GCE(A-level) ECONOMIC B Theme 1 -ENTERPRISE, BUSINESS AND THE ECONOMY

How business can be succeeded                    

Creative destruction (structural change)

It refers the ways that create new products and destroy old one by dynamic-technological innovations. These innovations also cut cost and eventually price too.

It enables to be superior to existing products that were attractive to most of consumers.

Thus, many businesses have relied on innovation to capture market even though being creative is quite risky.

Creative destruction can be observed when individual producers are nimble to respond immediately to changes in technologies and fashion.

Otherwise, they will lose demand for their products and profits.

Being disruptive

If entrepreneurs want to avoid competition, they can create new market. Despite it requires huge investment and considerable risk,

They have first mover advantages which generate big profits.

Evaluation                                                     

Nevertheless, consumer preferences change over time and not just in response to new technology.

Moreover, if business is monopoly, then it doesn’t have to be innovative.