lifecycle of an entrepreneurial venture

8/12/2019 Lifecycle of an Entrepreneurial Venture

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Presented by

Group 1


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ENTREPRENEUR: The term entrepreneur has

been derived from the French word

entreprenere means to undertake a business

venture. Entrepreneurs are simply those whounderstand that there is little difference

between obstacle and opportunity and are able

to turn both their advantage. Niccolo

Machiavelli.


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ENTREPRENEURSHIP: It is the process of

creating something new, with value, by

devoting the necessary time and effort,

assuming the accompanying financial,psychic, and social risk, and receiving the

resulting rewards monetary and personal

satisfaction and independence.


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The new venture process begins with an idea for a

product, service, or business.

The environment is the most comprehensivecomponent in the venture creation process. It

includes all the factors that affect the decision to

start a business. for example government

regulation, competitiveness, and life cycle stage.


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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 theventure is more sophisticated with

competition and dilemmas. At a certain

stage, you need to decide whether to do

more innovation or allow decline.


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Life cycle of entrepreneurial firms: Birth stage

Breakthrough stage, Maturity stage, decline

stage. Each stage poses different managerial

challenges and requires different managerialcompetencies.


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New venture development stage

Start up stage

Growth stage

Stabilization stage

Innovation or decline stage.


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Creativity and assessment, Resource base

analysis, Networking including marketing,

developing Vision, Mission, Objectives,

Strategies & Tactics.


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Formal Business plan ,Searching for capital

(Analyze the risks), marketing research,

Developing a working team, Identifying any

core competencies for CompetitiveAdvantage.


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Increased competition, High bargaining

power of customers, Saturation of the

market.

The entrepreneur needs to think where willthe business be in the near future It is a

stage preceding a great dilemma: to innovate

or exit the business.


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Without innovation the clear option is

death Possibility of acquiring or being

acquired Might design new products for new

markets (Diversification).


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. It is more likely to represent spikes of

growth and contraction rather than rounded

peaks. For example many small businesses

have relatively few customers, so that the

addition of one new significant client will

lead to a sudden growth spurt. Conversely,

the loss of one large client can significantly

shrink the size of the business.


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The transition from one stage to another

does not necessarily take place in the order

predicted by the model. Economic or trade

cycles outside the control of the firm may

contribute substantially to the growth or

decline of an enterprise at any time

irrespective of the stage of development.


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The contention that the transition from one

stage to the next is triggered by a particular

kind of crisis has not been tested through

empirical research. The development of an

enterprise is likely to be subject to many

different internal and external variables so

that isolating one primary cause for the

evolution of a firm from one stage to another

is an over simplification of a very complex

process.


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Many enterprises reach a stable size and

never make the transition out of this phase.

Once they have developed a business to a

stage of survival, life-style entrepreneurs will

have little motivation to grow it further.

Some take deliberate steps to avoid growth

which they see as threatening the very

independence they sought when they created

the enterprise.


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lifecycle of an entrepreneurial venture

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