Corporate Venture and Greg Stamboulidis: How a Start-Up Became a Big Business

Topics: Marketing, Value chain, Strategic management Pages: 5 (1772 words) Published: May 24, 2013
1. Characterise the development of the entrepreneur’s corporate venture from the start up of the business to the present day. Grey developed his business through innovative management of value chain activities. In 1985, at the first place, Grey Stamboulidis was working as a food product seller to school canteens and fish shops in Melbourne, Australia. Then Greg decided to develop his business by focusing on the development of value chain which are the activities in the organization until all of the processes of production to the end users (Pech, 2009). Then Gerg decided to start off the business by buying the business which selling foods to school canteen and fish shop around Melbourne. At that time, Grey is a 25 year young man. He had never worked related to fishing area before. The only supplying source for his business is from Melbourne markets. The profit margin of the firm is very low, at 10 to 15 percent. Obviously, they had no competitive advantage over their competitors. So Greg started finding sources abroad because the number of fish in Southern America is limited and the Government regulation is very strict. Another cause that Greg looked for overseas fish is in 1990, the price of the shark, labor cost and competition are very high. Besides, the quality of the product varied continuously. Thus, Greg regarded South Africa as the new supplier. In this country, there was more shark and the price was lower than in Australia which was AUD$ 3.00 per kilo. In this period, Greg enjoyed 100 percent profit margin, much more than when he bought from Melbourne markets. Christensen (2010) says that competitive advantage is the activities that the company is doing better than competitors in minds of customers. In this case, the brand-new source that Greg found was more reliable and cheaper than Australia markets. So Greg has competitive advantage than his competitors. He also jointed venture with South African suppliers for reliable product and good network. Although South Africa was a big source to provide fish to his company, he still searched for other resources such as Brazil, Chile, Mexico and Fiji. Value chain management could help the company to gain competitive advantage (Thompson and Martin, 2010). Furthermore, Greg created new businesses by using differentiation strategy to produce new products such as calamari ring, hotdogs and frozen fish. In his 1990 book "The competitive advantage of nations", Michael Porter proposed that nations and firms create competitive advantage and that is not inherited. He theorised that competitive advantage comes from innovation. One of these is differentiation strategy. He added value on his products and service to differentiate his products from competitors. So he can satisfy different customers. Grant (2005) said that a company needs to know the consumer demand so they know how to satisfy their demands. 2.

Greg might need to separate his corporate venturing because fish price was rapidly increasing, labour cost is escalating and many competitors enter the market. Block & MacMillan (2003) said that separated venturing could enable firms to take more chances and evaluate than one venture because the competition is increasingly high in the market. If they had done only one business, his firm had got into difficulty to gain market share in this field. So the company could look at the new venture to diversify their products and manage risk. Furthermore, Hitt, Ireland and Hoskisson (2010) have said that most companies are successful because they learn and know how to fulfill the need of their customers. Grey decided to establish other business because the demand of customers is very various. And this will help him to gain popularity among his customers. Greg expanded his business to do mining to gain economies of scales. They also state that it is necessary to determine core competency for producing new products and services to new customer. Greg knows that he has...
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