1 ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICS STRATEGIC MANAGEMENT BUAD 4980

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Transcript of 1 ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICS STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICS Entrepreneurship The creation of new value by an existing organization or new venture that involves the assumption of risk.

    Recognizing Entrepreneurial OpportunitiesSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICS New value can be created in:Start-up venturesMajor corporationsFamily-owned businessesNon-profit organizationsEstablished institutions

    Recognizing Entrepreneurial OpportunitiesSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSU.S. Small Companies by IndustrySTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Opportunities Opportunity RecognitionThe process of discovering and evaluating changes in the business environment, such as a new technology, socio-cultural trends, or shifts in consumer demand, that can be exploited.

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSOpportunity Analysis FrameworkSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Opportunities New Entrepreneurial VenturesCurrent or past work experiencesHobbies that grow into businesses or lead to inventionsSuggestions by friends or familyChance eventsChange

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Opportunities Established FirmsNeeds of existing customersSuggestions by suppliersTechnological developments that lead to new advancesChange

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Opportunities Discovery phaseThe process of becoming aware of a new business concept.May be spontaneous and unexpectedMay occur as the result of deliberate search for new venture projects or creative solutions to business problems

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSOpportunity Recognition Process Opportunity Evaluation PhaseInvolves analyzing an opportunity to determine whether it is viable and strong enough to be developed into a full-fledged new venture.Talk to potential target customersDiscuss it with production or logistics managersConduct feasibility analysis

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSCharacteristics of Good Opportunities Attractive market demand present Achievable practical and possible Durable lasting opportunity Value Creating potentially profitable

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSFinancial ResourcesTypes of financial resources that may be needed depend on two factors: Stage of venture development and the Scale of the ventureSmall start-ups usually funded by personal savings, home equity or contributions from family and friendsTo obtain funding for rapid growth, firms often seek venture capitalSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSFinancial ResourcesSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSOther Entrepreneurial Resources Human capital management expertise / skill Social capital leveraging networks of advisors, potential customers, sources of exposure Government resourcesSmall Business Administration (SBA)Government contracting favoring small businessesState and local government support programs and business incubators

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial LeadershipLaunching a new venture requires certain personal characteristics:CourageBelief in ones convictionsWillingness to work hardStaying power

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Leadership Three Required CharacteristicsVisionDedication and driveCommitment to excellence

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Leadership Vision - the entrepreneurs most important assetAbility to envision realities that do not yet existExercise a kind of transformational leadershipAble to share with other potential stakeholders

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Leadership Dedication and Drive - reflected in hard workPatienceStaminaWillingness to work long hours Internal motivationIntellectual commitment to the enterpriseStrong enthusiasm for work and lifeSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial Leadership Commitment to Excellence - requires:Understanding customers and marketsFocus on providing quality products and servicesPaying attention to details at all levels of the businessContinuous learning and ability to changeSurrounding yourself with good people who share your values, work ethic and vision

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial StrategyThe strategy for a new venture will be determined to some extent by:A viable opportunityAvailability of resourcesSkilled and dedicated entrepreneurial teamOther conditions in the business environment

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntrepreneurial StrategyThe type of entry strategy required will depend on several factors:Is the product/service high-tech o low-tech?What resources are available for the initial entry?What are industry and competitive conditions?What is the overall market potential?What level of ongoing control by the owner is desired?

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntry Strategies Pioneering New EntryA firms entry into an industry with a radical new product or highly innovative service that changes the way business is conductedRisk of non-acceptance in marketDisrupts status quo of industry potential rush of competitors to copy the innovative product or serviceMay require intellectual property protectionSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntry Strategies Imitative New EntryA firms entry into an industry with products or services that capitalize on proven market successes and that usually has a strong marketing orientationProducts or services that have been successful in one market niche or geography and can be extended to other niches or localesFill a market need for an existing product or service that has been inadequately met by othersSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSEntry Strategies Adaptive New EntryA firms entry into an industry by offering a product or service that is somewhat new and sufficiently different to create value for customers by capitalizing on current market trends.Taking an existing idea or concept and adapting it to another market or product conceptMust be perceived as unique and valuable by marketEasily imitated by competitorsChallenging to keep the concept fresh

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSBlue Ocean StrategiesCreate uncontested market spaceMake the competition irrelevantCreate and capture new demandBreak the value/cost tradeoffPursue differentiation and low cost simultaneouslySTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSGeneric Strategies Overall cost leadershipSimple organizational structuresMore quickly upgrade technology and integrate feedback from the marketplaceMake timely decisions that affect cost

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSGeneric Strategies DifferentiationUse new technologyDeploy resources in a radical new wayMay be difficult and expensive to establish new brand identities

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSGeneric Strategies FocusNiche strategies fit the small business moldMay include elements of cost leadership and differentiationIntent to create small market share and avoid competition by major players in larger market

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSGeneric Strategies Combination StrategiesEntrepreneurial firms are often in a strong position to offer a combination strategy Combine best features of low-cost, differentiation, and focus strategiesFlexibility and quick decision-making ability of a small firm not laden with layers of bureaucracyCombination strategies may be more difficult to copy by large competitorsCombination strategies may be more sustainable in the marketplaceSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSCompetitive Dynamics Competitive DynamicsIntense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSCompetitive DynamicsSTRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY AND COMPETITIVE DYNAMICSNew Competitive Action New Competitive ActionsImprove market positionCapitalize on growing demandExpand production capacityProvide an innovative new solutionObtain first mover advantages CAPTURE PROFIT OPPORTUNITIES

    STRATEGIC MANAGEMENT BUAD 4980

  • *ENTREPRENEURIAL STRATEGY