4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 1/10MODULE 6.1Growing the VentureIntroduction:Now that the organisation has launched their product or service, whathappens next? Good entrepreneurs will spend time ensuring their businessventure is set up for long term success. This includes being clear on theircore capabilities, using benchmarking as a means to measure where theyare compared to other factors such as competition and identifying growthstrategies.Identifying Core CapabilitiesIn order to grow a venture, it is important that its core capabilities orcompetencies be identiÕed. Hisrich (2014) deÕned core capabilities asindependent systems of content and process knowledge and capabilitiesthat have been built up over time (p.203). He suggests that it is best whenthese core capabilities are not easily imitated or transferred. These areoften strategic and are the source of the competitive advantage of theventure.BenchmarkingCompanies use benchmarking as a way to compare key metrics to otherbusinesses in the industry. This allows companies to see how well they areperforming and identify ways they can become more competitive in theindustry (Study.com, 2018, p.1).4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 2/10There are two primary types of benchmarking internal and externalbenchmarking:1. Internal benchmarking: this is a comparison of practices andperformance between teams, individuals or groups within anorganisation,2. External benchmarking: this is a comparison of organisationalperformance to industry peers or across industries.Rowley (2014) further broke these down into three categories and explainedthem as follows:1. Internal benchmarking: this comparison among diverse functionswithin the company helps to determine how eÞciently processes arecarried out between divisions and is good for rationalising processeswithin an organisation to make them internally consistent,2. Competitive benchmarking: this kind of benchmarking is the onepeople normally think of when they hear the term benchmarking. Itis a comparison of the processes of ones company with that of onesdirect competitors. It is not just used for improving by using the bestpractices of competitors; it can be used to identify similar processesin a competitor,3. Functional benchmarking: this takes processes and compares themnot with the processes of other competitors within the same industry,but across industries as well. This requires processes that, of course,are not speciÕc to an industry, but are used within the overall sector,for example, a comparison of the average number of annual traininghours required of employees. Here what you are doing is expandingthe scope of the inquiry into what best practices are, and you are infact widening the playing Õeld of examples to learn from.Growth Cycle of the VentureThe Corporate Finance Institute (2018) identiÕed Õve keys stages in the lifeof a business. These can be seen in the Õgure below and are explainedbeneath it.4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 3/10Figure adapted from CFI. (2018). Business Life Cycle. Retrieved fromhttps://corporateÕnanceinstitute.com/resources/knowledge/Õnance/businesslife-cycle/1. Phase One: Launch during this phase, sales are generally low, butslowly increasing. Businesses focus on marketing by advertising theircomparative advantages and value propositions. However, asrevenue is low and initial start-up costs are high, businesses tend toincur losses in this phase. In fact, throughout the entire business lifecycle, the proÕt cycle lags behind the sales cycle and creates a timedelay between sales growth and proÕt growth.2. Phase Two: Growth in this phase, companies tend to experiencerapid growth. As sales increase, businesses start seeing proÕt andoften pass their break-even point. During growth, cash Öow generallybecomes positive resulting in an excess cash in-Öow.3. Phase Three: Shake-out during shake-out, sales continue toincrease, but at a slower rate usually as a result of market saturationor entry of new competitors.4. Phase Four: Maturity when the market matures, sales begin toslowly decrease. ProÕt margins get thinner, while cash Öow staysrelatively stagnant. However, it is important to note that many4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 4/10businesses extend their business life cycle during this phase byreinventing themselves and investing in new technologies andemerging markets. This allows for companies to repositionthemselves in their dynamic industries, and hence refresh theirgrowth in the marketplace.5. Phase Five: Decline in the Õnal stage of the business life cycle, sales,proÕt, and cash Öow all decline. During this phase, companies accepttheir failure to extend their business life cycle by adapting to thechanging business environment. Firms lose their competitiveadvantage and Õnally exit the market.Growth StrategiesWhen you are just starting out, it is nearly impossible to compete withlarger, more established companies through traditional methods, whichmeans that you need to get creative in order to grow your company quicklyand eàectively. Newlands (2014) suggested the following strategies, whichcould entice potential customers to become loyal and even long-termcustomers.Oàer Something for Free People love free, which is why givingsomething away to new users is a quick and easy way to increaseyour fan base,Set Up a Referral Program Businesses ranging in form and functionfrom local yoga classes to the online storage startup Dropbox haveused referral programs in the past, and to much success. WhenDropbox was in its earliest days, for example, it oàered upgradedstorage amounts to each referral party pending their sign up with theservice. Once both users signed up for Dropbox, they received anextra 500MB of storage, free of charge. Just by oàering this,Dropboxs user base went from 100,000 to over 4 million in just 15months.Go With Exclusivity People always want to feel like they are a part ofsomething thats special, which is why exclusive invitations or oàerswork extraordinarily well as growth hacking strategy. Look atPinterest, for example. When Pinterest was Õrst getting started, it wasinvitation-only, but allowed users to request an invitation if they4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 5/10wanted to join. After requesting an invitation, Pinterest sent out anemail to prospective users explaining that the waiting list was quitelong, but that eventually, they would be accepted to join. Pinterestgrew from 100,000 users to over 70 million, proving that exclusivity isan incredibly eàective way to drive growth.Platform Hacking Capitalising on the success of another platform orbusiness is a great way to grow your own. Try to Õnd a way to workwith other relevant platforms, businesses, products, or services.Thats one way that YouTube got so big, so quickly by allowingMySpace to embed their videos without having to pay for the service.YouTube took on the costs of hosting in exchange for increased brandrecognition and ended up winning out.Methods for Growing a VentureBeiderman (2015), co-founder and CEO of Catalant suggested seven steps todeveloping a growth strategy to ensure an organisation is sustainable. Hesuggested a good plan should contain the following seven components:1. Es
tablish a value proposition this was discussed in Module 2 andshould be the point in which you continue to come back as anentrepreneur. Always remember what makes you relevant,diàerentiated and credible? Use your answer to explain to otherconsumers why they should do business with you. For example, somecompanies compete on authority Whole Foods Market is thedeÕnitive place to buy healthy, organic foods. Others, such asWalmart, compete on price. Figure out what special beneÕt only youcan provide, and forget everything else. If you stray from thisproposition, youll only run the risk of devaluing your business.2. Identify your ideal customer Maintaining the problem you are tryingto solve for a certain audience as the reason why you got intobusiness, you need to remember who is that audience? Is thataudience your ideal customer? If not, who are you serving? Nail downyour ideal customer, and revert back to this audience as you adjustbusiness to stimulate growth.3. DeÕne your key indicators Changes must be measurable. If youreunable to measure a change, you have no way of knowing whether its4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 6/10eàective. Identify which key indicators aàect the growth of yourbusiness, then dedicate time and money to those areas.4. Verify your revenue streams What are your current revenuestreams? What revenue streams could you add to make yourbusiness more proÕtable? Once you identify the potential for newrevenue streams, ask yourself if theyre sustainable in the long run.Some great ideas or cool products dont necessarily have revenuestreams attached. Be careful to isolate and understand the diàerence.5. Look to your competition No matter your industry, your competitionis likely excelling at something that your company is struggling with.Look toward similar businesses that are growing in new, unique waysto inform your growth strategy. Dont be afraid to ask for advice. Askyourself why your competitors have made alternate choices. Are theywrong? Or are your businesses positioned diàerently? Theassumption that youre smarter is rarely correct.6. Focus on your strengths Sometimes, focusing on your strengthsrather than trying to improve your weaknesses can help you establishgrowth strategies. Reorient the playing Õeld to suit your strengths,and build upon them to grow your business.7. Invest in talent Your employees have direct contact with yourcustomers, so you need to hire people who are motivated andinspired by your companys value proposition.In this weeks material, we have reviewed some key areas which supportgrowing a business post launch. I hope these help you to understand that asan entrepreneur you cannot drop the ball once your venture has beenlaunched, you need to stay focussed and support your business to grow!References:Best Practices. (2018). About Benchmarking. Retrieved fromhttps://www.best-in-class.com/bestp/domrep.nsf/insights/what-isbenchmarking-deÕnition-types!opendocumentBiederman, R. (2015). 7 Key Steps to a Growth Strategy That WorksImmediately. Entrepreneur. Retrieved fromhttps://www.entrepreneur.com/article/2408534/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 7/104 hoursCFI. (2018). What is the Business Lifecycle. Retrieved fromhttps://corporateÕnanceinstitute.com/resources/knowledge/Õnance/businesslife-cycle/Hisrich, R. (2014). Advanced Introduction to Entrepreneurship, EdwardElgar Publishing Limited.Newlands. M. (n.d.). 4 unbeatable Growth Hacking Strategies forStartups. Inc. Retrieved from https://www.inc.com/murraynewlands/4-unbeatable-growth-hacking-strategies-for-startups.htmlRowley, J. (2014). Six Sigma The three types of Benchmarking.Retrieved from https://4squareviews.com/2014/10/20/six-sigma-thethree-types-of-benchmarking/Study.com. (2018). What is benchmarking? DeÕnition, Types, Process& Examples. Retrieved from https://study.com/academy/lesson/whatis-benchmarking-deÕnition-types-process-examples.htmlEssential Resources:Constable, K. (2015). 5 Mistakes Successful EntrepreneursDont Make Twice. Retrieved fromhttps://www.entrepreneur.com/article/241689This article discusses Õve things that successful entrepreneurs wouldnever do again on their journey to starting and growing a business.4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 8/10Emert, C. (2017). Your Startups Growth Strategy Starts withBrand Strategy. Retrieved fromhttps://www.emotivebrand.com/startup-growth-strategystarts-with-brand-strategy/This article discusses the importance of a brand strategy whenconsidering a growth strategy. The article also includes some pitfallsan entrepreneur should be wary of which could impact the growthpotential of a new venture.Study.com. (2018). What is Benchmarking? DeÕnition,Types, Process & Examples. Retrieved fromhttps://study.com/academy/lesson/what-is-benchmarkingdeÕnition-types-process-examples.htmlA video, which provides a simple explanation of the deÕnition, types,processes and examples of benchmarking.Best Practices. (2018). About Benchmarking. Retrieved fromhttps://www.best-inclass.com/bestp/domrep.nsf/insights/what-isbenchmarking-deÕnition-types!opendocumentThis short but powerful article will provide you with a thoroughunderstanding of Benchmarking. I encourage you to also explore thelinks attached in this site that explain Performance and StrategicBenchmarking and Applications and BeneÕts of Benchmarking.Learning Activities:Learning activities are not part of summative/graded assessment; however,they are designed to prepare you for incremental graded assessment andexpand your learning. These activities encourage a community learningexperience between peers, and provide opportunities for facilitators to oàer4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 9/102 hoursformative feedback, throughout a module, to the student cohort. Studentsshould spend 1-2 hours per module on learning activities.Learning Activity 6.1: Group Discussion ReÖectionIn the module 6 discussion forum please discuss1. What topics in this course you enjoyed most? Why?2. What topic in this course did you least enjoy or struggle mostwith? Why?3. Has your understanding of Innovation, Creativity andEntrepreneurship changed? HowThe recommended word count is 300 400 words. You may like to useimages and diagrams. You are also welcoming to include factors thatmay not be explicitly stated but which you believe Õt within thecontext of the subject and are worthy of inclusion.To participate in the Discussion Forum, click here to scroll to thebottom of this page then click on the Module 6 DiscussionForum link.Learning Activity 6.2: Personal ReÖective JournalPlease go to the ReÖective Journal link in the mainnavigation menu and complete the activities in the journal instructionsfor Module 6.1This journal is for your own personal learning. It is conÕdential andwill not be available to anyone except you. Your journal will be animportant resource for preparing your submissions for assessments.4/15/2021 Laureate International Universitieshttps://laureate-au.blackboard.com/webapps/blackboard/content/listContent.jsp?course_id=_100594_1&content_id=_9717562_1&mode=reset 10/10Now that you have reviewed the material for Module, 6.1; Think of acompany or a product or service which you thought had a successfullaunch in the market but did not last long? Do you think that theycould have employed any of the strategies or considerations above tohelp them? If so, which ones and why?