter's
creative destruction theory. Procedia-Social and Behavioral Sciences, 207, 720-728.
Ziemnowicz, C. (2013). Joseph A. Schumpeter and innovation. Encyclopedia of Creativity,
Invention, Innovation and Entrepreneurship, 1171-1176.