Growth Strategies of Entrepreneurial Businesses: Evidence From Macedonia

Abstract

The research conducted by Stapford and Baden-Fuller (1990) showed that almost all analyzed enterprises invested in new equipment and organizational change. But, after some months, the results showed that not all of the businesses that made investment managed to survive. The reasons for failure varied for different situations, but most of all, they represent a result of failure to adapt and continuously innovate the enterprise strategy. Depending on the phase of the life cycle where they currently operate, enterprises use different strategies in order to compete successfully in the market. One of question that still remains unanswered is why some enterprises are more profitable than others. Porter (2004) considered that industry profitability results from the interaction of five competitive forces that he proposed, and that industry profitability depends from the impact of these five forces. But why then enterprises in the same industry differ in their profitability? Some research had pointed out that profitability inside the industry differs three to five times more than profitability between industries (Roos 2005). We propose that choosing the right strategy for the right moments has huge impact on enterprise profitability. This research is oriented toward enterprises that are in the growth phase of their life cycle. There are several alternative types of strategies that are available to businesses, but we will try to identify the growth strategies that will enable growth to enterprises.