ENTREPRENEURSHIP

VENTURE LIFE CYCLE

Key Issues about the Venture Cycle
There are static and dynamic forces which
need a special attention of the entrepreneur
Entrepreneur needs to manage for changes
and not changes
The growth stage of the venture is more
sophisticated with competition and dilemmas
At a certain stage, you need to decide whether
to do more innovation or allow decline
The Entrepreneurial Company in the
Twenty-First Century
Major Challenges:
Building dynamic capabilities that are
differentiated from those of emerging competitors
Internalutilization of the creativity and
knowledge from employees
Externalthe search for external competencies to
complement the firms existing capabilities.
Stages of the VC - Model
There are five key stages (just typical)
(i) New Venture Development
(ii) Start-up Activities
(iii) Growth of the Venture
(iv) Stabilization
(v) Innovation or Decline

Life cycle stages
New venture development Stage
Creativity and assessment
Resource base analysis
Networking including vertical marketing
Vision, Mission, Objectives, Strategies &
Tactics
Start-up Stage
Formal Business plan
Searching for capital (Analyse the risks)
Marketing research
Developing a working team
Identifying any core competencies for
Competitive Advantage
Growth Stage
Any modification on the operating strategy
Positioning and re-positioning
Knowing more details about he competitors
(Survival of the fittest)
Understanding the Growth Stage
Key Factors During the Growth Stage
Control
Does the control system imply trust?
Does the resource allocation system imply trust?
Responsibility
Creating a sense of responsibility that establishes flexibility,
innovation, and a supportive environment.
Tolerance of failure
Moral failure
Personal failure
Uncontrollable failure
Change
Understanding the Growth Stage
(contd)
Managing Paradox and Contradiction
Bureaucratization versus decentralization
Environment versus strategy
Strategic emphases: Quality versus cost versus
innovation
Confronting the Growth Wall
Successful growth-oriented firms have exhibited consistent
themes:
The entrepreneur is able to envision and anticipate the firm as a larger
entity.
The team needed for tomorrow is hired and developed today.
The original core vision of the firm is constantly and zealously
reinforced.
Big-company processes are introduced gradually as supplements to,
rather than replacements for, existing approaches.
Hierarchy is minimized.
Employees hold a financial stake in the firm.
Unique Managerial Concerns of Growing Ventures
Community
Pressures
Distinction
of Small Size
One-Person-Band
Syndrome
Time
Management
Growing
Venture
Continuous
Learning
Stabilization Stage
Increased competition
High bargaining power of customers
Saturation of the market
The entrepreneur needs to think where will
the business be in the near future
It is a stage preceding a great dilemma: to
innovate or exit the business
Innovation or Decline? stage
Without innovation the clear option is death
Possibility of acquiring or being acquired
Might design new products for new markets
(Diversification)
Conclusion
ALL STAGES ARE STRATEGIC POINTS OF THE
VENTURE HENCE A NEED FOR SPECIFIC
STRATEGIES FOR EVERY STAGE!
Finally
Building the Adaptive Firm
An Adaptive Firm
One that Increases opportunity for its employees, initiates
change, and instills a desire to be innovative.
How to remain adaptive and innovative:
Share the entrepreneurs vision
Increase the perception of opportunity
Institutionalize change as the ventures goal
Instill the desire to be innovative:
A reward system
An environment that allows for failure
Flexible operations
The development of venture teams