Start-Up Challenges and Solutions: Legitimacy Strategies for Burgeoning CompaniesMotivationResearch QuestionsWhat is the Value to Oregon?Anecdotal EvidenceLegitimacy definedLegitimacy – Food BusinessTheory Surrounding LegitimacyTheory Surrounding LegitimacySlide 10Wine Study Work to DatePreliminary Findings of Wine InterviewsPreliminary Priority of Stakeholders & Events to SucceedStart-Up Challenges and Solutions: Legitimacy Strategies for Burgeoning CompaniesClay DibrellAssociate Professor of Strategic ManagementMotivationHigh rate of start-up failures in Oregon.Location-specific competitive advantages of Oregon. The role of entrepreneurship in the future success of Oregon.The plight of rural Oregon.Research QuestionsHow do start-up firms overcome liability of newness?How do start-up firms capitalize on being new?How do start-up firms gain legitimacy?Who are the key stakeholders enabling or preventing a firm to attain legitimacy?What role does family play in a firm gaining legitimacy?What is the Value to Oregon?Road map to help start-up firms to succeed through attainment of legitimacy.Increased competitiveness of food industries.Creation of more value-added jobs.Provide guidance for policy-makers.Anecdotal EvidenceFood Processor Exec You have to be at trade shows 3-5 years before people notice you.Former HP Exec in charge of working with start-up firmsMost start-ups just do not understand what customers want. The product is often cool, but commercially unviable. If do get it, then they are often unable to meet demand. It is very frustrating to work with a start-up.Former Ralph Lauren ExecMy experience has been that startups need to hang on until some fortunate event that takes them over the top.Legitimacy defined“a social judgment of acceptance, appropriateness, and desirability, [enabling them]…to access other resources [including customers] needed to survive and grow” (Zimmerman and Zeitz, 2002)Legitimacy – Food Business Recognized approval and acknowledgement by food processing industry suppliers, buyers, competitors, and regulatory agencies that a given firm is a business with staying power A viable partner and competitor within the fraternity of food processing entitiesTheory Surrounding LegitimacyTheoryInstitutional TheoryResource-Based ViewStrategies for gaining legitimacyConformance – be like everyone elseSelection – locate a start-up in a growing areaManipulation – innovation of new productsCreation – creating a new industryTheory Surrounding LegitimacyDifferent forms of legitimacyRegulative, normative, cognitive, industryDifferent levels of legitimacyRegional, company, individualResources for the start-upIncremental accumulation of human, financial, intellectual, other resourcesFirmStrategiesFirmLegitimacyFirmResourcesSurvival GrowthLEGITIMACY PROCESS MODEL(Zimmerman and Zeitz, 2002)Wine Study Work to DateInterviewed thirteen different winery owners in Australia.Each owner was identified by other winery owners or wine experts as being successful.Different wine regionsBarossa Valley (outside of Adelaide)Hunter Valley (outside of Sydney)Yarra Valley (outside of Melbourne)Adelaide Hills (outside of Adelaide)Margaret River (outside of Perth)TasmaniaGold Coast (outside of Brisbane)Preliminary Findings of Wine InterviewsFocusPassionThe role of innovation.Leveraging experience based in other industries to be successful.The role of experience in the wine industry is a good predictor of future success.The role of mentors in the industry.Leveraging reputational perspectivesFamilyManagementPreliminary Priority of Stakeholders & Events to SucceedRole of stakeholders in gaining legitimacy.1. Family2. Financial supporters3. Staff4. Local competitors 5. Wine distributors6. Wine maker7. Wine in restaurants8. Suppliers9. Professional Trade Associations10. GovernmentTangible events1. Location2. Cellar door (Tasting Room)3. Winning awards for quality4. Attending trade
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