Why Are Cost, Revenue And Profit Important?

1007 Words 4 Pages
Nowadays, Facebook should be the most popular social networking site in the world, but is Facebook the first social networking site in the world? The answer absolutely is negative. According to the article “The History of Social Networking” (August 5, 2014) in Digital Trends, social networking started with the BBS and the real beginning of social networking is the launch of Friendster. Friendster as the first social networking site steps in the edge of the social networking. As we can see, leader of a field is not innovator as more competitors enter the market, but one of those imitators will stand out. Because of that most people cannot like Thomas Edison who owned 1093 patents, a successful business often imitate other companies’ advantages. As imitators in business, people can find their starting point easily than innovator, and they will take less risk by imitating competitor’s advantages, and they can reduce cost in innovation.
The first reason why imitation is better than innovation in business is that innovation is hard for most people and organizations. According to Edward D. Hess (2014), innovative
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In the article “Why Are Cost, Revenue & Profit Important” by Ellis Davidson and Demand Media (n.d), cost is one of most important factors in business, and cost reduction can increase profits effectively. In this way, reduction in developing cost could lead a huge profit. In the book, Oded Shenkar (2010) introduces that researching and developing new drugs usually cost billions of dollars, but only 10% drugs can pass the clinical trials. The innovator will grant its patent protection, and they would recoup their investment in the period of protection; however, imitator can apply for making generic drugs, and the first imitators can make huge profits since they gain

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