10

Transcript

Hello!! Friends after understanding the different types of entrepreneurs and different forms of entrepreneurs. In this class we will be making an effort to understand typology of entrepreneurial firms. So these typologies of entrepreneurial firms depend on two important aspects. That is the business growth rate and the business innovation rate. These two variables that is the business growth rate and the business innovation rate are guided by two variables that is low or high. What kind of situation will be emerging if there is low business growth rate and if there is low business innovation rate the situation that is going to emerge is identified as Economic Core. What are the characteristics that will be discussing later? The second situation that may emerge as the business is very high but there is no innovation as far as the innovation growth rate is looked. So then we come across the situation of Resource Constrained firms. So in case of the high business growth rate but the business innovation rate is very low we call it as the Ambitious firm. Where in the business is very high but the innovation is not at all there. On the contrary where in the forms which are defined as it glamorous firm wherein there is high innovation rate at the same time high business growth rate also. So these are the four different types of situations that we come across as far as the entrepreneurial firms are considered. The moment I begin with my own enterprise I may come across all these four types of situation. So where exactly I stand at this point of time and the situations may go on change from time to time. At times your growth rate as well as your innovation rate is also slow but there might be after the lapse of certain time you can come across a situation where the business growth rate is very low but the innovation rate is very high the similar types of changes in the situations that you keep on coming across. In each situation you need to identify where exactly I stand and what are the precautions and the things that I need to take up at that point of time so that is what is very very important for an entrepreneur and that is why we are discussing about the typology of entrepreneurial firms. The first situation wherein we said that the economic core firms very low innovation as well as low growth is there such firms come under this particular category. Basically the economic core firms are satisfying the owner’s desire for independence. He wanted to be any independent man, he wanted to be an entrepreneur and that is how he launched the enterprise on he’s keeping both the business growth as well as the innovation to the minimum possible extent and is continuing as an entrepreneur. At the same time these types of firms fulfill the specific need in a small market and it does not obtain a significant growth over a period of time because of lack of innovations. So the type of entrepreneurs when we discussed about the manager entrepreneurs almost qualify under this category wherein they in the initial stages they had high levels of innovation or they started with an innovation and they started with creating the business in the market and over a period of time they became the managers of their own firm. They don’t want to have any further innovation until and unless there is demand high levels of demand from the market and this type of firms we try to identify them as economic core firms. Coming to the second one the second typology is known as the constraint growth firms wherein the innovation rates are very very high but they lack the adequate resources for growth of their business venture but as far as innovation is considered so there might be such situations. So an individual has taken up an enterprise wherein he is highly enthusiastic, he has lots of ideas to implement but he’s not having sufficient support from the market or the investors. So that’s what is the situation where in the constraints growth firms that we come across. So when we analyze this constraint growth firms so there are two different groups that we can easily make them.

The first one is the firms that are unable to acquire the needed sources. Yes obviously it is maybe the entrepreneur is lacking one or the other quality and that is how he is not able to acquire the sufficient funds for his innovations to satisfy its innovations. So that is a different situation. Just to address to this type of situations we have a concept and that we will be discussing at length in the further classes is the venture capital the venture. The venture capitalists is in search of such an individual very wherein he can invest in an innovative idea and he’s not the, the venture capitalist is not having any idea what he’s having huge amount of money. But on the contrary there is an entrepreneur who is having lots of innovative ideas but he’s not having any money to invest to make his ideas a reality and that is how these people are coming together and we can easily overcome the situation like this. The second type of a situation that we come across is the firms internally make the decision to constrain the growth, because they don’t want to continue with that particular Enterprise and they want to either close it down or sell it out to somebody else in the similar direction. So that is why they are going to constrain the growth of their firm. Where in such companies or in such firms, such enterprises become very easy prey to better financed competitors. You might have observed the purchase of Nokia by the Samsung is one of such example that what we can give here. So then coming to the third type of entrepreneur firms which are ambitious in nature. In ambitious firms we said that the growth rate is very high but the numbers of innovations are very very limited. The growth rate is very high. It means people have accepted the product by a particular company and everyone is interested in having that particular product and that is how that firm is going to limit the number of innovations to add to that particular product because people have already accepted that. In a large market a single successful product can sustain high growth for many years and there are many such products that we can find in the market like Parle G biscuits. Parle G biscuits over a period of time there is not much change in the technology and it is having very high growth rate but there are no innovations. What happens in the long we said that it is going to sustain for many years but what happens in the long run, in the long run so there may be good number of new products that may come in the market and there might be good number of competitors that may enter into the market and accordingly if you do not make up your product to that particular level so then you may not be a successful competitor in the world. So that is how you need to be prepared even though you are ambitious you need not be complacent. The fourth type of firms that we come across is which are having very high growth rate as far as the business is considered under the same time they high rates of innovations also. While discussing the concept of the Empire builders who are also having the similar characteristics. Wherein the firms are using the technology and the branded firms which require regular updating and it is a continuous process, they never look back and they always keep on moving ahead and that is how they try to establish their empire and in this particular situation it is known as the glamorous firms. With this we have identified different types of typologies of entrepreneurial firms wherein the firms which are acting as the economic core or the ambitious or the glamorous or the resource constrained firms. With this we will be closing to today’s discussion and in the next class we will be discussing about what makes an entrepreneur? What are the factors that influence the entrepreneurial behavior of an individual?

Thank you”>