Video # 8 student advantageStudent Advantage is a fast-growing business. What organizational and management challenges does fast growth pose for a small company? All fast growing businesses have the urge to grow and expand at exponential rates. Small companies such as Student Advantage also faces various organizational and management challenges as they grow at the rapid rate. First, the company needs highly qualified and competent employees to manage this growth. As such, head hunting will have to be conducted. Secondly, there is competition from other big players in the industry.
Various retailers will try to inhibit the growth of the small company. This can be very challenging putting into consideration aspects such as brand name and customer loyalty to existing companies. Financial resources can also be limited to finance the rapid growth or accelerate it even further. Many financial institutions are never willing to bank role new small companies. Also, there will be need to expand to new markets thus expanding the employee work force. All these branches of the company must be able to work together. The process of synching the businesses and employees can be tedious and confusing as the same image of the company is to be portrayed at all the branches.
When discussing the potential for Student Advantage to expand into international markets, the company’s legal counselor says, “The rules that apply to U. S. businesses don’t apply overseas. ” What does she mean, and what are the implications for entrepreneurs? International markets are a huge advantage to many companies. However, they come with their own limitations. In a discussion on the expansion of Student Advantage to international markets, the legal counselor said that the rules that apply to businesses in the United States do not apply overseas.
She meant that the mode of operation and government in the international markets differ. This is in aspects such as registration of the business, the government requirements for qualification to do business in the said country, the rates of taxes the company is subjected to, the employment laws and even trade tariffs. All the above named aspects of the operation of a business vary depending on the host country. This means that an entrepreneur has to do a lot of market research before venturing into the new market.
Without putting all these factors into consideration, the entrepreneur is bound to make mistakes. Student Advantage has gone from being a privately owned company to one that is publicly held. What are the advantages and the disadvantages a small company faces when it makes an initial public offering (IPO)? In the foundation of many businesses, there is always an aspect of going public. In this regard, Student Advantage has gone public from being a private entity.
The following are some of the advantages and the disadvantages that Student Advantage will face for going public. Advantages of an IPOStudent Advantage can borrow funds from public to increase its levels of investments. The company now has a larger capital base due to the increased number of share holders and ability to borrow capital from the public.