Question

Assume that you are a young, motivated entrepreneur, hungry to start your own company and reach great success.

Of the following 4 entrepreneurial strategies, which one or combination of more than one, would you select in starting your business? Explain why you made that choice.   (You may also explain the product or service that your company provides since that may influence the choice of your strategy)

Growth

Innovation

Network

Financing and Governance

Answer 1

GROWTH

Start-Ups or firms always look for ways to grow their business and raise their sales and profits. There are various techniques that companies must use for executing a strategy. The strategy used by a firm to expand business is highly dependent upon its money situation, the competition and even government rules and policies.

Entrepreneurs Creating New Organisations ->

Trailblazing providings by businessmen, in form of new commodities and services, can produce a cascading effect by stimulating related businesses or sectors supporting the new venture, furthering economic development.

For example, a few IT companies founded the Indian IT industry in the 1990s as a backend programmers' hub. Soon industry got pace in the own programmers’ domain. But more importantly, millions from other sectors got advantage from it.

Businesses in associated sectors, like call center operations and network maintenance companies flourished. Education and training institutes nurtured a new class of IT workers who were offered better, high-paying jobs. Infrastructure development organizations and even real estate companies capitalized on this growth as workers migrated to employment hubs seeking greater livings.

Similarly, future development efforts in smaller countries require robust logistics support, capital investment from buildings to paper clips, and a qualified workforce. From the highly qualified programmer to the construction worker, the entrepreneur benefits a large part of the economy.

Some common growth stratgies in small scale firms are ?

• Market penetration
• Market expansion
• Product expansion
• Diversification
• Acquisition

1.Market Penetration

A small firm uses a market entering strategy when it agrees to market already-existing products within the similar market. Rising market share is the only way of growing through existing commodities and markets.

Market share is the share of unit and dollar sales a company acquires within a certain market when compared to all other rivals. The best way to increase the market share is by reducing the rates of the commodities.

2.Market Expansion

Market expansion is great growing strategy used, which is used to be referred to as market development that involves selling current commodities in a newer market. Competition arising may be such that there is no scope for growth within current market. If an entrepreneur is unable to search for new markets, then it is not possible to higher sales or profits.

3.Product Expansion

A small scale company can expand its line of products or add new features to increase sales and profits. When small companies use a product expansion technique, it is also referred as product development.

4.Diversification

Growth strategies in business involve diversification. By diversification, we mean a company selling new products in new markets. This type of strategy is highly prone to risk and losses.

A small company acknowledges the plan carefully while utilizing a diversification growth strategy. Marketing research is important to identify if consumers in the new market will potentially like as well as buy the new products.

Acquisition

Growth strategies or method to expand business also engages acquisition of other businesses. In acquisition, a company purchases another company to expand its functions. A small company uses this type of strategy to bolster its product line and enter new markets.

An acquisition growth strategy is riskier, but not as risky as a diversification strategy, as in this case the products and market are already authorized. A firm must have complete value of exactly what it wants to achieve when using an acquisition strategy, mainly due to the significant investment required to execute it.

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