The global business environment today exhibits bi-directional dynamics in enterprise management, and marketing of products and services. Multinational companies seek alliances with local companies, and tend to exploit the reverse innovation (Ndhlovu 2012). Start-up enterprises (SUEs ) form the core of local business, and share their products and services with large companies to grow global. However, start-up enterprises develop on a weak resource-based strategy, which includes paucity of capital resources, human resources, technology, and marketing skills. Start-ups measure and monitor continuously their performance through selected metrics (Rompho 2018). Some emerging potential management strategies used to develop economically viable start-up enterprises include lean management techniques, consumer1 discovery, consumer-centric marketing strategy, and identification of the minimum viable market segments.
Small businesses and SUEs have become integrated functionaries of an industry in the emerging global business model. A small business is a self-sustaining organization with limited capital and human resources, aiming to generate continuous revenue by major investments. A small business is built on a localized business model which emphasizes limited sales in local or regional markets operating through a small number of employees (Weber et al. 2015). A small business unit may be defined as a micro-enterprise organized for generating profit within the legal norms of a company. These business units operate by regulating manpower, investment, taxes, and organizational contingencies. Small businesses are either sole proprietary or partnership-based companies having limited liability toward organizational risks (McDowell et al. 2016). SUEs are also founded on the maxim of low capital and limited human resources like small businesses. However, an SUE emerges as a disruptive organization, with innovation and technology intended to develop an impactful business model. SUEs are oriented toward innovation and technology-led disruption (Silva et al. 2017), which may complement various levels of business organizations ranging from small to large business units. SUEs try to reach the market faster and grow with the support of business alliances and government programs. They are developed in team leadership with objectives of short-run business performance (Zaech and Baldegger 2017). Accordingly, the differences between small business and SUEs may be identified in terms of their business models, capital outlay, resource plan, investment potential, and business growth objectives.
Start-up enterprises commonly evolve from family business firms (FBFs ) which operate in a niche, and continuously try to expand their business by exploring new opportunities through collaborations in the innovation and technology sectors. However, FBFs face several complexities in incubating SUEs as independent organizations with predetermined organizational designs and business plans. Therefore, decisions taken in SUEs have positive and negative impacts on their business. SUEs continuously thrive to enrich their business practices through partnership, investment, innovation, and socio-emotional wealth (Villeger 2018). Start-up enterprises have a major challenge of transforming smart networking in manufacturing and marketing processes in reference to innovation, technology, and market competitiveness. Smart networking refers to strategy, measurement (investment and demand), consumer responsiveness, accessibility to market, and developing trusted brands. New demands like customer involvement and increased business orientation of cyber-physical (delivering digital products) marketing systems have emerged as major challenges for SUEs in the twenty-first century. Therefore, SUEs need to holistically plan the convergence of creative products with a customer-centric marketplace (Goerzig and Bauemhansl 2018).
As market competition is penetrating down from the global level to the bottom of the pyramid markets, many new start-ups are emerging in regional marketplaces by creating marginal differentiations in their products and services. This situation has caused chaos among start-ups, which has led to cannibalization within the industry in general and the micro-enterprises sector in particular. This market trend leads to new risks emerging in organizational management related to operational efficiencies, cost-effectiveness, profitability, and expansion of business by exploring new levels of coordination. Most small and medium enterprises (SMEs ) and newly emerging SUEs succumbed to such organizational and market complexities during the recession effect (2007â2011) in the USA (Cantonet et al. 2019).
Enterprise operations in SUEs have short-term goals. Therefore, most SUEs use transitional managerial policies which are not strategically interconnected to the long-term enterprise operations mandate. As start-ups are owned by individuals, they lack established organizational systems that interconnect the backward and forward market networks with profitability goals. Such attributes of SUEs turn them into complex adaptive systems to grow in tune with the market requirements and generate sustainable customer value. Their individual-driven, limited-leadership managerial policies confine SUEs to a narrow entrepreneurial ecosystem (Herrera-Restrepo and Triantis 2018).
Entrepreneurial Ecosystem
In emerging markets, local enterprises are developed as ancillary to mainstream industries. The local enterprises are managed with experiential entrepreneurship (family business) of amateur entrepreneurs. These enterprises are identified as start-ups, which need to be nurtured managerially by developing sustainable business models (Mandel and Noyes 2016). SUEs require a sustainable ecosystem to move beyond the infancy stage and enter the business governance propositions. The entrepreneurial ecosystem focuses on developing appropriate marketing strategies, operations systems, and profit paradigms. The SUE ecosystem drives innovation management, technology diffusion and adaptation, marketing strategy, operational effectiveness, and the socio-economic development cycle. Thus, SUEs face major challenges in terms of effective managerial interventions and a streamlined business growth paradigm (Khan 2013). Another challenge with start-up enterprises lies in identifying appropriate innovative designs and technological platforms regarding manufacturing, locating consumers, and developing market segments (Roberts et al. 2014).
In the dynamic business environment today, it is necessary to develop SUEs with adequate entrepreneurial responsiveness to the current economic environmental and socio-spatial requirements. Accordingly, SUEs should be identified in view of the resourcefulness of opportunities and adequate conceptual platforms. These enterprises link their business operations with mainstream industries and generate multiple forms of value in the society and economy (Korsgaard et al. 2016). Ancillary SUEs, which manufacture or provide services to support the principal operations, serve as complementary resources for large industries. SUEs serve as original equipment manufacturers for large industries in the capacity of ancillaries (Tilman 1997; Baker et al. 2010).
SUEs can grow to regional business economy levels, provided they are supported by business governance and state policies. These enterprises help in improving socio-spatial economic conditions better than the generic medium, small, and micro-enterprises by targeting incentivized opportunities to facilitate market transitions. SUEs help to aggressively expand the formal sector, diffuse innovations, foster economic growth, expand business opportunities, and create employment in socio-spatial dimensions (Edoho 2016). SUEs deliver innovative solutions to the latent needs of consumers in the society. Needs-based innovations are required in various social sectors such a...