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Entrepreneurial Strategy:

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Entrepreneur- Has Ability To Obtain & Recombine Resources ... 'Me Too' Minor Variation Of Launch Product. Take Existing Product/Service To New Market ... – PowerPoint PPT presentation

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Title: Entrepreneurial Strategy:


1
(No Transcript)
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13
Chapter
Entrepreneurial Strategy Generating and
Exploiting New Entries
3
What Is A New Entry?
  • Offering A New Product To An Established/New
    Market
  • Offering An Established Product To A new Market
  • Creating A New Organization

4
Resources As Competitive Advantage
  • Resources- Firms Building Blocks, Inputs Into
    Production Process
  • Must Be
  • Valuable
  • Rare
  • Inimitable

5
Creating Resource Bundle
  • Entrepreneur- Has Ability To Obtain Recombine
    Resources
  • Market Knowledge- Information, Technology,
    Know-How/Skills That Provide Insight To
    Market/Customers
  • Technological Knowledge- Information, Technology
    Know-How/Skills That Provide Insight To Create
    New Knowledge

6
Assessing New Entry Opportunity
  • Information
  • Prior Knowledge/Information Search
  • Window Of Opportunity- Time When Environment Is
    Favorable
  • Decision Making Under Uncertainty
  • Error of Commission
  • Error of Omission
  • Decision To Exploit/Not Exploit New Entry

7
Strategy ForNew Entry- First Movers
  • Develop Cost Advantage
  • Face Less Competition
  • Secure Important Channels
  • Better Positioned To Satisfy Customers
  • Gain Expertise Through Participation

8
First Mover Disadvantages
  • Emerging Industries
  • Demand Uncertainty- Difficult to Estimate Market
    Size, Speed Of Growth Its Key Dimensions
  • Technological Uncertainty- Will Technology
    Perform, Alternate Technologies Emerge?
  • Adaptation To New Environmental Conditions
  • Customer Uncertainty- Newness

9
OvercomingCustomer Uncertainty
  • Informational Advertising
  • Highlight Product Benefits Over Substitutions
  • Create Frame Of Reference For Potential Customer
  • Educate Customer- Set Industry Standard, Customer
    Loyalty

10
Lead Time First Mover
  • Lead Time- Period In Which 1st Mover Operates
    With Limited Competition
  • Create Barriers To Entry For Competition
  • Build Customer Loyalty
  • Build Switching Costs
  • Protect Product Uniqueness
  • Secure Access To Sources Of Supply Distribution

11
Risk Reduction Strategies
  • Risk- Probability Of Downside Loss
  • Derived From Entrepreneurs Uncertainties
  • Market Demand
  • Technological Development
  • Actions Of Competitors

12
Market Scope Strategy
  • Scope- Choice Of Which Customers To Serve How
  • Narrow-Scope- Reduces Competitive Risk
  • Focus On Customized Products, Local Business,
    Craftsmanship
  • Build Specialized Expertise/Knowledge
  • High End Market High Profit Niche
  • Broad-Scope- Offer Wide Range Of Products To Many
    Market Segments, Causes Increased Exposure To
    Competition

13
Imitation Strategy
  • Why?- Minimize Risk
  • Types
  • Franchising
  • Me Too
  • Minor Variation Of Launch Product
  • Take Existing Product/Service To New Market
  • Deliver Existing Product In New Way

14
Liabilities Of Newness
  • Costs Of Learning New Tasks
  • Overlap/Gaps In Responsibilities Causes Internal
    Conflict
  • Communication- Formal Informal

15
Assets Of Newness
  • Clean Slate- No Established Procedures, Systems,
    Etc.
  • Heightened Ability To Learn New Knowledge-
    Competitive Advantage
  • Respond To Change More Quickly- Flexibility
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