Traditional studies of new venture performance have focused on the characteristics of entrepreneurs and have shown conflicting results on the relationship between the characteristics and performance of new ventures. Recently, some researchers have broadened their search to include aspects of the industry and the strategy of new ventures. The purposes of this study are to identify strategic archetypes of new ventures based on the taxonomic approach and to explain the differences in new venture characteristics and performance among strategic archetypes.
To find the strategic archetypers, 114 new venture CEOs form various industries were asked to describe their ventures` competitive strategy through 19 questionnaire items on competitive methods. Using factor analysis and subsequent cluster analysis, four archetypes were identified such as: versatile type, technology-driven type, market-oriented type, and cost reduction type.
The results imply that there exist different types of venture strategy even among new technology-based venture firms in Korea, and show differences in performance among strategic archetypes: market-oriented type and versatile type are better than cost reduction type in terms of growth rate and profitability.
Because the venture strategy is identified as a major determinant of the venture performance, the choice of venture strategy suitable for firm's industrial characteristics and internal resource bases becomes a very strategic decision for firm`s sustained growth. Further studies are needed to strengthen some methodological limitations of the study.