Strategic Issues in

Entrepreneurial Ventures
and Small Business
Introduction
 In India, a unit with investment in plant and
machinery up to Rs 10 million is regarded as a SSI
undertaking.
 Although the meanings of the terms “small
business” and “entrepreneurship” overlap
considerably, the concepts are different.
 The small-business firm is independently owned and
operated, not dominant in its field, and does not
engage in innovative practices.
 The entrepreneurial venture, in contrast, is any
business whose primary goals are profitability and
growth and that can be characterized by innovative
strategic practices.
The entrepreneur is a
Strategist
 A person who organizes and manages a
business undertaking and who assumes
risk for the sake of a profit, the
entrepreneur is the ultimate strategist.
 He or she makes all the strategic as well
as operational decisions.
 All three levels of strategy – corporate,
business, and functional – are the
concerns of this founder and owner /
manager of a company.
 strategic planning
practices in small-business
firms are
 Not enough time
 Unfamiliar with strategic planning
 Lack of skills
 Lack of trust and openness
Strategic Decision making
process for entrepreneurial
ventures
1. Develop the basic business idea
2. Scan and assess the external environment
3. Scan and assess the internal envt.
4. Analyze the strategic factors
5. Decide go or not to go
6. Generate a business plan
7. Implement the business plan
8. Evaluate the implemented business plan
Sources for Innovation
1. The unexpected success or failure or an event
can be a unique opportunity.
2. The Incongruity: it is the difference between
reality and what everyone assumes it to be
3. Innovation based on Process need:
4. Changes in industry or market structure
5. Demographics
6. Changes in perception, mood, and meaning of
the society
7. New knowledge in science (coco-cola was
born when doing some medical Research)
Factors affecting the new
venture success
 Industry structure
 Entrepreneurial characteristics
 The ability to identify potential venture
opportunities
 A sense of urgency
 A detailed knowledge of the key areas to
success in the industry
 Access to outside help to supplement their
skills, knowledge, and abilities.
Five stages of
Entrepreneurial
development
 Existence (to get customers)
 Survival(got customers, additional
capital is needed)
 Success (Sufficient cash flow, and
growth)
 Take-off (incorporated company)
 Resource Maturity (from small to
large company)
Strategic Issues in Not-for-
Profit Organizations
Introduction
 Not-for-profit organization include private nonprofit
corporations (such as hospitals, institutes, private
colleges, and organized charities) as well as Public
governmental units or agencies (such as welfare
departments, prisons, and state universities).
 Why Non-for-profit? Society desires certain goods and
services that profit-making firms cannot or will not
provide. Eg: roads, police protection, museums, and
schools.
 Non-for-profit organizations are the one which is formed
with the ultimate objective is to provide service to a
society (not profit as a primary objective).
Sources of revenue for
non-for-profit
organizations
1. Government
2. Sponsors
3. Clients (service recipients)
Usefulness of strategic
management concepts and
techniques
 Some strategic management concepts
can be equally applied to business and
not-for-profit organizations, whereas
others cannot.
 SWOT analysis, mission statements,
stakeholders analysis, and corporate
governance are, however, just as
relevant to a not-for-profit as they are
to a profit-making organization.
Impact of constraints on
strategic management
1. Service is often intangible and hard to
measure,
2. Client influence may be weak
3. Strong employee commitments to
professions may weak the loyalty to the
orgn. employing them.
4. Resource contributors may intrude on the
orgn’s internal management
5. Problems on the use of rewards and
punishments may result from constraints
1,3,4.
Popular not-for-profit
strategies
1. Strategic Piggybacking: it refers to the
development of a new activity for the not-for-
profit orgn. that would generate the funds
needed to make up the difference between
revenues and expenses. (railways generate
profits through many ways other than operating
trains – canteens, rental revenues etc).
2. Mergers:
3. Strategic alliances: involve developing
cooperative ties with other organizations.
Strategic Issues in
Managing Technology and
Innovation
Introduction
 Gillette’s Mission statement says “we will invest
in and master the key technologies vital to
category success”.
 Hallmark, “we believe that creativity and
quality-in our concept, products and services
are essential to our success.”
 Intel, “To succeed we must maintain our
innovative environment. We strive to embrace
change, challenge the status quo, listen to all
ideas and viewpoints, encourage and reward
informed risk taking, and learn from our
success and mistakes”.
Process in Innovation
 Environmental scanning
 External scanning for technology developments
 Market research
 Internal scanning of resources for innovation R&D
 Strategy Formulation
 Product versus Process R&D
 Technology sourcing
 Strategy implementation
 Developing an innovative entrepreneurial culture
 Evaluation and control
Organizing for Innovation:
Corporate Entrepreneurship
Strategic Importance
Very Uncertain Not
Operational Important Important
Relatedness
Unrelated Special Independent Complete
Business Units Business units Spin-off
(sell off)
Partly New Product New venture Contracting
Related Business Division
Department

Strongly Direct Micro New Nurturing and

Related Integration venture contracting
Department
(SBU)