Lesson 3. The Enterprise Life Cycle Flashcards
First, determine the environment in which it is to be placed. Second, assess the opportunities
that may reckon the business to stay long. The important activities in this stage are research on the
historical, current and prospective performance of the industry and allied industries in which the
business will belong; evaluation of the potential demand and supply situations of the product and the
raw materials that go with the products services; and determination of the market opportunities,
organizational needs, policy requirements, labor situations, technology and other important factors
directly related. to the business being put up. Here, clearly. determine the opportunities and risks that go
with the prospective enterprise.
Environmental Scanning and Opportunity Assessment
The alternative could be lined up in pros and cons format, decision tree application or cost and benefit evaluation. The choice may be subjected to these particular feasibility assessment areas: market
position, production capacity and requirements, financial needs including price position, organizational
and legal structures, financial, community and environmental returns and impacts. At this stage, you
must decide if the business is to be pursued or not. A decision to go ahead and commit resources
eventually leads to the next stage.
Evaluation of Alternative
This phase requires you as an entrepreneur to deploy resources so that the business can be
established and implemented. The decision made in the second phase are all put into realities such that
specific activities like purchasing material requirement; organizing. sites, locations and offices; devising
operational. procedures and guidelines; hiring and placement of personnel; and activating the enterprise
by doing pilot operations are all done. After all the pre-operating activities have been implemented, the
business is set to run full blast. In this phase, it is important that problems and loopholes are identified,
resolved and provided with solutions before the business eventually move to the next stage.
Implementation Phase
In this level, the enterprise is at its peak of operations and at its earning stage. As such, there are
certain standards to be maintained or further developed so that the enterprise stays long in the
competitive market. Technical efficiencies, profit levels, human resource welfare, funds management,
marketing mix, resource control and organizational culture are some of the important aspects that
should be maintained as criteria to upkeep the full. commercial operations of the enterprise. At this
stage, full market acceptance has been gained and it truly successful, market dominance is attained.
Commercial Operation
This level is the commercial stage but in different paths. This is so because at the commercial stage, the business may find areas of strengths to be pursued, opportunities to be explored, weakness to
be stifled and threats to be challenged.
Expansion, Integration, Contraction and Consolidation
Pursued when the enterprise increases its production and operations capacity
to cover larger market due to very high demand and later on ease out smaller competitors.
Expansion path
Entails the enterprise to cover and control the source of material requirements
(backward integration) or the processing, value-adding and final consumer marketing (forward
integration). It may also cover the horizontal and vertical links of the industry chain.
Integration path
Undertaken to concentrate on identified strengths so that it stays
focused, saved from its own diseconomies, less complicated and more dedicated to their end consumers.
Contraction path
Makes the enterprise more streamlined. It
can be revisited and reviewed such that it becomes a leaner and meaner organization.
Consolidation path
When the enterprise finds itself nearing its end, there is a need to do something.
Reorientation, Reorganization, Rehabilitation and Re-engineering
Reposition its products/ services and redefine its market.
Reorientation
Wherein the management authorities are redefined, policies are enhanced,
procedures and structures are redrawn and thus renewed management people are deployed.
Reorganization
Measures are undertaken when the issue of demise focuses on external
assistance in terms of needed capital, new financial sources and additional investments.
Rehabilitation
Undertakes a more detailed study before changes are done and adopted in one
or two problem areas or in extreme cases, all areas of the enterprise. These measures are undertaken to
save the enterprises from closing. That is, If the enterprise is wanted to be saved, but if not, then it is
given the go signal to declare bankruptcy culminating to its end.
Re-engineering
