ORGL 2900
ENTREPRENEURSHIPENTREPRENEURSHIP
Chapter 7
Small BusinessSmall Business StrategiesStrategies::
Imitation with an InnovativeImitation with an Innovative
twi...
This Week’s KEYThis Week’s KEY
ResourcesResources
Resources
Developing YourDeveloping Your
StrategyStrategy
• Defines how your business operates:
– How you develop new offerings
– How you “Go To” market
– How to identify ideal pro...
• Chances are you are pursuing a business model
that ALREADY EXISTS
• Copy others’ successes, avoid their failures
• Devel...
Step 1Step 1: Your: Your
Pre-strategyPre-strategy
• Choose your product / service
• Identify the industries you will pursue
• Find all relevant industry trade associations
...
Industries
My Industries
• A “market” is a population of customers
for your product / service:
– Understand the scale and scope
• Scale: Mass versu...
To Imitate, OrTo Imitate, Or
Innovate???Innovate???
66%66% choose to IMITATE
WHY?WHY?
Innovate Approach
• Incremental innovationIncremental innovation: Imitation plus
one or two ways in which you do things
completely different...
• BY imitating, customers already
understand/know about your offerings.
• Most use imitation plus/minus one degree
of simi...
INNOVATE Path
INNOVATE Path
INNOVATE Path
ConductingConducting
Industry AnalysisIndustry Analysis
• Obtain industry codes
• Size the industry
• Profitability (www.bizstats.com)
• How profits are made
• Competitors
• Anal...
ResourcesResources
Assn. Directories
Resources
Resources
Resources
Resources
Resources
Resources
Step 2Step 2: Benefits: Benefits
• What benefitsbenefits do you plan on offering
your customers?
• ValueValue benefits: Quality, style, service,
technology...
S.W.O.T Analysis
Strengths
Threats
Oppor-
tunities
Weaknesses
SWOT Analysis
• Information provided can be useful
• Price sensitivity, product/service features
and benefits, feelings about the produc...
Step 3Step 3: Strategy: Strategy
SelectionSelection
• There Are THREE Primary Strategies
– DifferentiationDifferentiation: Show how you offer a
combination of VALUE benefits ...
Step 4Step 4: Competitive: Competitive
AdvantageAdvantage
• Implement customer benefits
• Know EXACTLY what your competitors
are doing
• Customer service – it’s lip service or it’s...
• Infuse the benefits your customers are looking
for into every area of your business.
• Michael Porter popularized VCA, l...
• Existing Competitors
• Potential Entrants
• Substitutes
• Suppliers
• Buyers/Customers
Porter’s Five Competitors
• Leverages Jay Barney’sJay Barney’s model for competitive
advantage:
–Value
–Rareness
–Imitability
–Organization
• Used t...
VRIO Analysis
• Match your company’s strategy to the
lifecycle of the industry:
– Introduction
– Early Adopters
– Growth
– Maturity
– De...
Entrepreneurship Chapter 7 Ethan Chazin
Entrepreneurship Chapter 7 Ethan Chazin
Entrepreneurship Chapter 7 Ethan Chazin
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Entrepreneurship Chapter 7 Ethan Chazin

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Great tips, resources, best practices and strategies for entrepreneurs, start-ups, professionals and small business owners.to plan launch and grow successful businesses.

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Entrepreneurship Chapter 7 Ethan Chazin

  1. 1. ORGL 2900 ENTREPRENEURSHIPENTREPRENEURSHIP
  2. 2. Chapter 7 Small BusinessSmall Business StrategiesStrategies:: Imitation with an InnovativeImitation with an Innovative twisttwist
  3. 3. This Week’s KEYThis Week’s KEY ResourcesResources
  4. 4. Resources
  5. 5. Developing YourDeveloping Your StrategyStrategy
  6. 6. • Defines how your business operates: – How you develop new offerings – How you “Go To” market – How to identify ideal prospects – How to manage existing accounts – How to engage partners, vendors, investors, the media, suppliers – How to recruit, retain and develop talented people – How to manage your finances – How to manage inventory Your Strategy
  7. 7. • Chances are you are pursuing a business model that ALREADY EXISTS • Copy others’ successes, avoid their failures • Developing a strategy requires four key decisions you make about your business: – Pre-strategy – Benefits – Strategy – Competitive Analysis Your Strategy
  8. 8. Step 1Step 1: Your: Your Pre-strategyPre-strategy
  9. 9. • Choose your product / service • Identify the industries you will pursue • Find all relevant industry trade associations • SIC versus NAICS Codes? Pre-Strategy
  10. 10. Industries
  11. 11. My Industries
  12. 12. • A “market” is a population of customers for your product / service: – Understand the scale and scope • Scale: Mass versus Niche • Scope: Local to global Selecting Your Markets
  13. 13. To Imitate, OrTo Imitate, Or Innovate???Innovate???
  14. 14. 66%66% choose to IMITATE WHY?WHY? Innovate Approach
  15. 15. • Incremental innovationIncremental innovation: Imitation plus one or two ways in which you do things completely different • Pure InnovationPure Innovation: Results in a new product or service: – Occurs VERY rarely – Enables you to make your business fit your values, beliefs, strengths, ideas, preferences Imitate Approach
  16. 16. • BY imitating, customers already understand/know about your offerings. • Most use imitation plus/minus one degree of similarity (akin to cloning, manifests in franchising.) • Parallel competition: Copying with minor adjustments. • Innovate approach enables you to make your business fit your values, beliefs, strengths, ideas, preferences. Innovate Approach
  17. 17. INNOVATE Path
  18. 18. INNOVATE Path
  19. 19. INNOVATE Path
  20. 20. ConductingConducting Industry AnalysisIndustry Analysis
  21. 21. • Obtain industry codes • Size the industry • Profitability (www.bizstats.com) • How profits are made • Competitors • Analysis: consolidate data into summary report format • Source your references Industry Analysis
  22. 22. ResourcesResources
  23. 23. Assn. Directories
  24. 24. Resources
  25. 25. Resources
  26. 26. Resources
  27. 27. Resources
  28. 28. Resources
  29. 29. Resources
  30. 30. Step 2Step 2: Benefits: Benefits
  31. 31. • What benefitsbenefits do you plan on offering your customers? • ValueValue benefits: Quality, style, service, technology, personalization. • CostCost benefits: lower cost, volume (scale) savings, learning (greater efficiency) scope (ex. Multifunction printer.) • OrganizationalOrganizational: you automate processes or mastered the production of a product or service, so you can offer it more cheaply than anybody else. Benefits
  32. 32. S.W.O.T Analysis Strengths Threats Oppor- tunities Weaknesses
  33. 33. SWOT Analysis
  34. 34. • Information provided can be useful • Price sensitivity, product/service features and benefits, feelings about the product, the company, competitors • People say one thing in a closed room, act differently when purchase is involved • Find a representative sample that fits ideal customer profile or existing clients if possible Brainstorming
  35. 35. Step 3Step 3: Strategy: Strategy SelectionSelection
  36. 36. • There Are THREE Primary Strategies – DifferentiationDifferentiation: Show how you offer a combination of VALUE benefits unlike anyone else to pursue MASS markets – CostCost: Tell how do you offer a combination of COST benefits – FocusFocus: Limit your efforts to a small portion of the overall market, called a segment or niche Strategy Selection
  37. 37. Step 4Step 4: Competitive: Competitive AdvantageAdvantage
  38. 38. • Implement customer benefits • Know EXACTLY what your competitors are doing • Customer service – it’s lip service or it’s a true advantage – Your clients will tell you what you’re doing wrong & right – Listen to customers…EXCEPT WHEN YOU DON’T! • Needs to be sustained over time • Know your markets inside & out Competitive Advantage
  39. 39. • Infuse the benefits your customers are looking for into every area of your business. • Michael Porter popularized VCA, looking at the processes and activities a small business conducts to design, produce, market, deliver and support its products and services with anwith an emphasis on four key areasemphasis on four key areas: – Infrastructure: Location, physical assets – HR – Technology – Procurement Value Chain Analysis
  40. 40. • Existing Competitors • Potential Entrants • Substitutes • Suppliers • Buyers/Customers Porter’s Five Competitors
  41. 41. • Leverages Jay Barney’sJay Barney’s model for competitive advantage: –Value –Rareness –Imitability –Organization • Used to test whether a resource will give your firm competitive advantage • How are you leveraging all your resources VRIO Analysis
  42. 42. VRIO Analysis
  43. 43. • Match your company’s strategy to the lifecycle of the industry: – Introduction – Early Adopters – Growth – Maturity – Decline – Laggards Lifecycle Analysis
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