Abstract:
New venture creation is a challenging and complex process that needs a broad set of competencies to successfully proceed from an idea to registration and finally making first sale (Gartner, 1985). For new ventures entry appears to be relatively easy but survival is challenging in the competitive and uncertain marketplace (Geroski, 1995). The emerging competitive landscape is predominantly driven by the technological revolution and increasing globalization and is moving towards hypercompetition where extreme emphasis is on price, quality and customer satisfaction, and on innovation in technology and product or services. Consequently, time frames of all strategic actions are being reduced. Firms employ different approaches to deal with nature and level of competition. Established companies continually create new forms of competitive advantage through their technological innovation, ability of exploiting global markets, strategic orientation and so on (Man et al., 2002, Hitt et al., 1998), whereas new ventures or entrants are less likely to have a comprehensive strategy to compete owing to several reasons such as liability of newness (Stinchcombe and March, 1965), liability of smallness (Bruderl & Schussler, 1990; Hite & Hesterly, 2001), lack of resources etc. The pressure of chances of survival in an industry is greater for smaller and newer firms than for their large rivals (Chen and Hambrick, 1995).
