An exploratory study on manufacturing strategy formulation in start-up companies

In the UK, as more traditional manufacturing is outsourced to lower-cost countries, the development of new high-tech manufacturing firms is increasingly perceived as important for sustaining a competitive UK manufacturing base. Early in their lifecycle, start-ups are vulnerable and prone to failure. Mistakes made in critical decisions regarding entry into manufacturing can significantly impact the survival of the firm. Developing the most appropriate strategy is probably more critical in start-up companies than in established organizations, yet little research has addressed this area. This paper reports research into the development of manufacturing strategy in start-up companies. The paper first reviews the literature and then presents findings from nine case studies of start-up companies, showing the nature and timing of the key strategic decisions that were taken, and examining the issues and problems encountered. Using the results from the cases, and the concepts of development tasks and strategic decision areas taken from the literature, a conceptual framework for strategy formulation in such companies is developed. The paper concludes by discussing the use of the framework, and suggesting how it might be operationalised to provide assistance to operational managers in start-up companies.