Chapter 17 Pace to Lead the Industry Flashcards
(25 cards)
What are the three speeds to account for when leading an industry?
The speed of cash and cash flow, the speed of the market, the speed of competitors.
What are the consequences of growing too fast?
You may run out of cash.
What can happen if you grow too slowly?
You could be beaten by fast-growing competitors.
What are some key growth-related questions?
- How to grow
- How fast to grow
- How to finance the growth
What are the key external factors behind the right growth rate?
- Speed of the market
- Growth rate of direct competitors
What can happen if too much money is spent to grow before customers are ready?
It can waste valuable resources.
What internal factors are crucial for growth?
- Cash flow
- Cash availability
What can seeking to increase cash flow by raising prices do?
It could stifle current growth.
What should entrepreneurs do to succeed in growth management?
Balance all key factors.
Why is timing important in business growth?
Customers do not show up just because you have opened your doors.
What shape do sales of new products and services often grow in?
The shape of a hockey stick.
How long does it typically take for a start-up to take off?
At least three years, often longer.
What strategy did Tim Doherty implement during a recession?
He started Doherty Employer Services, a Human Resource Outsourcing organization.
What lesson did Tim Doherty learn from his initial losses?
To adopt a more realistic, less costly marketing approach.
What do customers usually need before adopting new products?
Time to understand benefits and risks.
What are some factors influencing the rate of adoption of new products?
- Product/service cost
- Benefits
- Risks
- Ease of understanding
- Testability
What realization did Brett Shockley come to about his product sales?
He would not get a quick sale due to the complexity of corporate coordination.
What is crucial when an industry begins to take off?
Be aware, alert, and ready to act.
What is one of the most difficult decisions in business expansion?
Knowing when to add overhead.
What can happen if businesses expand before customers are ready?
It can destroy the company.
What did Lloyd Sigel do when demand for his products increased?
He expanded rapidly after demand showed up.
Why did Pierre Omidyar seek venture capital for eBay?
To dominate the emerging industry of Internet auctions.
What should a business consider if its core business is maturing?
Expand to other growth opportunities or sell the business.
What did Bonnie Baskin do when the clinical testing portion of ViroMed reached maturity?
She sold the clinical portion and spun off the industrial testing.
