By G. Young
A pragmatic ebook which goals to aid engineers, and different technical pros, who locate themselves with the chance to run their very own company as marketers
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Extra info for Designing Businesses : How to Develop and Lead a High Technology Company
Receptiveness to innovation An industry with a customer base which is receptive to new ways of doing things can give opportunities to a new entrant. The office supplies industry has, for example, been changed in recent years by the development of superstores, as a new class of entrepreneurial small businesses has been prepared to be innovative in its purchasing of office supplies. Emerging standards If a standards battle is raging in an industry, a company may be forced to take sides and risk becoming the loser.
Basically, it helps if companies that want to leave an industry can do so easily. If 22 Designing businesses they stay unwillingly in the industry, they can price close to marginal cost and keep overcapacity in place, thus damaging the business environment for all participants. Exit barriers may come from having large amounts of dedicated capital equipment, an inability to close a plant based on social or government factors, etc. If one is looking to enter an industry, one has to form some views as to how the industry will develop over time.
Several scenarios can be examined, and perceptions of how the industry might evolve based on several sets of assumptions. Some of these sets of assumptions will give a very favourable environment for the proposed venture, while others will encourage examining alternative possibilities for coping with downside or pessimistic scenarios. Entrepreneurs or managers are betting their future or career on a venture whose value will only be determined some years from now, so they must make some judgment as to the likely business environment.