Analyses the processes of innovation implemented during new venture Essay

Analyses the processes of innovation implemented during new venture creation through the study of a Small to Medium Enterprise ( - Essay Example Thus, it is important to analyse the processes involved in the creation of a venture and this can be clearly illustrated through the study of SMEs. Especially in the case of understanding innovation for a new venture, SMEs are perfect models in order to understand the entire process involved. This essay tries to discuss the processes of innovation involved in the creation of new venture through understanding SMEs. SME and its environment The SMEs are affected by the internal and business environment because they are all integral parts of the existing innovative process of the global business. As of the present trend in conducting business, SMEs are the basic units of a country’s affairs in commerce and trade. Thus, there is a need to analyse the recent business environment that substantially influenced SMEs significant moves. PEST Analysis Politics, economy, social and technological aspects are essential parts of the business environment. All of these components are affecting SMEs at certain level. After all, SMEs are organisations or companies with specific structure, operation and resources that are highly influenced by politics, economy, social and technological factors. ... This is the current scenario especially among SMEs in which their opportunities lie on the ability of the government to integrate its political power into the business environment. Thus, SMEs are trying to create important efforts to eliminate whatever existing gaps that may arise along the process. Economy The recent global economic recession is said to be worst economic downturn in history as next to Great Depression (Marino et al., 2010). It is in this reason that companies are making extra effort in order to recover from corresponding profit lose they incurred from such economic event. In line with this, SMEs are under important moves in order to ensure continuous business operation. Social The business environment without question is composed of individuals who are in their daily activities may be influenced by the information they received from the environment. One of this may be due to the effort of companies to stimulate needs for their offerings. Kotler (1999) discussed that companies are into formulating strategies that eventually will stimulate needs for their offerings. This in return may set the current social trend in which the business sectors have gained considerable opportunity for their growth. In line with this, SMEs are challenged to formulate their own strategy in order to also gain social acceptance. Technology The transfer of knowledge and technology is politically desired by the government but this is hindered by issues such as problems related with communication and technology down to intellectual property regimes (Dhillon et al., 2009). The real issue therefore is on how SMEs can eventually adapt into technological competency as the latest trend in the business environment. Aspects of