Survival Strategy for Startup Business

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This paper was conducted as a Discussion Board Post assigned by Professor J. Reinke of: Liberty University, Graduate School of Business, Lynchburg, Virginia 24515.

A new firm needs to make a trade off between performance and compatibility by employing an evolution strategy (offering a migration path) or a revolution strategy (offering superior compelling performance). A firm also needs to make a trade off between being an open system or a closed system as open technologies are popular but rewards are not as desirable as a proprietary technology holder. By using these strategies, firms in network markets approach by using one of the generic strategies from performance play, controlled migration, open migration and discontinuity.

Fall 2009 This case was prepared by Itir Karaesmen and Inbal Yahav of Robert H. Smith School of Business at University of Maryland, College Park. The names, locations, and other information included

Slowly he became market leader for that product. Entrepreneurship has been defined by several researchers as the progression of making a product or service valuable by gathering a distinctive set of resources and opportunities. This procedure comprises the set of accomplishments to recognise opportunities, business classification, evaluation and obtaining the essential resources, management and getting positive results. Furthermore, entrepreneurship has been seen as an organizational coordination that underlines the three extents: innovation, taking calculated risks and proactive orientation. There are many indications to provision the idea that the businesses which were engaged in entrepreneurial practices have been most effective and successful (Hills, Hultman & Miles, 2008).

Primary assumptions to the theory include, high barriers to entry and exit, high sunk costs and imperfect knowledge of the market. In addition, this paper will analyze the company’s current standing in the market along with competitive strategies executed to grasp a greater portion of market share.

For example In 2004 Branson was set to enter the music industry once again by diversifying into the online music industry through an online music store service just like Apple. He also released his own mp3 called the ‘Pulse’ that was to rival Apple’s Ipod. Unfortunately he closed both products later that year due to the fact that Apple kept releasing new products that made the ‘Pulse’ outdated with Apple’s high brand awareness, Virgin found it difficult to rival a large market leader therefore caused them to retrench and withdraw their product. This shows that although diversifications seem the best strategy for profitable growth, it does pose many risks especially when entering new unfamiliar markets.

Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.

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The corporate strategy of the business diversification is to create a synergy to achieve more performance under a single umbrella rather than diverse business units (SNU, 2016). A business diversification is to build the company shareholder value when the independent business units can perform under a single corporation as an umbrella organization instead of independent parents or a corporation. A diversified organization has many business units and each business units have its own business level strategy irrespective of whether they are related or not. A successful business diversification not only spreads the business risk across the diverse units but also adds a long term economic value to the company. The strategy for starting a new business is based on industry attractiveness test, the cost of entry and the better off test (Thompson, Peteraf, Gamble, and Strickland, 2016).

Diversification: Developing new products in new markets can be a riskier strategy given the unproven market place. However, if innovation is a business value it may be worth the risk as long as you understand what’s at stake.

Next disadvantage is that market pioneers will face market and technology uncertainties, which is a primary reason of failure for startups. Lastly, a shift in customer’s needs is required in order to create demand for the market pioneer’s new product or

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Threat of New Entrants – The threat of new competitors entering an industry is high when initial