Entrepreneurial Growth: Strategies and Limitations

This report discusses different growth strategies for entrepreneurs and their limitations. It emphasizes the importance of a well-planned business growth strategy and its impact on a company's revenue and competition. A case study on Alibaba is included. The report also covers the role of individual companies in this situation and the factors that influence business growth.

Running head: ENTREPRENEURIAL GROWTH
Entrepreneurial Growth
Name of the University
Name of the Student
Author Note

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The business growth model helps an organisation to expand its business in a competitive
market. It also provides a road map so that the entrepreneur can expand the business and can earn
profits. Hence, the concept of business growth is important for each entrepreneur. Moreover, it
helps an entrepreneur to compete with its strong competitors and helps to increase the profit level
of business. By applying this process, an entrepreneur can earn higher amount of revenue by
either producing or selling large amount of outputs or by lowering the production cost. Hence, an
entrepreneur can operate various business operations within a business cycle (Phelps, Adams &
Bessant, 2007). In this report, different types of growth strategies will be discussed. This report
will further discuss that whether those growth strategies are ideal for an enterprise or not. After
analysing those growth strategies, this report will also discuss on some limitations of those
growth strategies within a growing economies. At the end of this report, there will be a
discussion based on the role of individual companies in this situation.
There are various reasons for which an entrepreneur wants to expand her small business
into a large one. Making large amount of profit is one of the chief objectives of an entrepreneur
(Mazzucato, 2015). However, there are also some other reasons, which should be mentioned in
this context. It is seen that, small companies cannot survive in a competitive market, as it does
not have enough business strategies to compete with its competitors. Hence, a perfect business
strategy is required for every entrepreneur (Lockett, Wiklund, Davidsson & Girma, 2011). There
are some large numbers of industries, which have successfully applied their own business
strategies and have expanded their business all over the world (Ward, 2016).

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According to some famous business entrepreneurs, business strategies are almost like a
ladder. The entrepreneur will take less risk at the beginning of her business (Sadgrove, 2016).
Hence, she will face a lower rate of business growth as well. This lowest stage of growth strategy
is called intensive growth strategies (Muhos et al., 2014). Each stage of this strategy gives more
opportunities to an entrepreneur to grow her business (Davidsson, Achtenhagen & Naldi, 2007).
However, the probability of risk is also increased. Those stages of business strategies can be
analysed in details.
In this context, the article of Delmar, Davidson and Gartner can be analysed. According
to them, there are almost seven types of growth pattern of a firm. Those patterns are related with
age and size of the firm and its affiliation (Delmar, Davidsson & Gartner, 2003). They argued
that those patterns of firms to grow follow conflicting theories related to firm’s growth.
Wernerfelt in his journal showed that resources and products are same for a firm. Several
products need the services of various resources (Hunt et al., 2017). On the other side, most of the
resources are needed for products. By mentioning various activities of firm size of different
product markets, is possible to specify the minimum required commitments of resources
(Wernerfelt, 1984). On the other side, the firm can find out its optimal activities in product
market by specifying a resource profile.
It can be seen that, the market condition influences a producer to produce new products
for its new consumers. Hence, the entrepreneur can choose any one of the above mentioned
intensive growth strategies. However, it should be kept in mind that each step bears both efforts
and risks of an entrepreneur at the same time (Read et al., 2016). Favaro stated that companies
with high growth low growth. There are various CEOs, who accepted that their business has

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achieved a mature stage. Hence, they have stopped to look for big growth. They have given up
on organic growth and are making a big mistake (Favaro, Meer & Sharma, 2012). The
acquisition helps a firm to save its cost. When corporate leaders give the activity of organic
growth, an organisation can lose its focus.
Demir, Wennberg and McKelvie explained in their journal that growth of firms is an
important topic to research on the strategic management of an organisation. To understand the
growth of a firm, high-growth firms (HGFs) give some ideas. Some factors help a firm to grow
high (Demir, Wennberg & McKelvie, 2017). These are human capital, human resource
management, strategy, innovation and capabilities.
According to Greiner, history of firms can help an organisation to develop in future. As
each firm passes through various stages of development, those phases are very important.
Moreover, every phase starts with an evolution and ends with a revolution or management crisis.
By analysing the history of growth strategy, the management can takes decision to prepare them
for better future. In this context, five dimensions of to develop a business can be analysed (Grant,
2016). These are age of the firm, size of the firm, stages of evolution and revolution and growth
rate of the industry (Greiner, 1972). After analysing those dimensions, five phases of
development can be recognised to grow a business.
The business growth strategy helps an organisation to increase its quantity by extending
the scale of production. This can be happened by increasing the sale volume, share in the market,
production value, number of employees and profit (Drucker, 2017). The business strategy can
also enhance its quality by increasing the quality of the enterprise. This includes technological
innovation, organisational innovation and the optimal efficiency related to investment and

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output. Barney stated that understanding of sources for getting sustained competitive advantage
is an important area for conducting research for strategic management (Barney, 1991). Barney
stated that firms achieve their internal strengths from various environmental weaknesses. Hence,
maximum research on sources related to sustained competitive advantage has focused on
opportunities and thread of a firm. It also has analysed the way to choose strategies.
This business growth strategy helps an entrepreneur to grow her business within a
modern business environment. This physics of business strategy provides a road map to the
entrepreneur. This business growth strategy helps an entrepreneur to explore her static and
dynamic ways of business growth (Hatten, 2015). Sirmon, Hitt and Ireland stated that. The basic
goal of a business is to create and maintain value. The resource-based view (RBV) states that
resources of a firm lead value creation by developing competitive advantage (Sirmon, Hitt &
Ireland, 2007). The main and important part of a business is to choose a correct business
strategy. The entrepreneur can apply her business strategy by applying a formula. This formula is
Business Growth = Mindsets + System + Process (Hess & Liedtka, 2012). Hence, this growth
formula requires it’s all three elements, which are additive by nature. The concept of business
growth requires something more than a good business strategy. This growth strategy requires its
employees, managers and leaders to build the right mindset.
There are some limitations related to the growth strategy of an enterprise. The whole
incidents can be divided broadly under two categories. These are external and internal affects
(Achtenhagen, Naldi & Melin, 2010). Academic scholar and entrepreneur do not follow the same
point of view to analyse the business growth. The chief factors are labour and capital shortage,
market nature, capacity of the entrepreneur, nature of the industry and law of diminishing
returns. Each factor has a great influence on an entrepreneur. Hence, in these circumstances, the

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entrepreneur will improve its risk management, specialise its company outputs and increase the
vertical business strategy of her (Hill, Jones & Schilling, 2014).
To analyse the business growth model, a case study on Alibaba can be discussed. For an
entrepreneur, it is very difficult to expand a small business into a large one, in a competitive
business environment. Small business can be explained as will, aspiration and capacity of
innovation of an individual. In this digital age, technology can help a company to expand its
market. By applying this technology and some other business technologies, the company has
expanded its business successfully (Lowrey, 2015). It creates credibility, strong finance services
and rules of games.
In conclusion, it can be said that every organisation requires a perfect business growth
strategy. This growth strategy will help the entrepreneur to expand her business in the market
and to compete with its strong competitors. However, this business growth strategy also has
some limitations. Those limitations will reduce the outcomes of an organisation. It should be
mentioned that each stage of business strategy brings some risks of the entrepreneur. However, a
business strategy will be best if it provides well-planned road maps to the entrepreneur. It will
help a company to perform at a higher level and earn more revenue.

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