Creative Destruction And Its Impacts On Market Planning

1240 Words Oct 18th, 2015 5 Pages
Creative Destruction

Abstract

This paper aims to explore Joseph Schumpeter’s theory of creative destruction and its impacts on market planning .This concept would be explained with the help of an example. This paper focuses on Netflixs innovative approach led Blockbuster to extinction.

Introduction

Creative destruction refers to the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it 'the essential fact about capitalism ' In simples words ,creative destruction occurs when something new tries to take over something old . This term is used in various fields like technology ,marketing and product development . In marketing, an example about creative destruction is about an advertisement campaign which targets a new market by putting the present market in risk.

Blockbuster (video rental)

By the time Netflix(1997) came in to existence blockbuster had dominated in the video rental market . Blockbuster in 1985 had about 40 percent share o In earlier time going to the store and getting movies of your choice was a way simpler and a convenient method . Blockbuster a videotape and music rental shop has been driven into extinction by Netflix creative destruction. Blockbuster was that company which attracted consumers to leave there couch in order to rent a movie from the nearest shop. But blockbuster closing showed a critical fall in the growth of the economy.…
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