Submitted by: Submitted by letyciaamando
Views: 63
Words: 339
Pages: 2
Category: Business and Industry
Date Submitted: 09/29/2014 10:42 PM
Why do entrepreneurs fail to manage growth? (Entrepreneurial Skills such as product development vs managerial skills)
Limited time and resources to spend on efficient organization building
Why do organizations need entrepreneurial spirits as it grows?
Customer needs change
Competitors offer superior products or services
Economic conditions, politics, technology, etc. shifts create a constantly changing opportunity set
Start-up Versus Growth
Start-up: acquire resources, entrepreneurs do everything,
Growth: deal with systems, structures, and culture
Options for entrepreneurs (based on success of an venture and desire of the entrepreneur):
Sell
Maintain
Grow
Three Driving Forces: start-up versus growth
Start-up: entrepreneur, opportunity, resources, and business plan
Growth: leadership, opportunity domain, and organizational resources and capabilities, and execution
Both face uncertainties(competitor introducing a superior product) and environmental conditions
Growth potential is largely impacted by stakeholders
Execution
No adequate system of control: uncontrolled growth can lead to poor coordination between sales and inventory planning
Instituting controls: first simple
Accounts receivable and collections policies
Inventory management system
Account payable policies
Assessment of performance and expenditures
Metrics to track trends in cash,receivables,inventory, payable,expenditures, and performance
Marketing cost expands quickly with escalating sales
For analysis and future investment decision making:
Which products or markets generate the highest revenues and margins?
Which customers or customer groups are reliable accounts?
How effective are our expenditures in areas such as marketing and sales, and does it differ across markets?
Tracking Performance
use industry averages for comparison (more useful for established firms)
trends in metrics over time
performance measure should be as simple and inexpensive to track as possible...