PRODUCT MARKET CHOICES AND GROWTH OF NEW BUSINESSES

The relationship between product-market strategies and the growth of n ew firms is incompletely understood. The lack of understanding reflect s the absence of a conceptual framework that would explain why certain product-market strategies achieve specified goals more effectively th an do others. Prior research links product and market strategy to busi ness growth, but does not clearly separate product line choices from m arket choices, and provides little guidance with respect to the sequen ce in which product and market changes should be made. Richard Cardozo , Karen McLaughlin, Brian Harmon, Paul Reynolds, and Brenda Miller pro pose a ''wave'' model of product-market choice, which yields hypothese s they evaluate with data from a subsample of 120 firms drawn from a r epresentative sample of new businesses. Results yield preliminary guid elines for product-market strategy for managers of fledgling businesse s.