The initiation of smaller companies into a larger market is extremely challenging due to the public reliance on familiarity with established companies. Government regulators are faced with rapidly changing market advances in finance, medicine, agriculture, and software, so innovative ideas to deal with issues are usually drawn consistently from a few main companies. Jerry Kim, an assistant professor of business at Columbia University, decided to inspect the connection between established companies and regulatory treatment at the Food and Drug Administration. Mr. Kim’s hypothesis was that the FDA would approve the NDA’s of a established drug company faster than a less developed company. In his studies, his hypothesis proved to be correct, and the NDA’s drugs were speedily processed compared to submissions from other companies. Therefore, this is an illustration of how new companies sometimes have a difficult time establishing a foothold in their target market. For a more successful approach, new firms should examine partnering with already established companies to become successfully noticed and establish a reputation. The bias of relying on established name brands is a disease that governments, investing companies, and even consumers fall prone to, and this makes it increasingly hard for new businesses to emerge.
Categories
Survival of the Biggest
“Which MBA? | Business-school Research: Your Reputation Precedes You.” The Economist – World News, Politics, Economics, Business & Finance. Web. 09 Oct. 2010. <http://www.economist.com/whichmba/reputation>.
