Small start units
Encyclopedia
The word Small Start Unit (also called small start-up, or SSU) emerged as a business term to address small entities that are going to launch an innovative and specific business model
in the market place. This not only on a larger geographical scale, but also with a vantage in technology they offer. In combination that gives them a sustainable competitive advantage
, which they play off against (major) market competitors right from the beginning. SSU's are mainly of Western origin.
The promising business model of a Small start unit is likely to attract venture capitalists . Such VCs
supply SSU's with needed capital for the get-go. With this capital SSU's are able to set up the headquarter in their home market, typically a well-developed market in a Western country. Despite the disadvantage of higher costs, their competitive advantage enables them to generate new jobs in the home market by employing high-end engineers, marketing professionals and well educated managers.
Basically the characteristic of an SSU is: 1. The core competency
resides in a future technology; 2. The aim is to operate on a global scale right from the beginning; 3. There is a high growth orientation within the firm; 4. A flexible network is related to them, consisting of internal and external stakeholders; 5. It is able to fragment mass markets into niches; 6. Technology is built on open source
technology; And 7. products are brought to markets rapidly.
By pursuing a global approach SSU's do not only exploit emerging and lucrative selling markets, but also lower their costs and boost profits more quickly by embedding their business partner in emerging markets
(see George S. Yip) into their value chain. SSU's take advantages out of emerging markets as well as Western markets. So globalization
allows SSU's to become long-lasting and successful business entities.
Business model
A business model describes the rationale of how an organization creates, delivers, and captures value...
in the market place. This not only on a larger geographical scale, but also with a vantage in technology they offer. In combination that gives them a sustainable competitive advantage
Sustainable competitive advantage
Competitive advantage is defined as the strategic advantage one business entity has over its rival entities within its competitive industry. Achieving competitive advantage strengthens and positions a business better within the business environment....
, which they play off against (major) market competitors right from the beginning. SSU's are mainly of Western origin.
The promising business model of a Small start unit is likely to attract venture capitalists . Such VCs
VCS
VCS may refer to:In gaming:* Atari VCS, the first successful video game console to use plug-in cartridges instead of having one or more games built in...
supply SSU's with needed capital for the get-go. With this capital SSU's are able to set up the headquarter in their home market, typically a well-developed market in a Western country. Despite the disadvantage of higher costs, their competitive advantage enables them to generate new jobs in the home market by employing high-end engineers, marketing professionals and well educated managers.
Basically the characteristic of an SSU is: 1. The core competency
Core competency
A core competency is a concept in management theory originally advocated by CK Prahalad, and Gary Hamel, two business book writers. In their view a core competency is a specific factor that a business sees as being central to the way it, or its employees, works...
resides in a future technology; 2. The aim is to operate on a global scale right from the beginning; 3. There is a high growth orientation within the firm; 4. A flexible network is related to them, consisting of internal and external stakeholders; 5. It is able to fragment mass markets into niches; 6. Technology is built on open source
Open source
The term open source describes practices in production and development that promote access to the end product's source materials. Some consider open source a philosophy, others consider it a pragmatic methodology...
technology; And 7. products are brought to markets rapidly.
By pursuing a global approach SSU's do not only exploit emerging and lucrative selling markets, but also lower their costs and boost profits more quickly by embedding their business partner in emerging markets
Emerging markets
Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. Based on data from 2006, there are around 28 emerging markets in the world . The economies of China and India are considered to be the largest...
(see George S. Yip) into their value chain. SSU's take advantages out of emerging markets as well as Western markets. So globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
allows SSU's to become long-lasting and successful business entities.
External links
- SSU's are ready for globalization http://futuretag.com/blog/BlogEntry.2005-12-27.1607
- Success for Small start units http://www.urslerch.ch/smallstartunit/index.html