Factors Responsible for Success
Describe about the Integrating Entrepreneurship and Strategic Management Actions to Create Firm Wealth?
Entrepreneurship is among vital procedure in the contemporary economy. In present time, the big companies are focusing more on commencing new initiatives related to entrepreneurship. This is done to maintain a competitive advantage with innovative ideas with fresh as well as finest talent. Smart firms are actively catering to aspiring entrepreneurs, enabling employees to pitch their concepts as well as providing funds for the same (Jovanovic & Lach, 1997). At the same time, aspiring entrepreneurs could acquire much knowledge regarding important lessons and develop expertise about adequate manner to run a business successfully, within the big company that is guiding these skills. In addition, working for a firm prior to commencing one's individual company holds great advantages. This is because a new entrepreneur has to consider all pros and cons to take right decisions, but an individual without any training would be less efficient to handle every bit of work. So, in this assignment, we would critically evaluate that how big companies with its employees having years of experience can put an aspiring entrepreneur on the right track to become a successful entrepreneur in the future.
Commencing a new business is a significant stage in any entrepreneur's life. But, prior to taking the prime step, one needs to have certain skills and consider essential factors that are requisite to flourish in the competitive environment. Basically, at the time an entrepreneur starts up a business, a great deal of work is needed for getting the desired results. In fact, there are several factors that eventually contribute to this ratio of success. The big companies, mainly appears to be appropriate here in providing training because they acquaint individual with real and pragmatic experience than what one has learned in the books. The positive outcome of working in the companies is that an aspiring entrepreneur who is like a raw soil becomes familiar with how the whole management is handled (Jones & Coviello, 2005).
Work organizing skills: An entrepreneur is the person who keeps a record of all forms including registration, potential suppliers and employees, business plan, finance and budgeting, time management and promotion (Kim et al., 2006). The tack about all the things is kept either in paper or by using modern technology like computers and laptops. If an individual is well organized, he can handle work related to all fields properly. The big companies who are performing tasks and dealing with abundant work can provide a good experience to aspiring entrepreneurs. The practical knowledge can teach ways and trains aspiring entrepreneurs to become organized (Keeble et al., 1998).
Relationship among Management Knowledge, Entrepreneur, and New Venture
Time management: Time management alludes to administration of time, effectually so that adequate time is allotted to an activity (Knight & Csgil, 1996). The study related to New Bain & Company depicts that lost time can result in the loss of millions every year. If an aspiring entrepreneur doesn't have the right time management skills, the company can suffer huge deficits. However, big companies like Dell, Amazon and American Express can guide a person to enhance the overall productivity for the business. The two conventional statements that states time and time wait for one as well as time is money are completely true. To have positive outcomes out of business, aspiring entrepreneurs can gauge knowledge about managing this infinite resource in the correct manner.
Building networks: Networking is a powerful strategy to escalate and maintain success in a new company. It is about developing connections and relationships with the right individuals and suppliers to expand the area of networking. Big companies are masters who have wide networking range. New entrepreneurs can learn the tactics to build and retain important networks that are required to be successful (Johansan & Vahlne, 1977).
Appropriate business plan: Every company needs a blueprint to carry out tasks in an adequate manner. An aspiring entrepreneur has to make a business plan that would encompass relevant points related to personnel requirements, marketing process, strategies and skills that are needed. But, a person without any understanding about real world cannot handle everything thoroughly. In fact, training on big companies can teach him the proficient and a dynamic business plan that is essential for an enterprise.
Controlling expenses: A business would be successful if aggregate income is higher than aggregate expenses. The expenses associated with production, promotion and other vital operations are inevitable. A beginner with no knowledge regarding the estimate costs needed in each operation can push the company in losses. On the other hand, working and acquiring knowledge regarding cost reduction can help an aspiring entrepreneur to save financial resources so they can be used in accelerating company's growth (Iyigun & Owen, 1998).
Management Knowledge refers to the strategies and approaches configured for identifying, apprehending, sharing and leveraging the intellectual strengths to improve the performance as well competitive power of a company. Today, with rise in intricacy level in the competition, entrepreneur is regarded as key asset for the enterprise. All companies require advance and innovative concepts that would take the company to new heights. Management knowledge is a basic essential source for an entrepreneur that can help to realize its exceptional significance in the market. Further, new venture and its performance depends upon the management knowledge that entrepreneur has in terms of market, available opportunities and relationships in and out the organization. Management knowledge, fundamentally, acts as an aid for the new venture to realize its areas of strengths, and the direction in which it should pursue its operations (Katz & Gartner, 1988). With this, impact related to the performance is also measured using these knowledge assets by entrepreneur in particular. Besides this, management knowledge is considered as the base of innovation which is perceived as the reason for the competitive advantage. If there is a good scale of competitive advantage, there is higher scope for new venture to be successful. Utilizing management knowledge in the new venture is not just about contemplating new products and services or enhancing their sales, it’s the knowledge associated with layouts and procedure of products, existing relationships in the company, consumer needs, market, business environment, and other organizational assets. Thus, there is an impervious bond among management knowledge, entrepreneur and new venture that needs provide coherent information regarding how a company can attain the highest level of the success ladder.
However, the complexity that exists in the above stated factors contributes in a huge manner to new business development as described below:
Customer needs: This is a core factor for a company that decides its success or failure rate. A strong customer base could be achieved if the entrepreneur has adequate knowledge about the requirements of the consumer buying the goods. Having proper feedback to know their common needs can develop a beneficial relationship among new venture and customers.
Organizational relationship: It is very critical for a new venture to have a positive and friendly working environment in the company. Entrepreneur can play a major role in development of a healthy environment at workplace. This would only happen if the entrepreneur has proper knowledge regarding the employees and suppliers with which they are working. This knowledge could be attained through formal surveys or by asking questions in informal way which provides an impression of how company is performing.
Market: While entering into new market, an entrepreneur needs to have a complete knowledge regarding market and the level to competition. The precise knowledge would lead to success while incomplete knowledge might act as hindrance in the path of success. The market knowledge includes products offered by competitors, their price, strategies adopted by them and level at which you need to compete.
Business environment: Change is the basic necessity that occurs in all organizations. But, a new venture has to keep a close check on the change that is occurring inside the organization because of extrinsic factors like technology, politics, economy, and society. A well informed entrepreneur about these transitions will help the company to grow in a positive manner, ignoring all the negative impact (Ireland et al., 2001).
As we have seen, that there are multiple factors which cone together for a success of a new venture. However, new venture has to confront many challenges and opportunities too. Different issues call for distinct solutions. Identifying and surmounting common pitfalls related to success is highly significant for a business to thrive in an expected manner. Whereas, effectual leadership can create new opportunities for the future. It is true that management of a new venture is more complex than the one which is existing and have to go through many critical stages.
Management thinking: For a new venture, management thinking is required or to comprehend the situation in a better way and ameliorate the process of decision making. An effective thinking can help the company to realize the strengths and potential of employees as well as company on the whole. This would help in focusing on the areas that need improvement, which in turn would help in the achievement of set objectives.
Concept: Entrepreneurs have important role that acts as fuel in the growth of new venture (McDougall, 1989). He is responsible to analyze the feasibility of concept that is chosen for the company in terms of productivity. This states that an entrepreneur needs to have proper skills, so a right concept fulfilling all demands and fitting all angles should be selected. In addition, pros and cons associated with the chosen concept needs to be analyzed in an exact manner.
Prototype: It refers to a sample which is produced prior to release of an actual product or for testing a particular concept. It is basically, configured to improve the precision level in the product that would be offered in the market. It caters specifications in a practical form rather than in theory. This is an important stage in the life of the product that lies between formalization and assessment of a concept.
Test: The prototype, thus created is then tested for the quality to understand all associated risks and strengths. This is done to know about the efficiency of the product that is going to be offered. For a new venture, it becomes more important to offer a product that is acceptable in terms of quality as it would decide the ultimate success rate of the company in future.
Scanning: This is a critical stage that a new venture faces where the product scanning is done to determine the cost and efficiency level which decides the future of all the hard work that is being put in the new venture (Knight et al., 2004).
Startup: Though there are many opportunities like demand among niche audience, huge market, several funding options and technology to create products, however, there are certain challenges that every startup needs to consider (Lu & Beamish, 2001). Today there is fierce competition in the market that every new venture needs to face. Secondly, if the product of the company gets acceptance, the demand graph rises in a quick and immediate manner, which will give rise to a need to hire pool of fresh talent. Also, with changing environment each day, the company needs to change and update its technological requirements and products too.
Early growth and penetration development: At this stage, new venture has to make crucial decisions that would help in the growth of the company. Here the measurement regarding the popularity of the product is done to estimate the demand level. For this, entrepreneurs should make correct decisions regarding sales and attract new customers. The opportunity here could be identified as the curiosity for new product in the population.
For having a consistent success graph, the company has to work hard each day. They should also male changes as required and give adequate importance to the feedback of the customers. Sometimes the product loses its consumer base due to lack of faults in efficiency that company should recover.
Re- positioning: Firms consider re- positioning when the there is declination in the demand of the product. There is a need to make moderation in target market for a product that has been launched before. For this, new plans have to be made and different strategies are adopted to focus a different sector in the market (Leiblein & Reuer, 2004).
Contingency plan: It is mainly leveraged for risk management which analyzes the risk associated with the situation. A company has to develop a plan for unusual situations that might rise in future.
Financial and HRM: For a new venture, managing costs as well as human resources is a big deal. Entrepreneur needs to hire a team suitable for the company that would focus on those departments individually and can report to him in a timely manner. Proper management would lead to success and inadequate management of these vital resources can leave negative effects on the success (Lumpkin & Dess, 1996).
Starting an individual company is a very captivating thought, where a person becomes his own boss. But, it is not that easy as it involves lots of challenges that need to be undertaken. Other than this, an entrepreneur should have proper knowledge about what is to be done and how it would be done. One wrong move can cost the company in a huge manner (Madsen & Servais, 1997)
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