Final REview - Four Factors Influencing New Firm Success...

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Four Factors Influencing New Firm Success Knowledge conditions Demand conditions Industry lifecycles Industry structure 2. Demand Conditions: New firms do better in: Larger markets Rapidly growing markets More heavily segmented markets 3. Industry Life Cycle Conditions: New firms do better When industries are young Before a dominant design emerges 4. Industry Structure Conditions: New firms tend to perform poorly when: Capital-intensive industries Advertising-intensive industries Concentrated industries (versus fragmented industries) Industries composed of mostly large firms Advantages of Established Firms: Competence destroying change Discrete products and services Ideas embedded in human capital Breakeven Analysis Calculate the amount of sales you need to achieve to cover your costs Determine the increase in sales volume you need to have in order to increase fixed costs
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BEP in units = Fixed costs / Contribution
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  • Fall '06
  • PEREZ,P.D.
  • Corporation, new firms, limited partnership agreement, Concentrated industries, Partnership Act Partnership

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