Question

In: Operations Management

Discuss the pros and cons of bootstrapping and how important it is for entrepreneurs and their...

Discuss the pros and cons of bootstrapping and how important it is for entrepreneurs and their business venture pursuits. Provide practical or real-time examples to support your conclusive assessments.

Solutions

Expert Solution

The entrepreneurs have to work within the limits that would make it to be able to have the best resource utilization. The bootstrapping has its pros and cons for an entrepreneur. The pros are:

· The entrepreneur takes a measured risk in each case here they know their limits,

· The risk assessment is well devised for the new startups so that they don’t destroy all asses and money if there is an emergency,

· The business understands the needs of the consumers and expectations for a small market to be in that environment.

The cons of the entrepreneurs are:

· The business stays limited to a small market or resource-based outflows,

· The venture pursuits get somewhat very limited to come to a bigger market due to this bootstrapping of the venture,

· The investment flow is restricted for the entrepreneurs which may grow with the exposition of the idea beyond the boundaries when its bootstrapped,

· The assets, resources like the market are very limited which would make it count on the business for the long term.

The business of Nike makes its products from the South East market and sells it for a higher price to the European and American markets. There were several entrepreneurs those made good products but have bootstrapped due to the constrain of finance as there are 3 to 4 brands in the Vietnamese and Thailand’s local markets. The pricing is such that is well accepted but they have a limited budget to compete with Nike in international markets. This is the bootstrapping which these sportswear brands have condensed in themselves in the local markets.

                                                                                      


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