Entrepreneurship as a Process
Entrepreneurship is a procedure in which a person starts, launch and run a new business venture by doing some innovation. Such people have some specialized knowledge as well as eagerness to develop, organize and manage the new venture. There is a reflection related to Module 1 in this paper that explains about ‘Understand Growth’. There are different approaches and theories related to the same that helps an entrepreneur to make the business grow. This would also include growth strategies that help in discussing if there is an ideal type growth strategy or model. A lot of dilemma has been created in growing economies due to the unavailability of space. Involvement of some individual companies in this topic would also make a part of the reflection.
According to me, there is an entrepreneur in every single person and it just about looking for the nearby opportunities. Entrepreneur inside us always think about the discrimination between exciting opportunities that a person can utilize for growth. Growing involves a risk factor in entrepreneurship because there are so many challenges to start a new business and make it survive in strong competitive market. As per my learning, growth is directly related to the employees, customers, revenues, liquidity and profit. In entrepreneurship, there are various barriers as well as hurdles that create hindrances in growth. I understand that an entrepreneur who possess a very strong knowledge regarding risks and takes them in a usual ways has higher chances of achieving the growth.
As per Carsrud & Bra?nnback, entrepreneurship is totally related to the growth and maximization of profits. It becomes easy with the help of judging good opportunities and getting all the resources together and capitalizes them to create an effective output. According to me, entrepreneurship refers to the process of organizing, conceptualizing and launching an innovative business in which a business is converted into a growing venture in the complex situations.
Entrepreneurship is totally different from a common business as entrepreneurship involves innovation and it includes potential to achieve high growth in a short time period. Entrepreneur ventures have a wide scope because they are open to bigger part of the market instead of a restricted market and they can create their own market as well. The small business ventures are very common and they operate in already settled market. In entrepreneurship, it is very difficult to achieve growth (Carsrud & Bra?nnback, 2007).
In this reflection, I have covered growth models and approaches that are highlighted in the literature. Mainly, there are two growth models which are in practice as of now. These are the most important growth models. First one is organic growth and the other one is growth by acquisition. Organic growth is also known as internal growth.
This growth actually happens when venture starts expanding the operations instead of depending upon the mergers. Growth through acquisition refers to a growth process in which a company acquires the other one for achieving growth. It is similar like taking over of control of an organization. These growth patterns are not random as they are highlighted by the exhibit of firms. We can say that these patterns related to the growth of the firm are comprehensive and distinct in nature. They are also related to demographic affiliation that has to be in systematic manner (Milligan, 2012).
Barriers to Entrepreneurial Growth
Entrepreneurial growth is a kind of growth that take place when growth is about to start. There are some cognitive processes handled by an entrepreneur that are responsible for enhancing the growth opportunities. There are different kinds of resources involved in every cognitive process for the achievement of growth (Nandram, 2007). In entrepreneurship, there are so many variables that possess the capability of enhancing as well as restricting the growth of small ventures in particular time duration.
There are so many findings of research done by different researchers and it includes that small business managers can become the major part for the development of the venture by contributing in an effective way. Managers have full power to take actions for encouraging employees in order to make the company expand and grow (Roy, 2011). Different authors also explain that there are some small firms that are performing really well and have an amazing growth in their strategic orientation.
The main strategic dimensions are innovation and proactiveness. Entrepreneurial ventures should concentrate more on the growth by aiming for the growing market instead of acquiring market shares from strong competitors. VRIN resources help a lot to the firms in getting different opportunities and enable them to allocate resources in an effective way for the growth perspective (Obebo, Wawire & Muniu, 2018).
Lockett et al. (2011) is an author who explained Edith Penrose’s theory of firm growth. This theory explains that the growth rate of the firm’s keeps fluctuating and it gets influenced by the cost adjustments of opportunities that are productive in nature. Author has also described that previous organic growth is considered as a barrier for the present organic growth. The overall conclusion of the acquisition growth and organic growth is that both of them are two different options that a firm can opt for. The growth of the future also depends upon the same.
There is a debate on the concept of growth and there is a discussion that companies should grow profitable or they should grow with the help of profits (Szerb, 2013). As per their concept, growth of any firm is considered as a positive thing and it is known as a sign of success. There is a hypothesis on the concept that companies that are growing effectively but they are not considering the profitability are less effective in long run in comparison to those who focus the most on profitability. There are some examples of different growth strategies related to big companies of the world (Corbett, Katz & McKelvie, 2015).
At the time of launching Sunsilk Shampoo by Unilever in US, they focused on market development strategy. There were no changes in the product for a long time period and it increased market potential of the product. In other case, when Diet coke was launched by Coca Cola, strategy adopted by the company was product development because it was a new product that was launched into the market (Fier, Liebenberg & Liebenberg, 2017).
There is an example of product diversification strategy as when GAP has introduced its Forth and Towne brand for women over the age of 35 then the market potential of the company automatically got increased because there was no brand of GAP that sell products for that age group. The topics that are related to the risk and benefits of the firm are really important to discuss. There is a big dilemma between growing economies of the world due to limited space (BUTLER, 2016). There are firms for which it is necessary to undergo the growth periods and they are considered as very turbulent because they carry different types of risks.
Growth Models and Approaches
In general, there are entrepreneurs who face different challenges in the path of growth as growth is considered as risky and there is an increase in the risk of failure due to stagnation. In such circumstances, companies are supposed to invest in different innovations for coping up with risk factors. In this way, risks can be mitigating in an easy manner and it leads to proper planning. Companies should act in an appropriate way for increasing growth opportunities. For enhancing growth, it is necessary to create a strong organizational culture and a network of all the stakeholders. By this, a company can easily start growing and founders can establish a connection with all the investors, customers and competitors. With the help of a large network, a firm can easily expand its operations and connect with new partners in new regions. It can increase the customer base as well (Hitt, Ireland & Hoskisson, 2017).
With the help of the whole analysis, there is a conclusion that there is not any typical growth model because there are different types of organizations with different patterns of growth. Growth has to be recognized and it is considered as a multidimensional process that can occur in various ways. Strategic planning is necessary because it is the core process that helps the organizations in the growth and success. There should be effective strategic planning so that every process can become so smooth. As per my thinking, an entrepreneur should prepare short term as well as long term plans for creating a vision of the venture as it helps in focusing toward an objective.
Structure of the company plays a vital role in the growth of the organization. A company cannot achieve growth if it does not analyses future possibilities and grab the right opportunity (Cahill, 2012). If I become a potential entrepreneur then I would prefer to become more flexible so that I will be able to work with the upcoming issues without affecting my long term goals. I would always try to create a strong communication network with all the stakeholders to maintain clarity between different processes. It will surely help my company to grow and make it profitable as well.
References
BUTLER, D. (2016). BUSINESS DEVELOPMENT. [Place of publication not identified]: ROUTLEDGE.
Cahill, D. (2012). Lifestyle Market Segmentation. Hoboken: Routledge, Taylor and Francis.
Carsrud, A., & Bra?nnback, M. (2007). Entrepreneurship. Westport, Conn.: Greenwood Press.
Corbett, A., Katz, J., & McKelvie, A. (2015). Entrepreneurial growth. Bingley: Emerald Group Publishing Limited.
Fier, S., Liebenberg, A., & Liebenberg, I. (2017). Insurer Growth Strategies. Risk Management And Insurance Review, 20(3), 309-337. doi: 10.1111/rmir.12088
Hitt, M., Ireland, R., & Hoskisson, R. (2017). Strategic management. Boston, MA: Cengage Learning.
Lockett, A., Wiklund, J., Davidsson, P. & Girma, S. (2011). Organic and acquisitive growth: re-examining, testing and extending Penrose’s growth theory. Journal of Management Studies, 48(1), 48-74.
Milligan, S. (2012). Marketing strategies. Delhi: Research World.
Nandram, S. (2007). Decisiveness and Opportunity Perception as Predictors of Entrepreneurial Growth. SSRN Electronic Journal. doi: 10.2139/ssrn.982837
Obebo, F., Wawire, N., & Muniu, J. (2018). Determinants of Participation of Micro and Small Enterprises in Microfinance in Kenya. International Journal Of Economics & Management Sciences, 07(03). doi: 10.4172/2162-6359.1000523
Roy, R. (2011). Entrepreneurship. Oxford: Oxford University Press.
Szerb, L. (2013). The Comparison of the Global Entrepreneurship Monitor and the Global Entrepreneurship and Development Index Methodologies. Foundations And Trends® In Entrepreneurship, 9(1), 1-142. doi: 10.1561/0300000046
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