Studying The Entrepreneurship Strategies Of Startups

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The entrepreneur is an individual who introduces something new in the economy- a new production method, a new product, a new source of raw material, a new market etc.       -(Joseph Schumpeter,1934)

An entrepreneur is the one who always searches for change, responds to it and exploits it as an opportunity. Innovation is a specific tool by which he exploits change as an opportunity, for a business or service.

                   - Peter Drucker (innovation and Entrepreneurship, 1986)

A true entrepreneur is the one who is endowed with more than average capacity in the task of organizing and coordinating the various other factors of production.

                                          - (Francis Walker, 1897)

The literature review is diverged in two- Starters and Acquires.

"There will come a time when big opportunities will be presented to you, and you've got to be in a position to take advantage of them." - Sam Walton, founder of Wal-Mart Inc.

"Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage." - Niccolo Machiavelli

"The entrepreneur is our visionary, the creator in each of us. We're born with that quality and it defines our lives as we respond to what we see, hear, feel, and experience. It is developed, nurtured, and given space to flourish or is squelched, thwarted, without air or stimulation, and dies." - Michael Gerber

The economist J. B. Say from French will shift the resources of economy out of the lower area and will send to the higher productive area with a greater yield. The definition is not revealing about the entrepreneur. And it has been created 200 years back, there has been a confusion about the definitions on entrepreneurship and entrepreneur. According to the United States, entrepreneur is the person who owns a small business. By these entrepreneur or the entrepreneurship will be represented by a small business.

Start-up Companies

Startup companies can be anything which can include a simple company. Startup company is that which looks forward for the growth, and the companies that are technology oriented. People who plan to invest in the newer companies are identified by the profile, scalability, and the risks involved. This means that these involve the low level bootstrapping costs, risk in a high level, and a high potential return. Startup that are successful will need less investment for parameters like capital, land, and labor compared to the established business. Startup usually have various options for funding the business. Startup companies can get help for beginning the operations exchanging the cash for the sake of equity purpose. This help can be received from investors of the angel and the firms like capital venturing. While in practice various startup are found by initiators themselves. Factoring is one of the option that will not be unique for the start up's. The important task while starting up the business is conducting the research for validating, accessing and developing the ideas and the concepts of the business that adds to the opportunities for establishing further understanding about the ideas and the business concepts and the commercial potential.

According to the Intellectual property attorney of McDonough, if the value of the company is based on the technology it uses it is equally important for the owners of the business for obtaining the intellectual property protection for the ideas of their own. In a news magazine The Economist estimated that for about 75% of the value for the companies based on US are based on their own property. The small companies value is based on the property of intellectual. Startup companies must develop the strategy to protect the capital. According to John L. Nesheim the startup companies that are associate with the newer technology will have high returns for the investors and the creators. Anyways startup companies have failure rates highly. According to a research the CEO's of the companies expect the stocks worth $6,500,000.

According to JAMES F. MCDONOUGH III a company might no more a startup company while it has milestones as in to profits, public trading IPO, existing as an independent entity through an acquisition. Companies may fail to work together. These patent assets of the start up wors are purchased by the patent trolls. These patents are taken from those companies and are assert these patents against the companies.

Acquisition Companies

An industry purchasing another one is also called as achievement which further can be known as takeover or invasion or conquest. An achievement could be very pleasant or aggressive. When it is ina friendly or pleasant situation, the organizations will help in discussions. If it is in an aggressive case, the target industries management might not have any knowledge about the takeover (Stahl, 2005).

The other type of achievement is exactly opposite where in it is the combination of an agreement which allow a private company to get publicity in a very shorter time span. (Lassen DEENITCHIN, 2006). This type of merger take place when a private company which consists a very powerful prospects and very keen to increase or improve their financial situation. Attaining the achievement successfully is a very difficult task, while different studies had shown that about 51% of achievements have not been succeeded. Most of the factors are involved at the time of results as achievement procedure is very difficult.

Buyer has to purchase the shares in turn buying the control of the company. Ownership of the company conveys the effectiveness of having control over the assets of the company. Since the company has acquired the ongoing concern as intact. This kind of transaction will carry all the possible liabilities accrued in the business and the risks the company will face with the commercial environment.

Target companies assets have to buy by the buyer. Through the liquidation or the dividend process the cash of the targets is received by the sell-off needs to be paid back. While the buyer buys the assets completely, the target company will be completely empty. The transaction is often structured as the purchased asset. This leaves the liabilities and the assets that are not required. This is more applicable where the liabilities are foreseen that might include the future, and the damaged awards like litigations over the damaged products, benefits of the employees, or the terminations of the employees, or the damages of the environment. The main disadvantage of this structure is the tax that many jurisdictions outside the United States that imposes on the transfer of the assets of the individuals. The structure of the stock transactions can be structured with the exchanges or with any other arrangements that can be free of tax, neutral with the tax, for both the shareholders of the sellers and to the buyers.

Managing Tension for Competitive Advantage

Think of today's organizations. Most of them face the challenge of changing frequently in order to meet the needs of those they serve, such as customers, suppliers, and shareholders? Indeed, for many organizations, using their resources and skills to change in ways that will create value for stakeholders, and perhaps especially customers, is becoming increasingly difficult.

The challenging nature of competing in a global environment creates several tension-filled questions for firms: In what markets should we compete? Should we offer standardized products across all markets or should we modify our products for local preferences? How much risk are we willing to accept to compete in markets with which we are not deeply familiar? What kinds of skills should we develop in order to become more innovative? The issues raised by these questions have the potential to create tensions in today's firms.

(Cappelli & Hamori,2005) All of these tensions (and certainly others) are important and demand careful consideration by those interested in organizational success. What is of interest to us, though, is a particular type of tension that the need to rapidly change creates for firms; specifically, the need for a firm to learn how to simultaneously exploit today that which it does well relative to rivals, while also exploring to determine what it needs to do to be successful in the future. In essence, this tension is between doing what is necessary to exploit today's competitive advantages and exploring today for innovations that can be the foundation for the firm's future competitive advantages. It is assumed that the ability to effectively manage this tension is rapidly becoming a key differentiator between maintaining organizational success and facing dwindling performance over time. The Fortune 100 annual survey rankings indicate that most firms do, in fact, find it difficult to sustain their performance over a considerable period of time. As evidence for this assertion, consider the fact that only 26% of the 100 companies listed in Fortune's 1980 ranking remained on the list in 2001.

Research Questions & Objective

The study aims to examine the difference in entrepreneurship strategies of starters and acquires and their motives. The way in which the opportunities are being recognized and achieved by entrepreneurs, the theories developed by the entrepreneurs to match the core competencies of the acquirers business. The study is carried out by quantitative data (case studies). The research monitor to identify and split opportunities, the degree of innovativeness and risk required to be taken by a entrepreneur.

Research Questions:

Organizational growth and Marketing analysis of both starters and acquires

Difference in entrepreneurship strategies and motives of starters and acquires

Measure of success after the acquisition had taken place

Risk factor involved in starters and acquires entrepreneurship

Methodology

This study is an exploratory qualitative study with a purpose to understand the similarities, differences and study the companies who were started on the basis of start-up firms and acquainted companies. The aim of the research is to provide grounding for future study.

The research strategy used is part case-study approach and part exploratory and descriptive study. As a part of the case study, there are two organizations which sell identical services but has diverged approach of start-up and acquisition. The exploratory and descriptive part deals with information on the entrepreneurship background, strategies, industry data, and some recommendations. The exploratory information is through literature search, press releases and certain interviews.

The study is a Cross sectional study, keeping in mind the time constraints and not indulging in a full Longitudinal analysis. Some information, like industry trends and growth, is secondary data calculated over a period of time.

Data collection methods used in this research is interviews and secondary data. The data is of qualitative nature. Though only two organizations are considered for review, but it has drawn lot of information to assess all the characteristics and strategies of entrepreneurship.

Some of the limitations of the research include not being able to analyze on bigger organizations due to time and mobility limitations.

Time Scale

Resource Requirements

The research will use qualitative methods, data analysis, and interviews. As major of the startup companies are through the success spree, at the certain level, they merge with other sectors to spread out in the global market. Keeping an eye over the above, the research also includes exploring the previous fiscal year statistics or later which can help to know their past and current stats. So, Case studies of few industries would be taken up during the research for deeper analysis for few key strategies adopted and implemented by them.

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