What is the average size of a company in the industry?
Objectives Examine industry structure, with a focus on company size, in the context of entrepreneurial industry status Explore the impact of average company size on your success as an entrepreneur
The Opportunity Analysis CanvasTM Industry Condition Entrepreneurial Motivation Competition Entrepreneurial Mindset Industry Status Industry lifecycle Industry structure Opportunity Identification Entrepreneurial Behavior Value Curve Macroeconomic Change
Defining company size “the average size of companies (employees, resources, etc.) within an industry” Capital intensity Advertising intensity Company concentration Average company size
The “ideal” competitor size Industries with a small number of small-sized competitors present the preferred scenario for new ventures Competing with a few small competitors is more advantageous for entrepreneurs versus competing with many large competitors
Ways to grow bigger faster cheaper Outsource Not always offshoring Legal, accounting, technology, marketing, etc. Partnership Share in the risks and rewards Joint venture Formal, on-going partnerships
Summary on industry status New ventures perform better in younger industries with immature industry structures Less competition versus established industries Capital intensity and advertising intensity are often low in young industries, and it is affordable for new entrants to enter and compete effectively Young industries also offer a common learning curve amongst all competitors, and a more even playing field for competition