Question

Developing Successful Stage I and Stage II Organizations.” Please respond to the following:

Describe the key problems and challenges involved in building a successful new venture in Stage I. Discuss the challenges of developing a successful Stage II organization during expansion. Why do you think that many successful Stage I firms struggle in Stage II during expansion?

Answer 1

Challenges and problems that are involved in building a successful new venture (Stage 1)

When it comes to establishing a new business in the initial stages there are certain problems that the business is faced with. Poor management in that the management that runs the business might not be qualified enough and as a result this causes a strain at the business and it may hinder the growth of the business. Market problem in that the business might not have done a substantial research and as a result, this might reflect to wrong decision when it comes to the product details. Financial problems also offer serious problems to the community . The initial capital that is needed to start the company might not be available thus causing a challenge for starting up a business.

Challenges and problems that are involved in developing a Stage 2 organization during expansion

Most of the expanding firms suffer from certain problems such as emerging markets; the emerging economies are more likely to dominate growth. Succeeding in this particular market is quite impossible. Cost cutting the commodity price inflation and pressure from low- cost competitors. The capital that is required for expansion is quite high and most banks are reluctant to provide them with funds.

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