mngt 5650

need a question for a quiz answered in 1 hour ….

A start-up entrepreneur short on resources, but long on ingenuity and vision, sees an opportunity before others.  He establishes the market with first-mover advantages and sales begin to grow and the customer base increases rapidly – too fast for the entrepreneur to keep up (few resources).   Entry barriers are low, and switching costs are quite high, therefore speed in capturing the growing customer base is crucial to locking in repeat business.  However, speed-to-market is quite expensive.  The market appears to have strong growth and profit potential for an efficient company able to keep costs down, which will be crucial to long-term profitability given the high fixed costs of the operation.   The entrepreneur has very little production capacity, no company recognition, and a domestic supply chain with high costs. The fundamental strategic question is, should the entrepreneur attack (take out additional debt to increase plant capacity and economies of scale); defend (keep resources at the same level), or retreat (sell off when the inevitable large company approaches them with a buyout offer.)    1) Analyze the entrepreneur’s expectancy (10 points)  2) Analyze the market’s valence (10 points)  3) From your analyses, recommend a strategic resource decision – ADRA (5 points).

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