The word Small Start Unit (also called small start-up, or SSU) emerged as a business term to address small entities that plan to launch innovative and specific
business models
A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, social, ...
in the market place, -Not only on a larger geographical scale, but also with a vantage in technology that they offer- this gives them a
sustainable competitive advantage
In business, a competitive advantage is an attribute that allows an organization to outperform its competitors.
A competitive advantage may include access to natural resources, such as high-grade ores or a low-cost power source, highly skilled ...
, which they can use against (major) market competitors right from the beginning. SSUs are mainly of Western origin.
The business model of a Small start unit is to attract
venture capitalists
Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to start-up company, startups, early-stage, and emerging companies that have been deemed to have high growth poten ...
. Such
Venture Capitalists
Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to start-up company, startups, early-stage, and emerging companies that have been deemed to have high growth poten ...
supply the SSU with needed capital for the start-up. With this capital SSUs are able to set up the headquarters in their home market, typically a well-developed market in a Western country. Despite the disadvantage of higher costs, their competitive advantage enables them to generate new jobs in the home market by employing high-end engineers, marketing professionals and well educated managers.
Characteristics
The characteristics of an SSU are:
# The
core competency
A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel.Prahalad, C.K. and Hamel, G. (1990)The core competence of the corporation", Harvard Business Review (v. 68, no. 3) pp. 79–91. It can be define ...
resides in a future technology.
# The aim is to operate on a global scale right from the beginning.
# There is a high growth orientation within the firm.
# A flexible network is related to them, consisting of internal and external
stakeholders.
# Able to fragment mass markets into niches.
# Technology is built on
open source
Open source is source code that is made freely available for possible modification and redistribution. Products include permission to use the source code, design documents, or content of the product. The open-source model is a decentralized sof ...
technology.
# Products are brought to markets rapidly.
Goal
By pursuing a global approach SSUs not only exploit emerging and lucrative selling markets, but also lower their costs and boost profits faster by embedding their business partner in
emerging markets
An emerging market (or an emerging country or an emerging economy) is a market that has some characteristics of a developed market, but does not fully meet its standards. This includes markets that may become developed markets in the future or were ...
(see George S. Yip) into their value chain. SSUs take advantage out of emerging markets as well as Western markets. So
globalization
Globalization, or globalisation (Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20t ...
allows SSUs to become long-lasting and successful(?) business entities.{{cn, date=March 2024
External links
* SSU's are ready for globalizatio
* Success for Small start unit
Business models