Selecting and executing your Entrance Strategy

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Selecting and executing your Entrance Strategy

• Entrance Strategies (Chapter 9)
• Decide on an entry strategy
• Planning to learn when uncertainty is high
• Assessing your project as it unfolds
• Tug of War (Practicum) 

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Innovation Invention Commercialization
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What do you do now?

• Youve
• Identified and screen new innovations
• Figured out your target market
• Filled your opportunity portfolio
• Determined your core competences
• Decided where you will invest for the future
• Now its time to get
• Down in the real world. You know. Where the
  rubber meets the road and the real folks are that
  make it go.
• H. Ross Perot, on Larry King Live

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Where does entry strategy fit in?
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What is Entrance Strategy?

• Several practical areas in entrepreneurship and
  innovation reflect the role of the entrance
  strategy
• The first step in an entrance strategy is your
  vision what will the company look like in 10,
  15, 20 years
• Financing (VCs, Banks, Stock issues)
• Many aspects of Venture Capital work (business
  model, hiring decisions, capitalization, etc.)
• Incubators
• Speculators and Universities love these
• Why?

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Adaptive Execution

• Decide on an entry strategy
• Anticipating competitive behavior and response
• Planning to learn when uncertainty is high
• Rather than meeting objectives set in advance
• Discovery Driven Planning
• Assessing your project as it unfolds

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Anticipating Competitor Response

• Objective Avoid debilitating competitive
  interaction
• By using speed, skill and surprise
• Use your imagination, innovation, creativity to
  outmaneuver your competitors
• Rather than your scarce resources

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Where are your Customers?

• Lead-steer customers
• Opinion leaders in their industries
• Highly regarded by peers
• Customers with blogs, review or other sites
• Use these customers enthusiasm to
• Test your assumptions about attribute maps and
  consumption chains
• Use their success with your offering to sell
  others

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Assessing Your first 5 sales

• This is where you evaluate, learn, modify

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No Sales until First 5 Salesprioritizing the
first few sales
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Risk-return trade-off

• Most customers will buy on a risk-return decision
• Small value low risk
• Higher risk demand for higher return (savings)

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Customer RisksThe risk of the New

• Learning (experience) curve
• Opportunity costs
• Failure or uncertain operation
• Employee resistance
• Legal and Environmental
• Quality Perception

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Learn from each sale

• You cant sell 10 until you sell 1
• You cant sell 100 until you sell 10 Etc.
• Each of the early sales is an opportunity
• To test your attribute map and consumption chain
• To learn about your product and customer
• To innovate again and again

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Tug of War

• Write the challenge
• Describe the best-case scenario and the
  worst-case scenario
• List the conditions of the situation
• Find the forces pushing you to the best case and
  those pulling you toward catastrophe
• Pit each condition against its opposite on the
  continuum by specifying its push and pull powers.

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Assessing Competitive Response

• After youve assessed your first few buyers
• decide how aggressively you want to move

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Competitors propensity to respond

• 3 Questions
• Is this area important to them?
• Have they been increasing their commitment here?
• Have they invested heavily in this area?
• This is where
• The Porter framework
• Is useful

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Competitive ResponsesHeres where the book
lapses into Military jargon
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Tactics

• feint (fant) noun
• 1. A feigned attack designed to draw defensive
  action away from an intended target.
• 2. A deceptive action calculated to divert
  attention from one's real purpose. See synonyms
  at artifice.
• gambit (gam'bit) noun
• 1. Games. An opening in chess in which a minor
  piece, or pieces, usually a pawn, is offered in
  exchange for a favorable position.
• 2. A maneuver, stratagem, or ploy, especially one
  used at an initial stage.
• 3. A remark intended to open a conversation.
• onslaught (on'slôt, ôn'-) noun
• 1. A violent attack.
• 2. An overwhelming outpouring an onslaught of
  third-class mail.

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Who will feed Fluffy?

• PETCO Case on pp. 213-214

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Theory Practice

• Our theory provides you an inventory of
  techniques and concepts required for success
• The necessary conditions
• Practice is more complex, and requires a complete
  strategy (and even then is not sufficient)

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Practice in Competitive Positioning

• Identify your first few customers and learn from
  them
• Develop your strategy
• Identify each customer arena you intend to pursue
• Assess Corporate Support
• Assess Motivation and Capacity of the Competition
• Map Arena Attractiveness
• Map Competitive Positions of each player
• Decide on your firms preferred strategy
• Assess strategy of each competitor
• Map each competitor's business position against
  your own

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Ralston

• Developing positions in seven sub-segments of the
  pet food business
• pp. 217 on

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The Competitors
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Commitments
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Categories and Products
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Competitive Positions
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Ralston vs. Mars (importance)
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Ralston vs. Mars (Attractiveness)