The rise and fall of businesses

The rise and fall of businesses

Failure is part of the natural cycle of business. Companies are born, companies die, capitalism moves forward.

Industries and commerce are not static things, but dynamic processes, in which particular products, individual companies and whole industries rise and fall, as a result of relentless competition under changing conditions.

The company which first introduces a product that consumers like may make large profits, but those very profits attract more investments into existing companies and encourage new companies to form, and thus drive down the price.

Losses force business to change with changing conditions and shift to what they are comparatively good at.

Knowledge is one of the scarcest of all resources in any economy and the insight distilled from knowledge is even more scarce.