Convergence Theory Case

Convergence theory hinges on the concept that capitalism and socialism are growing closer and closer together. Convergence theory can be seen in many aspects of the marketing arena, as well as several nations around the world. This is especially true in countries that find themselves in economic turmoil, regardless of its marketing scheme. Socialist or capitalist, countries that find themselves in times of great economic change often end up in a situation where the government either steps in to assist, or steps out to grow. To understand convergence theory, one must first understand the concepts of socialism and capitalism individually, and see the separation and relationship between the two.

Capitalism focuses on three primary principles. First, businesses, for the most part, are privately held entities (by stockholders or individuals) with little direct influence on financials or marketing from the government. In addition, the free market promotes competition from other entities in the same business. Lastly, the businesses are designed with the primary intent of creating and growing profits (Henslin, 2013). These three components define the aspects of a capitalist society. Though some government influence is inevitable, a capitalist society limits the reach of the government into the businesses details.

There are many strengths and weaknesses to the capitalist mentality. The strengths are clear, as we Americans live in a mostly capitalist state of mind. Innovation is created under this concept. The desire to create new and inventive things is sparked by the concept that wealth may be associated with the marketing and sales of new products. With the concept of an open market, competition drives products to be better and better. Where America relies greatly on the concept of entrepreneurships, capitalism is supportive of this mentality. From a negative perspective, this model creates wide divisions in social and economic classes.