Production is defined as the ability to use different resources to create something beneficial. Entrepreneurs in our society today use production to create products or services that individuals utilize. Without using available knowledge and understanding of what society wants or needs, entrepreneurs will not be as successful as others in business in order to compete. Also, in our society today, entrepreneurs work to meet the needs of individuals. As the individual’s needs or wants change, so does our market. Our market is created to shift to these needs or wants that individuals peruse. If entrepreneurs lacked this knowledge and were unable to shift to the people’s needs or wants, our world would not be as comforting and successful as it is today.
In this chapter, Bylund emphasizes the process of production. Production is a long process that occurs after an entrepreneur comes up with their business ideas. Although entrepreneurs are considered the ones responsible for creating products and services, they are not the only ones required to make it come to fruition. The process of production takes many individuals who are specialized in certain areas to make the product or service happen. For instance, Bylund (2016, p. 58) expresses that Becky produces nails because she is best at it. However, she could also make bread, but since Bart specializes in making bread, he is able to more efficiently produce that product. So, although Becky could produce bread, she decides not to because it will take her too long to produce the same amount that Bart does. This is an example of two different individuals with two different specialties. Since they produce different items, they are able to help each other through exchanges. When producing a product or service that uses different specialties, an entrepreneur often tries to create a group of partner companies with different specialties to help speed up the production process. By partnering, entrepreneurs can go to market faster. Being able to produce a product or service fast means that more individuals' wants or needs are filled, and earning profits is faster too. It is stated in this chapter,
“In other words, production in a market is in constant flux. It is never stable” (Bylund, 2016, p. 64).
This quote expresses that in a competitive market, entrepreneurs must continue to find the best way to produce their product or service so that they can keep filling orders. Being able to shift with customers' wants and finding ways to meet their needs quickly is essential. If an entrepreneur is using an old, more costly, slow technique to produce their product, they are going to have to raise the price of it because they must pay for the time it takes to make the item. And if they raise their price while their competitors have a lower price, they are not going to keep many customers.
I agree with this idea of it being necessary to have an effective production process because we see it in our society today with the online shopping platform called Shein. Shein is able to produce products at a lower cost than the high-end fashion stores, therefore, many of my friends shop on-line so they can pay less for clothing items. Personally, I am one of the individuals who would rather pay less for a certain product when I am able to. By using Shein, I am able to save money which then allows me to buy more. Since Shein sells things for less than other companies, they are getting more of my business. I assume that they have figured out a way to produce their clothes for less, so that they can sell them to their consumers for less. And therefore, the assumption is that they are able to make higher profits than other companies who produce and sell similar products.
Our market is constantly changing, whether it is due to societies' changing wants and needs or the time it takes for production to provide the products, or due to economic inflation. Creative destruction happens when an old product or service is replaced by something new. Entrepreneurs must be aware of what is changing and be able to change with it, even if that means getting rid of old products and creating new ones. The article states,
“It is what capitalism consists in and what every capitalist concern has got to live in” (Schumpeter, 1962, p. 83).
This quote expresses the idea of creative destruction and that businesses must constantly be changing their model in order to stay relevant and keep our society running. I agree with this term and process because our world would not be able to evolve without change.
Having the capability to understand your strengths and weaknesses is essential in the production industry. Recognizing where you are able to be your very best allows you to accomplish more and become more successful. Keeping up with changing market issues and being able to update products, production of products and get them to market fast is how entrepreneurs can win new business and keep customers. Overall, these articles allowed me to further my knowledge on how intelligent entrepreneurs really are. Sometimes, for me, I am unable to specify my specialty because I enjoy helping everyone, but understanding this will allow me to become better at accomplishing my goals.
Bylund, P. L. (2016). Chapter 4: Unbeatable, Imperfect Markets. In Seen, the unseen, and the unrealized: How regulations affect our everyday lives (pp. 47–72). essay, Lexington Books.
Schumpeter, J. A. (1962). Chapter VII: The Process of Creative Destruction. In Capitalism, socialism and democracy (pp. 81–86). essay, Harper Torchbooks, Harper & Row.
