Managing Enterprise Growth Flashcards
What are the types of Enterprise Growth Strategies?
Growth strategies are:
1. Penetration strategy – market penetration, by motivating the existing buyers to purchase more of the existing products, commonly through promotion.
- Market development strategy – new geographic market, new demographic market, new product use.
- Product development strategy – experience as the source of knowledge on the issues with the existing technology and possibility for better service.
- Diversification strategy – top-down integration, bottom-up integration, horizontal integration.
What is the Penetration strategy and what is the example?
Penetration strategy – market penetration, by motivating the existing buyers to purchase more of the existing products, commonly through promotion.
Penetration strategy(example) – by increasing marketing budget, the existing buyers are motivated to switch to better skis more.
What is the Market development strategy and what are the different types?
Market development strategy – new geographic market, new demographic market, new product use.
Market development strategy(example) - South American market entry and sales in the opposite season against other Northern Hemisphere markets.
What is Product development strategy and what is the example?
Product development strategy – experience as the source of knowledge on the issues with the existing technology and possibility for better service.
Product development strategy (example)– selling new products, such as hats, gloves and ski boots to the buyers who had already bought skis.
What is Diversification strategy and what is the example?
Diversification strategy – top-down integration, bottom-up integration, horizontal integration.
Diversification strategy (example)– Production of ski manufacturing equipment, control of retail shops for ski equipment, partnership with skiing destinations.
What are the Financial challenges in Enterprise Growth?
Financial challenges refer to the ability to maintain financial stability of enterprise.
Cash flow management– during the growth, outflow may overcome inflow, thus the entrepreneur must have current estimate of his cash status.
Stock management– too much stock may trap cash, since enterprise pays for production, transport and storage.
Fixed assets management– equipment requires maintenance and insurance, with operational costs. Value loss through time.
Cost management– comparison between real and estimated costs, calculating net revenue at breakpoints throughout the year.
Taxation– pay in favor of the appropriate funds for mandatory taxation and contributions each month, which is a major pressure.
Data storage – accounting data, data on buyers, modern technologies are necessary.
What are the Human resources management challenges?
Human resources management challenges refer to the ability to provide and keep quality and
productive workforce.
New enterprises usually cannot afford the luxury of human resources department to recruit employees.
The majority of these decisions is being made by entrepreneur, possibly with another important employee.
Some entrepreneurs use professional recruiting companies, such as the National Employment Agency.
During the growth, entrepreneur must determine the number of full and part time employees, which is a very difficult decision.
Promote participative management style, where the manager includes employees in decision making process.
Very important thing for enterprise operation is to establish team spirit.
Open and frequent communication with the employees builds confidence and eliminates fear.
The entrepreneur should provide regular feedback to the employees, in order to provide for improvement of assigned tasks performance quality.
Delegating responsibility is another important factor in human resources management.
Permanent training for employees increases their skills and competences and opens up the space for increase in their success in tasks performance.
What are the challenges for entrepreneur referred to time management efficiency and entrepreneurs workload?
Time management is the process of individual productivity improvement by more efficient time
use.
Increase in productivity means that the entrepreneur will always have time to do the most important things. Increased productivity means that the important tasks are being done, which on the other hand increases job satisfaction of entrepreneur.
Working hours will be better spent and enable entrepreneur to improve interpersonal relationships with individuals inside the company and beyond. Efficient time management decreases tension and pressure due to deadlines and negative feelings. By decreasing overload and tension, psychological and physiological pressure on mind and body is decreased, thus bringing better health to the entrepreneur.
How Actual Growth can be achieved?
Actual Growth - possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses - entrepreneurs who are the most likely to achieve firm growth
What is the example of Unused Potential for Growth?
Unused Potential for Growth - possess the necessary abilities for transition but do not aspire to
do so - entrepreneurs that have unused potential - lifestyle entrepreneurs can develop and grow a substantial business but choose to pursue a low-growth business that satisfies their personal lifestyle choice rather than attempt to maximize personal wealth.
What is the example for Constrained Growth?
Constrained Growth - aspire to grow their businesses but do not possess sufficient abilities to
successfully satisfy this aspiration - entrepreneurs are most likely to be frustrated by the firm’s lack
of growth and are in the most danger of failure because the firm may be pushed toward the pursuit
of growth opportunities and beyond the entrepreneur’s ability to cope.
What is the example of Little Potential for Growth?
Little Potential for Growth - possess neither the necessary abilities to make the transition to a more professional management approach nor the aspirations to grow their businesses - these
businesses have little potential for growth, and due to the limited abilities of the entrepreneur to
manage growth, these firms may perform better if they remain at a smaller scale.
