Entrepreneurial StrategyGenerating and Exploiting New Strategies

1. BY:MADDY.KALEEM

2. Learning Objectives
 Generation of New Entry Opportunity
 Resources as a Sources of Opportunity
 Assessing the Attractiveness of New Entry Opportunity
 Information on New Entry
 Comfort with making decisions under uncertainty
 Decision to Exploit or Not Exploit the New Entry
 Risk Reduction strategies of New Entry Exploitation
 Market Scope Strategies
 Imitation Strategies
 Managing Newness
BY:MADDY.KALEEM

3. Entrepreneurial Strategy
 Entrepreneurial Strategy means a set of
decisions, actions and reactions that first
generate and than exploit over time, a new entry
in a way that maximizes the befits of newness
and minimizes its costs
BY:MADDY.KALEEM

4. Entrepreneurial Strategy
 Entrepreneurial strategy is the means through which
an organization establishes and re- establishes its
fundamental set of relationships with its
environment. It is strategy characterized by
widespread and more-or-less simultaneous change
in the pattern of decisions taken by an organization
BY:MADDY.KALEEM

5. New Entry
 Offering a new product to an established or new
market. Offering an established product to a new
market or creating a new organization.
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6. Resources as a Sources of
Opportunity
 Land
 Labor
 Capital
 Entrepreneur
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7. Generation of New Entry
Opportunity
BY:MADDY.KALEEM

8. Knowledge
Other
Resources
Resource
Bundle
Assessment of
New Entry
Opportunity
Organization
Risk Reduction
Strategy
Entry
Strategy
Firm
Performance
BY:MADDY.KALEEM

9. Generation of a new Entry Opportunity
Resources as a source of Competitive
Advantage
Understanding where a sustainable competitive
advantage comes from will provide some insight into
how entrepreneurs can generate new entries that are
likely to provide the basis for high firm from
performance over an extended period of time
BY:MADDY.KALEEM

10. Generation of a new Entry Opportunity
Entrepreneurial Resources: The ability to obtain,
and then recombine, resources into a bundle that
is valuable, rare, and inimitable
 Entrepreneurs combines the resources into such a
different ways as this bundle of resources provides
a firm its capacity to achieve superior performance
 For Example: A high skilled workforce will be
useless if the organization’s culture, teamwork,
communication does not support them
BY:MADDY.KALEEM

11. Generation of a new Entry Opportunity
Resources must be:
1. Valuable: enables a firm to pursue opportunities,
neutralize threats, and offer valuable product
and services to the customers
2. Rare: Possessed by few, (potential) competitors
3. Inimitable: Replication of this bundle of
resources would difficult or costly for the
potential competitors
BY:MADDY.KALEEM

12. Generation of a new Entry Opportunity
Resources must be:
1. Valuable: enables a firm to pursue opportunities,
neutralize threats, and offer valuable product
and services to the customers
2. Rare: Possessed by few, (potential) competitors
3. Inimitable: Replication of this bundle of
resources would difficult or costly for the
potential competitors
BY:MADDY.KALEEM

13. Generation of a new Entry Opportunity
Market Knowledge: Possession of Information,
technology, know-how, and skills that provide insight
into a market and its customers
Technological Knowledge: Possession of information,
technology, know-how and skills that provide insight
into ways to create new knowledge
BY:MADDY.KALEEM

14. Generation of a new Entry Opportunity
Assessing the Attractiveness of a New Entry
Opportunity
 The entrepreneur needs to determine whether it is in
fact valuable, rare, and inimitable by assessing
whether the new product or the new market are
sufficiently attractive to be worth exploiting and
developing
BY:MADDY.KALEEM

15. Generation of a new Entry Opportunity
Assessing the Attractiveness of a New Entry
Opportunity
 Information on a New Entry: The prior market and
technological knowledge used to create the
potential new entry can also be of benefit in
assessing the attractiveness of a particular
opportunity
BY:MADDY.KALEEM

16. Generation of a new Entry Opportunity
 Window of Opportunity: The period of time when the
environment is favorable for entrepreneurs to exploit a
particular new entry
BY:MADDY.KALEEM

17. Generation of a new Entry Opportunity
Comfort with making a decision under
Certainty
The trade-off between more information and the
likelihood that the window of opportunity will close
provides a dilemma for entrepreneurs
Here entrepreneurs usually commits two types of errors
BY:MADDY.KALEEM

18. Generation of a new Entry Opportunity
1. Error of Commission occurs from the decision to
pursue this new entry opportunity, only to find out
later that the entrepreneur had over estimated
his/her ability to create customer demand and/or to
protect the technology from imitation by
competitors. The cost of the entrepreneur were
derived from acting on the perceived opportunity
2. Negative Impact from Acting
BY:MADDY.KALEEM

19. Generation of a new Entry Opportunity
1 Error of Omission occurs from the decision not
to act on the new entry opportunity only to find
out later that the entrepreneur had
underestimated his/her ability to create
customer and/or protect the technology from
imitation by competitors. In this case, the
entrepreneur must live with the knowledge that
he let an attractive opportunity slip through his
fingers
2 Negative Impact from Not Acting
BY:MADDY.KALEEM

20. Generation of a new Entry Opportunity
Decision to Exploit or Not Exploit the New Entry Figure
3.2
Assessment of the new entry’s attractiveness
determining whether the entrepreneur believes she or
he can make the proposed new entry work
BY:MADDY.KALEEM

21. Knowledge
Other
Resources
Resource
Bundle
Assessment of
New Entry
Opportunity
Organization
Risk Reduction
Strategy
Entry
Strategy
Firm
Performance
The Decision to Exploit or Not To
Exploit New Entry Opportunity
BY:MADDY.KALEEM

22. The Decision to Exploit or Not To Exploit New
Entry Opportunity
 An entrepreneurial strategy has three Key Stages
1. Generation of a New Entry Strategy
2. Exploitation of New Entry Strategy
3. A feedback loop from the New strategy
BY:MADDY.KALEEM

23. Exploitation of New Entry Strategy
 The action of making use of and benefiting from
resources.
 "the Bronze Age saw exploitation of gold deposits
BY:MADDY.KALEEM

24. A feedback loop from the New
strategy
 A feedback loop is used to refer to a situation where
part of the output of a situation is used for new input..
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25. ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
Competitive Advantages of ‘being first’
1. First mover develop a cost advantage
2. First mover face less competitive rivalry
3. First movers can secure important channels
4. First movers are better positioned to satisfy
customers
5. First mover gain expertise through participation
BY:MADDY.KALEEM

26. ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
Disadvantages of ‘Being First Mover’
1. Demand Uncertainty: Considerable difficulty in
accurately estimating the potential size of the
market, how fast it will grow, and the key
dimensions along which it will grow
2. Technological Uncertainty: Considerable
difficulty in accurately assessing whether the
technology will perform and alternate
technologies will emerge and leapfrog (game)
over current technologies
BY:MADDY.KALEEM

27. ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
3. Uncertainty of Customers: Customers may have
considerable difficulty in accurately assessing whether
the new product or service provides value for them
BY:MADDY.KALEEM