Venture Life Cycle

Venture A VENTURE LIFE
CYCLE IS A
Life
METHOD TO
OUTLINE THE
B I RT H ,
Cycle
D E V E L O P M E N T,
AGING, AND
S U B S TA N T I A L E N D
OF A PRODUCT OR
S E RV I C E .
Formats for Venture Life Cycle
Format 1 Format 2
• Start up • New venture development
• Expansion • Start-up activities
• Maturity • Venture growth
• Diversity • Business Stablization
• Lifestyle • Innovation or decline
• Capped growth
Venture Life cycle Format 1
• Start up – They are new and emerging small enterprise with simple organizational
structure small businesses focus on a single product or service targeted at a defined
niche market . The real challenge is to develop and strength their resources once they
start to grow.
• Expansion – the business venture is slightly older, large, very central and more
formal than the startup. Growth is view in terms of increase revenues, stronger
management team and dominance in the market
Venture life cycle Format 1
• Maturity - these businesses are much larger, more formal and better organized at all
levels of the venture. There is a measure of comfort with its success and no strong
motivation to significantly change the business status quo.
• Diversification- business is established with departmentalized structure and organized
levels. There are specialized functions within the venture. An approach for a new and
better business offering is actively consider for growth and profitability. Creativity,
innovation and exploitation opportunties are driving force in a new business strategy.
Venture Life Cycle Format 1
• Lifestyle - these are businesses where the owners have decided to keep dear venture
small. These are mom and pop outfits or businesses operating in a very small markets.
• Capped growth - these businesses are large and older. They have reached a
comfortable stage of existence. Once there are no major threats or changes to the
external environment they are quite satisfied to remain in its present position.
• New venture development

• Start-up activities
• Venture growth
• Business Stablization
• Innovation or decline
• New Venture Development- at this stage, there are always creative ideas that the entrepreneur has
about how he would want his business to be. He or she has to do the assessment of each idea and decide
cheerfully which the better option is. He or she needs to do a resource based assessment. This model
sees resources as key to superior performance of new venture. Resource based assessment also called
resource based view [RBD). It is an approach to achieve a competitive advantage. The idea that the
entrepreneur has developed into a new venture must not only be creative but also innovative. By using
vertical marketing, the entrepreneur council specialized needs of particular market rather than a broader
market. At this stage also what the entrepreneur has decided what the vision and mission of the
company will be along with the strategies a this is notnd tactics that he will use accomplish these.
• Start-up Activities - at this stage the entrepreneur is creating a formal business plan.
The venture has a simple organizational structure and is searching for capital from
various sources. He or she is analyzing the risk associated with each source of capital.
The market research is also conducted here to determine if there is a market for the
product or service to be offered. Is
• Venture Growth - this stage often required a change in entrepreneurial strategies. The
increase in competition call for positioning and or repositioning of the business to
survive in the industry there are no new are more dominant problems than previously
at the startup stage. The leadership style also changes from here and entrepreneurial
style leadership to a managerial team leadership style. One of the best-known growth
models in the business is the Churchill and Lewis five stage model of growth
Churchill and Lewis five stage model of growth
• Business stabilization- At this stage, the stage of the business venture is a result of entrepreneurial
effort and market conditions. Several developments commonly take place such as increase competition,
high bargaining power of customer as they become indifferent to the product and service being offered,
as well as saturated of the market with look-a-like products. At this point, sales are stable and the
entrepreneur must start thinking of where he/she wants the company to be in the near future. The
dilemma of deciding whether to exist the market or to re-innovate exist at this stage.
• Innovation or decline – This is the final stage of the cycle and firms that do not innovate they ‘die’.
Ventures that are financially successful might consider acquiring other innovative firms in order to
ensure their own growth. Many entrepreneurs will work on product developments to complement their
current product offerings or work diversifying into new markets.

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Venture A VENTURE LIFE

• New venture development

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