In an article by Alan Davis and Eric Olson titled, Critical Competitive Strategy Issues Every Entrepreneur Should Consider Before Going Into Business (phew! long title!), differences between new ventures and established companies are revealed. These differences are important to evaluate, because most startups lack the resources necessary to develop a formal strategic plan. Maybe you can relate!
It is important to understand, the authors assert, that execution of a strategy and resources are inextricably related. This is because startup companies usually only develop a strategy when resources are needed, and a good strategy can help determine whether or not the entrepreneur will be able to attract resources. Additionally, investors in new ventures have greater expectations of risk and a slower reward than investors of established companies. So... don't create a strategy when you are in a bind!
The authors explain that the internal culture for startups differs from established companies, which help determine strategies. Entrepreneurs should capture the vision and goals that form the culture in a written and spoken format. It will help entrepreneurs to be successful if they are effective at capturing the strategy and culture in a 20-minute presentation and a 20-second elevator pitch.
Bottom line, whether a company is starting or established, it is important to have a strategy. A strategy will help an entrepreneur meet goals and investor demands.
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