As an entrepreneur toy with that one big idea, he / she will no doubt weigh the advantages and disadvantages in an effort to determine the feasibility of the ideas the biggest question that arises during this delicate phase. are large, entrenched, experienced, and too rich competitor threat continue? A lot of people in the business community believe that success is positively related to the size of the organization. In this growing world of drunken executive management of many entrepreneurs forget about the problems that coincide with the bureaucracy created by big business.
Since Andrew Carnegie perfected the practice of vertical integration, companies are implementing business models that take advantage of economies of scale. Their instincts lead them to that decision, but what is the cost of spending money and their spread thin due to growth? This article will focus on how small business efficiency, speed and innovative nature of the ultimate trump card of diseconomies of scale produces a large business. Greenhouse believes that large companies are sea turtles and the job given that they are always hiding in his powerful armor and move only when it will soon be killed since Howard Gleckman of Business Week believes that "the key role of entrepreneurs may be more similar to wolf. aggressive and skilled to cull out the old and sick. "New entrepreneurs must use their inner wolf and challenging business model has created a big business. Their size is your chance. How and why it is described below.
History of Big Versus Small Business
before 19 century, the small business standard is obvious. It was a time sewing machine, grain elevator, Morse code, and dishwashers. All the great entrepreneurial idea, but difficult tools of business conglomerates. The Industrial Revolution changed all through the rapid expansion of the country. Inventions for the time not only changed the world, but demands the management of large companies, not small. industry, which has paved the wave for a great job at that time were the railroads, automobile, construction, and telephone. these types of operations require extensive capital, human resources and experience. These are all things that big business could use, but small businesses could not 'T. After the war, the economy favoring big business and continues for about 40 years between 1958 and 1979, businesses with fewer than 500 employees earned a total lose market share to its larger counterparts:. decrease of 52% market share of only 29%.
Large companies are pushing the implementation of the strategy rather than pull, which means that only sell what they do with little-to-no market research and forecasting sadness. They were able to cope with the pressure of the strategy because the population was booming, and there is little competition. But then came the '80s. revolution driven by a desire for creativity shaken. technology and business-oriented changes in the environment conducive to small businesses. Finally, the power is back in the hands of entrepreneurs.
Catalysts for the Small Business Revolution
The short answer to the complicated question of why there was such a dramatic change in the business environment is technology. Technology is creating a barrier to entry for smaller, then they have ever been in the past. two great examples would be an overnight delivery service, which reduces the need for distribution centers and their corresponding holding cost. second and more important as the advent of the personal computer. invention is put power in the hands of the masses and allow newcomers to be more productive than ever before.
Distance and speed are no more obstacles on the way to the information through the Internet. In the decades before the personal computer data is considered a strength, and thus bought by large companies. This pricy information to be stored in an even more expensive manners. Even if technically owned by the information that is difficult to find exactly what you want out of it, let alone implement it in your plans.
geographical reach, we endlessly expand and for consumers and businesses. Online players to talk and play with other users on opposite sides of the world. At the same time corner store in Kansas City scour the country for international suppliers for the "mom and pop" businesses.
Few experts agree that in this day and age customers are the boss. Consumers are taking on greater roles to begin earlier and end later in the product life cycle. They are demanding customization and personalized service which ultimately makes a huge hole in the market that big companies can not fulfill.
Small Business works
"What amazes me in the United States is not so surprising richness of some of the innumerable multitude of small businesses." (Alexis de Tocqueville, 1835). As Tocqueville said that our economy works through the hands of many business owners, and not a few large companies. 1987-92 from small businesses created 5.8 million jobs where the companies that employ 500 or more people have lost 2.3 million jobs. But why? , What is it that young, inexperienced entrepreneur goes for those who are powerful and rich conglomerates do not ultimately boiled down to a small enterprise core competencies quickly to market, innovative, risk-oriented and technologically armed?.
Speed to market -. To describe this concept to visualize two people who both have the same idea for a new product launch is the first company with more than 500 employees, is another young entrepreneur fresh out of B-schools. For large companies first brought the idea of the upper management (who usually hate the good ideas coming from below), and then sent through research and development (which could take years), and then integrate into their current model without cannibalizing sales today, and then distributes through complex supply chains (which are formulated and agreed before the new ideas he was on the drawing board.) on the other hand, the young entrepreneur only needs to convince the ideas of values, develop the product on its own terms and schedule, develop a business model around the product (in place of some business model), and distribute it through a more efficient supply chains, an entrepreneur who feels comfortable with. The end result is that small business has the ability to get ideas from product conceptualization to actualization of light years faster than their large business counterparts.
Customer Knowledge - more business knows its customers better, it also means more than the typical demographic information in a large company of people who actually "touch" the customer are lower .. level employees. employees of the same with little-to-no power to act spontaneously, without references to the individual, no motivation to sell the company mantra, and probably not the right education in order to justify its position. Very often the entrepreneurial environment, a person touches the customer is an entrepreneur himself. So a person has more strength and motivation to satisfy the customer and provide more value.
innovation-Over 2.4 times more new innovative products on the market come from the hands of small businesses. Big business is big business for a reason. They found something that worked and grew because of him. This "if the shoe fits: deal" .. mentality gets stuck on the path of destruction a look at what happened with Blockbuster's market share after the video store Netflix redefined the model of what would happen if the Polaroid instant picture of calm, not branched out into new areas of business? It is ironic how creativity can be viewed as a four-letter words in a large company that was originally founded in this very space.
risk (the ultimate motivation) - The risk makes business work like dogs. Who will try harder to make the investment worthwhile, a person who spends money their bosses, or people who spend their children's college tuition?
internal business incubation
business incubation refers to the act of nurturing new business creation. This usually includes grants of between $ 2.000 to 100.000, office space, consulting, financing, and networking among other businesses. Big companies are starting to see the concepts of power by developing its own internal. inside incubators allow employees and outside applicants for the proposal to develop new business ideas within a large, innovative companies like Microsoft and Google.
Philips Electronics ($ 31 billion dollar company) is a system that allows its employees to pitch their ideas in the form of venture capital proposals to top executives in the company. This system is likely to put in place after they realized that their employees are getting their business ideas a life-changing, and then leaving the company to reap the rewards on an individual basis. Other large companies such as PepsiCo dish out stock options to every employee in the company, including to the janitorial staff to everyone and thinking and acting as an entrepreneur.
a fundamental difference between thinking
The biggest difference between the two types of companies is the way its employees attack the problem. Salary warriors who are doing a great job has a task based approach to their business models. This mindset is one of looking at each task to be completed individually as a one-time need to finish. No one with this mentality is asking why something works or is looking to the future to understand how finished the puzzle piece fits in the big scheme of things. On the other side of the process based on the perspective of integrating many aspects of the department or organization and determines how everyone can and / or should contribute to the business model as a whole. It is incredibly entrepreneurial inclinations and gets harder as the organization gets bigger It includes one of the best and most necessary features which the company carries: .. the ability to see the outcome ended up in the final state
Conclusion
As an entrepreneur it is up to you to take everything you have. It is important to understand the power that comes with the versatile and freethinking. Your job is to take advantage of opportunities left, leaving a great job of challenging themselves, not just to run your business, but also their lives in the same way that a good businessman does:. as a game.
Great job makes our economy work. They employ the highest in the world. They have invented products and services that changed the way we live. They have more money, experience, and then the brand new entrants. However, none of this changes the fact that they are successful and powerful company once started out as an entrepreneur and an idea. They were not scared. Why?
Works Cited
Edersheim, Elizabeth H. definitive Drucker. New York: McGraw-Hill, 2007
.Jam James Feldman "think like an entrepreneur to achieve growth, productivity." Sell ing (2003):. 2-10
