Creative DestructionCompanies constantly rely on the innovative ideas of their employees to improve industry performance and eliminate existing competitors. Managers know that competition is the key ingredient to a thriving economy. Managers realized that they had to find a way to quickly eliminate the competition and came across an idea which is Creative Destruction. Creative destruction occurs when something that existed before in an industry, such as technological ideas, product development, and economics, is no longer relevant and/or is “killed” by another new innovation entering the industry. There are many examples of Creative Destruction in business today, and one of them is the introduction of smartphones into the tech industry. Cell phones, for a long time, were used primarily for making calls and the occasional game of "snake", but nowadays cell phones are much more than that. Cell phones, or now called smartphones, are extremely complex and can now do much more than make calls and play "snake". Smartphones are now able to check email, social networks, take photos and videos, upload anything to the Internet, open files, play all kinds of games, listen to and store music, and hold more storage than ever before . The reason why smartphones are an example of creative destruction is because when they entered the tech industry; MP3 players, cameras, calculators and watches were no longer important and successful in the tech industry due to the fact that a smartphone could do all of these things on one device. Creative destruction is an important aspect of innovation because it keeps businesses afloat. ...... half of the document ...... opportunity to take over the company. Competition can be higher in these types of industries and companies because if one company lacks something that another company has, there is a greater chance that companies will have to abandon if they are not making any progress like their competitors are doing . References Definition of Creative Destruction | Investipedia. (n.d.). Investipedia. Retrieved April 16, 2014, from http://www.investopedia.com/terms/c/creativedestruction.aspJohnston, K. (n.d.). The benefits of a fragmented industry. Small business. Retrieved April 15, 2014, from http://smallbusiness.chron.com/advantages-fragmented-industry-30745.htmlReams, P. (Editor). (2012). The Men Who Built America [Documentary]. United States: A&E Television Networks.Williams, C. (2013). Part 1, Innovation. MGMT Student Edition (6 ed., pp. 26-36). Mason, Ohio: Mike Schenk.