Business: Its Importance and benefits

Creative destruction was first used by Joseph Schumpeter by means of describing the way how the free market delivers its progress. He also stated that it is applied on businesses especially when it comes on improving one’s economic structure, then replacing the old one thus creative destruction was revealed. Meanwhile, strategy involves a variety of activities in which companies must compete with its rivals in making sure that their products meet up with the customer’s needs and wants. On the other hand, opportunities are present in starting one’s business since it involves encountering an unsatisfied need that we may or may not realize at first, but will eventually allude itself after some time.

Problems in growth system such as lost jobs, ruined companies and vanishing industries are all normal in trying to maintain one’s organization and prevent it from going bankrupt.  In this kind of case, creative destruction will be of great use on operating your job since there will be a possibility that your business will prosper, increase its production and your customers get to see it’s benefits and to make things better for them, they will also have shorter work sheets, better jobs and higher living standards. For instance, as stated in the book of creative destruction by W. Michael Cox and Richard Alm the evolution of transportation starting from the 19th century up to the 1920’s is a great example on how creative destruction is applied. Starting out as railroads for it is famous back in the 19th century up to automobiles in the 1920’s for car makers are famous on their time, then finally, the invention of flying vehicles such as the airplane set out in the world giving out the opportunity that people will be able to make a living out of it by working as a pilot. From the example given earlier, this proves that creative destruction is already present even in the old days evolving from one vehicle to another, which pretty much sums up the purpose of creative destruction which is to change the economic structure inside, destroying the existing one and creating a new one.

Making trade-offs is one of the requirements in strategy when it comes to competing with your rivals. One of its uses is choosing what not to do. Instead it requires in being quickly imitated so as not having trouble in developing new ideas for your business since your performance depends entirely on operational effectiveness. For example, as stated in the book “What is Strategy” written by Michael E. Porter, it is pointed out that trade-offs creates a need for customers in making choices and is also a protection against repostioners and straddlers. Think about the Neutrogena soap for instance. Their goal is to make a product “kind to the skin”. To strengthen its meaning, they focused in distributing their product to drug stores and avoided price promotions and also refused deodorants, the kind that customers want in their soap to which Neutrogena refused to make since it gave up the large volume potential of selling and using promotions through supermarkets.  This shows that trade-offs may bring great benefit for your business, but there’s an issue for that since it has limits when it comes on creating a need that meets up the customer’s needs and wants.

The saying “opportunities come and go” is quite accurate in comprehending what opportunity is all about. It is not often recognized since most of us are often too worried about our problems that we didn’t have time to see the silver lining in our situation. For us to be able to identify a new opportunity in our case, we must know the following four things:  a need; the way that need is currently being satisfies; the cost of supply and; and the economics of supply as stated in the book “Towards an understanding of opportunity by Ben Hulbert, Reva Berman Brown and Sophie Adams. This explains that by knowing these four things, we will be able to change our perspective in seeing situations as opportunity or threat and at the same time, transform ourselves in becoming optimist instead of elephant thinkers/pessimists.

From what I’ve been telling you about the importance and benefits on one’s business, we need to be practical on how we see things or rather than on other people’s point of view in order to understand their needs, wants, expectations and satisfaction which are the most important factor of all in having a job in the future. Not to mention the fact that we must always keep in mind to be tactical on important things because we’ll be on our own and pretty much will have to be independent in having a successful business.

–End–

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