Which business strategy improves ICT startup companies’ technical efficiency?

ABSTRACT

Startup companies with relatively few resources must select business strategies that focus their competencies and utilise resources efficiently. The present study classified ICT startup companies into four groups (core technology, efficient portfolio, product quality, and balance groups) according to the weight of each strategy, and we compared the technical efficiencies of the four groups through meta-frontier analysis. We found that the efficiency of the strategy of creating various product lines at the lowest cost was the highest, followed by the group using the strategy of improving the technology and design of the product. This study empirically presents evidence for determining the optimal strategy for ensure initial success of ICT startup companies by comparing the efficiencies of companies using different strategies.

KEYWORDS:

• Business strategy
• ICT startup company
• technical efficiency
• meta-frontier analysis

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2020S1A5A8045556 and NRF-2020R1F1A1048202).

Notes on contributors

Eungsu Kim

Eungsu Kim is a graduate student of the Department of Interaction Science at Sungkyunkwan University, South Korea. His research interests include business strategy, HCI and using AR mirror for health promotion.

Yoonje Euh

Yoonje Euh is pursuing Ph.D. in Interaction Science and received his Master’s degree in Management of Technology at Sungkyunkwan University in Seoul, South Korea. His research interests include strategic marketing, public policy and health economics and outcomes research (HEOR).

Jongsu Yoo

Jongsu Yoo received a master’s degree after studying in the Dehub lab at the university of Sung Kyun Kwan University. His research interest is interaction in media, particularly in OTT and data analysis in every day’s topics.

Jae-gil Lee

Jae-gil Lee is a post-doctoral researcher of the Department of Interaction Science at Sungkyunkwan University, South Korea, and a visiting scholar of Media Effects Research Laboratory at Pennsylvania State University. He received his Ph.D. in Interaction Science from Sungkyunkwan University. His research focuses on improving the influence of the latest technologies on human society, including autonomous vehicles, conversational AI agents, and social robots.

Yuri Jo

Yuri Jo is a research fellow at Korea Information Society Development Institute. She received her Ph.D. in Management Engineering from Korea Advanced Institute of Science and Technology. She has research interests in technology firms, ICT policies and innovation ecosystems.

Daeho Lee

Daeho Lee received his B.S. degree in electrical engineering from the School of Electrical Engineering, Seoul National University, Seoul, Korea, in 2001, and his Ph.D. in economics from the Technology Management, Economics and Policy Program, Seoul National University in 2011. He is now an associate professor at the Department of Interaction Science, Sungkyunkwan University, Seoul, Korea. His research interests include the adoption of new ICT products & services, government policies in the area of ICT, and consumer behaviour in online.