Entrepreneurship Research. Management Decision

Question: Discuss about the Entrepreneurship Research for Management Decision. Answer: The external analysis of the Critical Mix Company is performed with the help of three well efficient analytical tools (Boons Ldeke-Freund, 2013). These are Niche Strategy analysis, Strategy analysis, and Porter's Five Forces analysis. With the help of these three tools, the external environment that is the potential and existing opportunities as well as threats before the company can be analyzed. This will help the company to design further business strategies for future growth. Niche Strategy: A niche strategy of marketing can be characterized as a subset of marketing strategy, which is primarily focused on a specific product (Audretsch, 2012). Under this strategy, the specific features of a product are defined in order to address the needs of a focused market along with the range of price, quality of production and the demographics it is planned to impact on. From the overall examination of the Critical Mix Company, it can be said that the company does not have a protective niche. According to Bargiela-Chiappini, Nickerson and Planken (2013), the market research industry is a large industry where a number of similar firms operate. It is quite natural that each company may claim their products or services to be unique in some characteristics and differ from the other products in terms of quality. The products and services provided by the company not at all different, however, it designed to address a specific market segment. Therefore, it is necessary for the company to design a protective niche strategy that will help the company to address the targeted market segment (Boons Ldeke-Freund, 2013). The differentiation strategy adopted by the Critical Mix Company is not a niche strategy. It a monopolistically competitive market, where there is a large number of firms operating in a same market by producing the similar commodity which slightly differentiated, a minor differentiation strategy may not be helpful there. Therefore, it is needed that the company should diversify its products in a broader sense (Carraher Paridon, 2015). That is by using different technologies and, providing results in a short time compared to its competitors etc. The Critical Mix Company is therefore, suggested to focus more on the methods and techniques it uses for its products and services rather than designing a niche strategy. This will help the company to operate profitability. Strategy Analysis: According to Chen, Chiang and Storey (2012), the profitability of a firm is primarily determined by the attractiveness of its operating industry and the secondary determinant of the profitability is the positioning of the firm within the industry. However, an industry may have return that is below the average but a firm optimally located within the industry may accrue higher returns. A firm generally determines its positioning by leveraging its strengths. According to Carraher and Paridon (2015), the strengths can broadly fall under two broad categories that are the cost advantage and differentiation. The application of these strengths give rise to certain scopes either broad or narrow, as a result of this three generic strategies emerge: cost leadership, differentiation and focus. The firms at the unit level apply these strategies; these are called the generic strategies because these do not depend on the industry standards. The strategies are depicted with the help of the diagram below, Figure 1: Porters Generic Strategies (Source: Collis Hussey, 2013) Critical Mix clearly adopts the strategy of cost leadership that is the low cost producer for a given level of quantity in the concerned industry (Morgan, 2012). The firms are faced with two potential alternatives in the case of cost leadership strategies. Either firms can sell the products at the average market price in order to gain certain profits or these can sell the products below the average market price to gain market share. By adapting the strategy of cost leadership, the Critical Mix has enabled itself to continue its production profitably while there is a price war going on the market. However, even if there is not a price war, in the long run the prices of the products will fall. Then also, the firms, which are able to produce at a cheaper cost, will be able to accrue profits (Pache Santos, 2013). Porters Five Forces Analysis: Porters' Five Forces Analysis is another analytical tool to examine the external environment of the company. It mainly concentrates on the forces of the suppliers, buyers, barriers to entry or exit, substitutes, and rivalry. Figure 2: Porters Five Forces Analysis (Source: Collis Hussey, 2013) According to Audretsch (2012), the supplier power is concentrated in the cluster of the suppliers and the number of suppliers in the economy. If there are a large number of suppliers in the economy, it is quite natural that they will have the power to influence the market. However, the Critical Mix Company has decided to produce at a lower cost and therefore, it is evident that the customers will rely upon them for the cheaper and good quality products. Hence, it is important for the company to maintain a better relationship with the suppliers. According to Garca-Morales, Jimnez-Barrionuevo and Gutirrez-Gutirrez (2012), if there are barriers to entry in the market that can potentially transform an economy to a monopoly. On the other hand, if there is a barrier to exit that will also affect the business behavior. In the case of Critical Mix, there is no barriers to entry in the market and a significant number of potential competitors are there in the market. Therefore, it can be said that the company is faced with a potential competition from the rival firms. The buyers power of bargaining is included in the buyers power, if the number of buyers is significantly high in the market, the bargaining power of the buyers will increase. Moreover, an identity about the brand of the company will also be created (Turner, 2013). As the company does not have a niche strategy, it is more likely that the customers will be able to possess more bargaining power. However, if the company produces at a cheaper cost, it will be able to meet the demand by providing the products and services at a lowest possible market price. Substitutes of the concerned products and services also affect the business operation of the company. However, Critical Mix is faced with a significant competition from its rival firms, therefore it is essential for the company to design strategic framework, to survive this competitive environment. According to Turner (2013), as the firm is faced with significant rivalry, it should differentiate its products in an efficient manner this will help the company to design products that contain the uniqueness in its core features. Service of the company compared to the other companies is a factor that also influences the performance and profitability of the company. The Critical Mix provides a quick and efficient service; therefore, it is in a better situation (Wixom Watson, 2012). Reference List Audretsch, D. (2012). Entrepreneurship research. Management Decision, 50(5), 755-764. Bargiela-Chiappini, F., Nickerson, C., Planken, B. (2013). What is Business Discourse? (pp. 3-44). Palgrave Macmillan UK. Boons, F., Ldeke-Freund, F. (2013). 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