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According to Drucker (2014), entrepreneurial companies are enterprises that provide their workers with capital, time, energy, and managerial support in order for them to create innovative products, which result in the introduction of new goods into the market. The method of transforming realistic business concepts into new products or services demanded by market users is known as innovation. Such businesses that recognize and capitalize on emerging growth prospects stay innovative and vibrant in today's challenging business world (Drucker, 2014). Organizations seem to be creating an atmosphere that encourages creativity, which allows employees to learn about and study innovative company concepts and goods. Nevertheless, there are several distinct factors why entrepreneurial firms seek the opportunities or possibilities for innovation as illustrated below.
The primary reason is to establish or attract new markets that enhance firms’ growth. Apparently, innovation in a company will result in the introduction of a new product in the market, or development of the existing product to serve the customers’ needs in a better way (Johnston & Bate, 2013). In any case, the organization will have either established new markets with new consumers or penetrated more in the previous market segment. Consequently, increase in consumers’ consumption leads to increase in the sales revenue.
Another reason is globalization and growth in technology. In the past few decades, the competition was domestic, where producers competed with their fellow countrymen. However, in the current business world, through the use of technology and the internet, competition has gone beyond geographical boundaries, which means, firms have to provide quality products to the consumers to remain active in the market (Johnston & Bate, 2013). Otherwise, if they don’t supply the customers with the best products or services, they will diverge and get the commodities from international merchants.
Another reason is to remain relevant in the current business world and to avoid reaching the declining phase. Growth in technology with the introduction of E-commerce and E-business has brought about both merits and demerits to the producers or the companies. For instance, most of the business activities such as recruitment, marketing, payment services among others are conducted online. If a firm fails to be innovative enough, it lags behind, which may lead to a declining phase or closure.
Finally, to increase the customers’ satisfaction and meet their desires. As asserted by Drucker, 2014, customers are always right, and they need fair treatment. Due to changes in the living styles, the demands and the desires of the customers keep on changing significantly. For organizations to maintain or improve the client's satisfaction, they need to be innovative and inventive through conducting research and development to meet the customers demand or requests. Therefore, innovation and creativity are substantial requirements for all entrepreneurial organizations to achieve the highest market share, with significant revenue returns.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Johnston, R. E., & Bate, J. D. (2013). The power of strategy innovation: a new way of linking creativity and strategic planning to discover great business opportunities. AMACOM Div American Mgmt Assn.
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