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something outdated.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).