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Being Strategic and Entrepreneurial: Building Capabilities and Exploiting Opportunities in a Dynamic Competitive Landscape
 

Being Strategic and Entrepreneurial: Building Capabilities and Exploiting Opportunities in a Dynamic Competitive Landscape

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Presentation by management professor Michael Hitt at the 2012 Mays Summer Learning Seminar.

Presentation by management professor Michael Hitt at the 2012 Mays Summer Learning Seminar.

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    Being Strategic and Entrepreneurial: Building Capabilities and Exploiting Opportunities in a Dynamic Competitive Landscape Being Strategic and Entrepreneurial: Building Capabilities and Exploiting Opportunities in a Dynamic Competitive Landscape Presentation Transcript

    • Being Strategic and Entrepreneurial:Building Capabilities and Exploiting Opportunities in a Dynamic Competitive Landscape Michael A. Hitt July 2012
    • Competitive Landscape Every morning in Africa, a gazelle wakes up It knows that it must run faster than the fastest lion or it will be killed Every morning a lion wakes up It knows that it must outrun the slowest gazelle or it will starve to death It doesn’t matter if you are a lion or gazelle, when the sun comes up, you had better start running(Friedman (2005)
    • The New Competitive LandscapeGlobal Economic and Political Discontinuities and DisequilibriumBlurring of Industry BoundariesHypercompetitive MarketsExtreme Emphasis on Price, Quality and SatisfactionIncreasing Importance of Innovation and Continuous Learning
    • Lack of Entrepreneurial MindsetPolaroid: Leader in “Instant Photography”  At One Time, Member of Top 50 Firms  Digital Technology Disrupted the Industry  Bankrupt; Dissolved BusinessBlockbuster: Unchallenged Leader in Video Rental  Netflix and Redbox  Satellite Rentals  Stock Value Fell to Near Zero  Filed Chapter 11
    • Lack of Entrepreneurial Mindset (cont’d) Barnes & Noble: Unparalleled Leader in Large Bookstore Retail Sales  Amazon.com  Electronic Books  Major Reductions in Stock Price  The Company Was Offered for Sale  Microsoft Invested $300 million (Nook)
    • Lack of Strategic MindsetStarted with a Unique Reverse-Auction System (patented) Allowing the Customer to Name the Price and Companies Can Respond to Provide if DesiredIn First Six Weeks, It Sold More than 10,000 Airline TicketsTotal Revenues Grew to Over $1 billion within 4 years of Operation
    • Lack of Strategic Mindset (cont’d)Microsoft Expedia—Almost Perfect Imitation ofPriceline’s patented Reverse Auction SystemTravelocity.com--Represents 420 Airlines Operatedby SABREHotwire—Alliance of Six Major AirlinesOrbitz.com—(Owned by American, Continental,Delta, Northwest and United)
    • Strategic and Entrepreneurial LeaderStrategic Leadership is the “ability to anticipate, envision,maintain flexibility, think strategically, and entrepreneuriallyand work with others to initiate changes that create a viablefuture for the organization.” Vision Continuous Development of Capabilities Emphasizing Innovation Building and Sustaining a Competitive Advantage
    • A Good VisionAmbitious/ChallengingReflects Uniqueness/DistinctivenessEmphasizes ExcellenceInspirational (Enthusiasm)Clear/Unambiguous
    • Building and Using Capabilities Resource Portfolio Building Capabilities Leveraging the Capabilities for Competitive Advantage
    • Gaining a Competitive AdvantageCompetitive Advantage: Providing Value to Customers that Is Superior to that Provided by CompetitorsHaving Capabilities that Are: Valuable Rare Difficult to Imitate Nonsubstitutable
    • Building CapabilitiesTo Gain a Competitive Advantage, Capabilities Must Havethe Following Characteristics  Valuable  RareTo Sustain a Competitive Advantage, Capabilities MustHave the Following Additional Characteristics  Difficult to Imitate  Nonsubstitutable
    • Building and Leveraging Capabilities Using the Portfolio of Resources Enriching Current Capabilities Developing New Capabilities Leveraging Capabilities for Advantage Exploit Current Products Innovate and Enter New Markets
    • Managing StrategicallyKnow Your Firm’s Strengths and Acknowledge Its WeaknessesKnow Your Competitors WellContinuously Seek to Gain and Maintain a CompetitiveAdvantageAct EntrepreneuriallyIdentify/Create New Business Opportunities and Exploit Them
    • Acting EntrepreneuriallyBuild Flexibility into Processes and Systems Open to Change Respond RapidlyBe Proactive instead of ReactiveBe Creative and Promote InnovationSeek External InputFocus on Creating New Products and Markets WhileSimultaneously Exploiting Existing Ones
    • If we know ourselves and our enemy, we will win
    • Conclusion“Champions do not become champions when theywin the event, but in the hours, weeks, months andyears they spend preparing for it. The victoriousperformance itself is merely the demonstration oftheir championship character.” T. Alan Armstrong