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Alternative strategies for commercializing new technology or products : building a new plant or acquiring an existing one? / Adebisi B. Aboyade-Cole.

by Aboyade-Cole, Adebisi B.

Entrepreneurship -- United States -- Case studies

High technology industries -- United States -- Management

New business enterprises -- United States -- Management

Venture capital -- United States

87 leaves : ill. ; 29 cm.

Thesis advisor(s): Curtiss Peck.

Committee members: Robert Hankes, Dr. Bruce Thompson.

Literature review -- Entrepreneurship defined -- Hypothesis -- Theories of entrepreneurial strategies -- Case 1: Palm Computing -- Innovation strategy issues -- The value creation in innovation entrepreneurship -- The resource development model -- Resource pyramid of value creation -- Alternative strategy -- Historical performance of new technology start-ups -- Results of the study on ten failed start-ups -- Interesting finding about the success and failure rates -- Alternative strategy for start-ups -- Competitive strategy - factors that make high-tech startups successful -- Case 2: TCA Cable TV Inc. -- The value of a superior supply chain -- Case 3: Icon Acoustics Inc. -- Case 4: Williams Field Services -- Financial and business outcome per case and strategy -- Comparison and insight of the strategies -- Theories -- The insight about venture capitalists -- Formula for start-up success -- Some contributing factors to a successful start-up other than the strategy.

This thesis describes multiple strategies for bringing new technology to market. It addresses the questions: Is it better to build a new manufacturing plant from scratch or to acquire an existing one? These questions were researched because of the high failure rate reported for new technology start-up firms.

The dismal performance of new technological start-ups is alarming. This moves one to wonder if all these technological ideas are merely wasted for lack of sound implementation strategies. One school of thought seems to blame the poor performance on a poor strategy of building a new plant where most of the capital is used up without good results. Another school of thought argues that a modification of strategy to invest in a used plant for the implementation of a technology better serves the vision by conserving the capital for other incidentals. The timeframe to market of any product or service is critical; hence, the vehicle driving the idea to market by way of the product must be effective.

The fastest commercialization strategy cannot accommodate delays in zoning, regulatory bureaucracy, supply-chain problems, process malfunction, staffing problems or inadequate funding because infrastructure costs can be higher than expected. These are some of the overriding factors that deny the entrepreneur precious time, and ultimately, business opportunity. Conversely, all the infra-structural cost and the system operational costs are better contained under a bulk expense, which includes the price of purchasing an existing and operating plant that meets the needs of the project at hand. It is imperative, however, that the facility’s integrity is not compromised for effectiveness, meaning that a less expensive facility must not be purchased with the hope of making it fit the job at hand.

The risk is drastically lower when an operational system is acquired. In this situation, there should not be any surprises, assuming that proper research is done up-front before acquiring the plant. The total cost is known up front, including any refurbishment that may be necessary. Acquisition of an existing plant looks like a better strategy to make the vision successful. A better approach to such a purchase may be the acquisition of an experienced crew along with the package in order to prevent any future troubleshooting problems. The quickest way to determine the feasibility of the start-up is to get as close an estimate as possible of the operation, from the purchase of the facility to getting the product on the market.

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