1. Strategy Entrepreneurship & Innovation
Ilhamsyah Ramadhan
Faculty of administrative science
Brawijaya University

2. IMPORTANT DEFINITION
Entrepreneurs


Individuals, acting independently or as part of an organization,
who see an entrepreneurial opportunity and then take risks to
develop an innovation to exploit it
Strategic entrepreneurship
entrepreneurial actions (exploiting found opportunities in the
external environment) through a strategic perspective
(innovation efforts)

3. IMPORTANT DEFINITION
•
•
Entrepreneurship dimension: identifying opportunities to
exploit through innovations
Strategic dimension: determining the best way to manage the
firm’s innovation efforts
Strategic entrepreneurship actions can be taken by:
• Individuals
• Corporations
Corporate entrepreneurship:
the use or application of entrepreneurship within an established firm
Strategic dimension:
determining the best way to manage the firm’s innovation efforts

4. ENTREPRENEURSHIP OPPORTUNITIES
Entrepreneurship is concerned with:
•
•
The discovery of profitable opportunities
The exploitation of profitable opportunities
Entrepreneurship: the process by which individuals or
groups identify and pursue entrepreneurial opportunities
without the immediate constraint of the resources they
currently control

5. ENTREPRENEURSHIP OPPORTUNITIES
Purpose of entrepreneurship:
•
To create wealth
Firms that foster entrepreneurship are:
•
Risk takers
•
Committed to innovation
•
Proactive in creating opportunities rather than waiting
to respond to opportunities created by others

6. CREATING VALUE THROUGH STRATEGIC
ENTREPRENEURSHIP
Objective is to help firms develop successful incremental and
radical innovations
• Be flexible and willing to take risks.
• Identify and exploit opportunities with sufficient resources
and capabilities to launch strategic actions.
• Sustain a competitive advantage while identifying and
exploiting opportunities.
• Foster an entrepreneurial mind-set among managers and
employees.
• Emphasize resource management, particularly human capital
and social capital.
Seek to enter and compete in international markets.

7. Innovation
There is no one fixed strategy that can be applied in any
real-life situations
No matter how firms use variety of different combinations of
resources, scientific and technical skills; success of the
innovation efforts is not certain (thus very high risk)
However firms should still continue to innovate in terms of
products and processes to prevent competitors from
superseding them.

8. Types of inovation strategies
Offensive
Defensive
Imitative
Dependent
Traditional

9. Offensive Strategy

This strategy is designed to achieve technical and
market leadership by being ahead of competitors
in the introduction of new product/process.
This strategy requires
– Strong R&D department
– Special relationship with the world science &
technology system

10. Cont’d
Firm not only need to be good in R&D, it will also
need to be able to educate both it’s customers and
its own personnel (additional cost to the company)

11. Defensive Strategy
Its does not mean there’s no R&D. may be just as
research intensive as an “offensive policy” but the
defensive innovators just do not wish to be 1st in the
world or left behind
This strategy requires :
– Capability of moving rapidly once they decide that the
time is ripe
– Models at least as good as the early innovators
– Technical advances to differentiate their products, but
at a lower cost

12. Cont’d
At Oligopoly Markets
– Defensive R & D is typical
– A form allowing the firm to react and adapt to the technical
changes introduced to competitors

13. Imitative Strategy
Imitative firm content to follow leaders in established
technologies & generally rely on pioneering works of
others
It is contented to follow some way behind the leaders
Characteristic:
• Save money from buying license unless the lag is short
• Save money from R&D and most probably training costs

14. Cont’d
Why imitating?
• Geographical area where the firm enjoys special
advantages (varying from politically privileged
position to tariff protection)
• Advantages in lower labor costs, plant investment
cost, energy supplies or material costs
• Advantages in managerial efficiency and in much
lower overhead costs (fact that they do not need to
spend heavily on R&D, patents, training and
technical services ect)

15. Dependent Strategy
Dependent strategy involves acceptance of a
satellite or subordinate role in relation to other
stronger firms
The firm does not attempt to initiator even imitate
technical changes in it product

16. Cont’d
Characteristic
• Usually rely on its customers to supply technical
specification for new product, and technical advice
in introducing it
• Supplying components or doing subcontract works
• Typically, lost all initiative in product design and
has no R&D facilities

17. Traditional Strategy
• Lack of technical capacity to initiate product changes of
a far reaching character
• Ability to cope with design changes (Aesthetic design
fine tuning)
Characteristics
• Firms see no reason to change its product because;
– Market does not demand a change
– Competition does not compel it to do so
• Technology often based on craft skills
 • Scientific inputs are minimal or nonexistent

18. Cont’d
Traditional firms
• Demand for products may be strong because of
their traditional craft skills
• May have good survival power even in highly
industrialized economies
• Vulnerable to technical changes
• Incapable of initiating technical innovation