BUS 499, Week 10 Lecture: Strategic Entrepreneurship Slide # Topic Narration 1 Introduction Welcome to Senior Seminar in Business Administration. In this lesson we will discuss Strategic Entrepreneurship. Please go to the next slide. 2 Objectives Upon completion of this lesson, you will be able to: Analyze strategic entrepreneurship and corporate entrepreneurship. Please go to the next slide. 3 Supporting Topics In order to achieve this objective, the following supporting topics will be covered: Entrepreneurship and entrepreneurial opportunities; Innovation; Entrepreneurs; International entrepreneurship; Internal innovation; Implementing internal innovation; Innovation through cooperative strategies; Innovation through acquisitions; and Creating value through strategic entrepreneurship. Please go to the next slide. 4 Entrepreneurship and Entrepreneurial Opportunities Entrepreneurship is the process by which individuals or groups identify and pursue entrepreneurial opportunities without being immediately constrained by the resources they currently control. Entrepreneurial opportunities are conditions in which new goods or services can satisfy a need in the market. These opportunities exist because of competitive imperfections in markets and among the factors of production used to produce them or because they were independently developed by entrepreneurs. Entrepreneurial opportunities come in a host of forms such in a new market. Firms should be receptive to pursuing entrepreneurial opportunities whenever and wherever they may surface. The essence of entrepreneurship is to identify and exploit entrepreneurial opportunities; that is, opportunities others do not see or for which they do not recognize the commercial potential. Please go to the next slide. 5 Innovation Innovation is a key outcome firms seek through entrepreneurship and is often the source of competitive success, especially in turbulent, highly competitive environments. Firms engage in three types of innovative activity: Invention is the act of creating or developing a new product or process. Innovation is the process of creating a commercial product from an invention. Innovation begins after an invention is chosen for development. Thus, an invention brings something new into being, while an innovation brings something new into use. Accordingly, technical criteria are used to determine the success of an innovation. Finally, imitation is the adoption of a similar innovation by different firms. Imitation usually leads to product or process standardization, and products based on imitation often are offered at lower prices, but without as many features. Entrepreneurship is critical to innovative activity in that it acts as the linchpin between invention and innovation. Please go to the next slide. 6 Check Your Understanding 7 Entrepreneurs Entrepreneurs are individuals, acting independently or as part of an organization, who see an entrepreneurial opportunity a ...

1. BUS 499, Week 10 Lecture: Strategic Entrepreneurship
Slide #
Topic
Narration
1
Introduction
Welcome to Senior Seminar in Business Administration.
In this lesson we will discuss Strategic Entrepreneurship.
Please go to the next slide.
2
Objectives
Upon completion of this lesson, you will be able to:
Analyze strategic entrepreneurship and corporate
entrepreneurship.
Please go to the next slide.
3
Supporting Topics
In order to achieve this objective, the following supporting
topics will be covered:
Entrepreneurship and entrepreneurial opportunities;
Innovation;
Entrepreneurs;
International entrepreneurship;
Internal innovation;
Implementing internal innovation;
Innovation through cooperative strategies;
Innovation through acquisitions; and
Creating value through strategic entrepreneurship.

2. Please go to the next slide.
4
Entrepreneurship and Entrepreneurial Opportunities
Entrepreneurship is the process by which individuals or groups
identify and pursue entrepreneurial opportunities without being
immediately constrained by the resources they currently control.
Entrepreneurial opportunities are conditions in which new
goods or services can satisfy a need in the market. These
opportunities exist because of competitive imperfections in
markets and among the factors of production used to produce
them or because they were independently developed by
entrepreneurs. Entrepreneurial opportunities come in a host of
forms such in a new market. Firms should be receptive to
pursuing entrepreneurial opportunities whenever and wherever
they may surface.
The essence of entrepreneurship is to identify and exploit
entrepreneurial opportunities; that is, opportunities others do
not see or for which they do not recognize the commercial
potential.
Please go to the next slide.
5
Innovation
Innovation is a key outcome firms seek through
entrepreneurship and is often the source of competitive success,
especially in turbulent, highly competitive environments.
Firms engage in three types of innovative activity:
Invention is the act of creating or developing a new product or
process.
Innovation is the process of creating a commercial product from
an invention. Innovation begins after an invention is chosen for

3. development. Thus, an invention brings something new into
being, while an innovation brings something new into use.
Accordingly, technical criteria are used to determine the success
of an innovation.
Finally, imitation is the adoption of a similar innovation by
different firms. Imitation usually leads to product or process
standardization, and products based on imitation often are
offered at lower prices, but without as many features.
Entrepreneurship is critical to innovative activity in that it acts
as the linchpin between invention and innovation.
Please go to the next slide.
6
Check Your Understanding
7
Entrepreneurs
Entrepreneurs are individuals, acting independently or as part of
an organization, who see an entrepreneurial opportunity and
then take risks to develop an innovation to pursue it.
Entrepreneurs are found throughout an organization, from top-
level managers to those working to produce a firm’s goods or
services.
Evidence suggests that successful entrepreneurs have an
entrepreneurial mind-set. The person with an entrepreneurial
mind-set values uncertainty in the marketplace and seeks to
continuously identify opportunities with the potential to lead to
important innovations. Because it has the potential to lead to
continuous innovations, an individual’s entrepreneurial mind-
set can be a source of competitive advantage for a firm.
Please go to the next slide.
8
International Entrepreneurship

4. International entrepreneurship is a process in which firms
creatively discover and exploit opportunities that are outside
their domestic markets in order to develop a competitive
advantage. In general, internationalization leads to improved
firm performance. However, the decision to internationalize
exposes firms to various risks, including:
Unstable foreign currencies;
Problems with market efficiencies;
Insufficient infrastructures to support businesses; and
Limitations on market size.
Please go to the next slide.
9
Internal Innovation
In established organizations, most innovation comes from
successful research and development through the integration of
skills available in the global workforce.
Increasingly, in the twenty-first century, R&D is becoming the
most critical factor in gaining and sustaining a competitive
advantage. Although critical to long-term corporate success, the
outcomes of R&D investments are uncertain and often not
achieved in a short term.
Most innovations are incremental; that is, they build on existing
knowledge bases and provide small improvements in the current
product lines. In contrast, radical innovations usually provide
significant technological breakthroughs and create new
knowledge.
Autonomous strategic behavior is a bottom up process in which
product champions pursue new ideas. This is often done through
a political process in which they develop and coordinate the
commercialization of a new good or service until it achieves
success in the marketplace. A product champion is an

5. organizational member with an entrepreneurial vision of a new
good or service who seeks to create support for its
commercialization. Product champions play critical roles in
moving innovations forward. Autonomous strategic behavior is
based on a firm’s wellspring of knowledge and resources that
are the sources of the firm’s innovation.
The second of the two forms of internal corporate venturing,
induced strategic behavior, is a top- down process whereby the
firm’s current strategy and structure foster innovations that are
closely associated with that strategy and structure. In this form
of venturing, the strategy in place is filtered through a matching
structural hierarchy. Induced strategic behavior results in
internal innovations that are highly consistent with the firm’s
current strategy. As a result the top management team plays a
key role in induced strategic behavior, suggesting that the
composition and the effectiveness of the team are important.
Please go to the next slide.
10
Implementing Internal Innovation
An entrepreneurial mind-set is required to be innovative and to
develop successful internal corporate ventures. Having
processes and structures in place through which a firm can
successfully implement the outcomes of internal corporate
ventures and commercialize the innovations is also critical. In
addition, effective integration of various functions involved in
innovation processes is required to implement the incremental
and radical innovations.
Cross-functional product development teams facilitate efforts to
integrate activities associated with different organizational
functions. In addition, strategic leadership is highly important
for achieving cross-functional integration and promoting
innovation.

6. Please go to the next slide.
11
Innovation Through Cooperative Strategies
Virtually all firms lack the breadth and depth of resources in
their R&D activities needed to internally develop a sufficient
number of innovations to meet the needs of the market and
remain competitive. As such, firms must be open to using
external resources to help produce innovations. Alliances with
other firms can contribute to innovations in several ways. First,
they provide information on new business opportunities and
how to exploit them. In other instances, firms use cooperative
strategies to align what they believe are complementary assets
with the potential to lead to future innovations.
However, there are conflicts in trying to work together to reach
a mutual goal. Cooperative strategy participants also take a risk
that a partner will appropriate a firm’s technology or knowledge
and use it to enhance its own competitive abilities. To minimize
these risks, firms need to carefully select partners that have
complementary skills as well as compatible strategic goals.
Please go to the next slide.
12
Innovation Through Acquisitions
Firms sometimes acquire companies to gain access to their
innovations and to their innovative capabilities. One reason
companies make these acquisitions is that the capital market
values growth; acquisitions provide a means to rapidly extend
one or more product lines and increase the firm’s revenues. A
key risk of acquisitions is that a firm may substitute an ability
to buy innovations for an ability to produce innovations
internally.
Firms must manage the acquisitions well so that they remain

7. productive and continue to produce innovation after the
acquired firm is merged into the acquired firm.
Please go to the next slide.
13
Creating Value Through Strategic Entrepreneurship
Newer entrepreneurial firms often are more effective than larger
established firms in the identification of entrepreneurial
opportunities. Consequently, they produce more radical
innovations. Entrepreneurial ventures’ strategic flexibility and
willingness to take risks partially account for their radical
innovations.
To be entrepreneurial, firms must develop an entrepreneurial
mind-set among their managers and employees. Mangers must
emphasize the management of their resources, particular human
capital and social capital.
Entrepreneurial ventures and large firms now regularly enter
international markets. Thus, by developing resources, taking
advantage of opportunities in domestic and international
markets, and using the resources and knowledge gained in these
markets to be innovative, firms achieve competitive advantages.
In so doing, they create value for their customers and
shareholders.
In addition, firms practicing strategic entrepreneurship
contribute to a country’s economic development.
Please go to the next slide.
14
Summary
We have reached the end of this lesson. Let’s take a look at
what we have covered.

8. First, we discussed entrepreneurship. Entrepreneurship is the
process by which individuals or groups identify and pursue
entrepreneurial opportunities without being immediately
constrained by the resources they currently control.
Next, we went over innovation. Innovation is a key outcome
firms seek through entrepreneurship and is often the source of
competitive success, especially in turbulent, highly competitive
environments.
We also looked at entrepreneurs. Entrepreneurs are individuals,
acting independently or as part of an organization, who see an
entrepreneurial opportunity and then take risks to develop an
innovation to pursue it.
Then we examined internal innovations and its implementation.
There are two types of innovations: incremental and radical.
Incremental innovations are built on existing knowledge bases
and provide small improvement in the current product lines and
radical innovations, provide significant technology
breakthrough and create new knowledge.
We concluded the lesson with a discussion on creating value
through strategic entrepreneurship. The practice of strategic
entrepreneurship creates value for all stakeholders and
contributes to the economic development of countries.
This completes this lesson.
Senior Seminar in Business Administration
BUS 499
Strategic Entrepreneurship

9. Welcome to Senior Seminar in Business Administration.
In this lesson we will discuss Strategic Entrepreneurship.
Please go to the next slide.
Objectives
Upon completion of this lesson, you will be able to:
Analyze strategic entrepreneurship and corporate
entrepreneurship.
Upon completion of this lesson, you will be able to:
Analyze strategic entrepreneurship and corporate
entrepreneurship.
Please go to the next slide.
Supporting Topics
Entrepreneurship and Entrepreneurial Opportunities
Innovation
Entrepreneurs
International Entrepreneurship
Internal Innovation
Implementing Internal Innovation
Innovation Through Cooperative Strategies
Innovation Through Acquisitions
Creating Value Through Strategic Entrepreneurship

10. In order to achieve this objective, the following supporting
topics will be covered:
Entrepreneurship and entrepreneurial opportunities;
Innovation;
Entrepreneurs;
International entrepreneurship;
Internal innovation;
Implementing internal innovation;
Innovation through cooperative strategies;
Innovation through acquisitions; and
Creating value through strategic entrepreneurship.
Please go to the next slide.
Entrepreneurship and Entrepreneurial Opportunities
Definition
Entrepreneurial Opportunities
Essence of Entrepreneurship
Entrepreneurship is the process by which individuals or groups
identify and pursue entrepreneurial opportunities without being
immediately constrained by the resources they currently control.
Entrepreneurial opportunities are conditions in which new
goods or services can satisfy a need in the market. These

11. opportunities exist because of competitive imperfections in
markets and among the factors of production used to produce
them or because they were independently developed by
entrepreneurs. Entrepreneurial opportunities come in a host of
forms such in a new market. Firms should be receptive to
pursuing entrepreneurial opportunities whenever and wherever
they may surface.
The essence of entrepreneurship is to identify and exploit
entrepreneurial opportunities; that is, opportunities others do
not see or for which they do not recognize the commercial
potential.
Please go to the next slide.
Innovation
Invention
The act of creating or developing a new product or process
Innovation
The process of creating a commercial product from an invention
Imitation
The adoption of a similar innovation by different firms
Innovation is a key outcome firms seek through
entrepreneurship and is often the source of competitive success,
especially in turbulent, highly competitive environments.
Firms engage in three types of innovative activity:
Invention is the act of creating or developing a new product or
process.
Innovation is the process of creating a commercial product from
an invention. Innovation begins after an invention is chosen for

12. development. Thus, an invention brings something new into
being, while an innovation brings something new into use.
Accordingly, technical criteria are used to determine the success
of an innovation.
Finally, imitation is the adoption of a similar innovation by
different firms. Imitation usually leads to product or process
standardization, and products based on imitation often are
offered at lower prices, but without as many features.
Entrepreneurship is critical to innovative activity in that it acts
as the linchpin between invention and innovation.
Please go to the next slide.
Check Your Understanding
6
Entrepreneurs
Definition
Individuals, acting independently or as part of an organization,
who see an entrepreneurial opportunity and then take risks to
develop an innovation to pursue it
Entrepreneurial Mind-Set
Values uncertainty in the marketplace
Seeks to continuously identify opportunities
Entrepreneurs are individuals, acting independently or as part of

13. an organization, who see an entrepreneurial opportunity and
then take risks to develop an innovation to pursue it.
Entrepreneurs are found throughout an organization, from top-
level managers to those working to produce a firm’s goods or
services.
Evidence suggests that successful entrepreneurs have an
entrepreneurial mind-set. The person with an entrepreneurial
mind-set values uncertainty in the marketplace and seeks to
continuously identify opportunities with the potential to lead to
important innovations. Because it has the potential to lead to
continuous innovations, an individual’s entrepreneurial mind-
set can be a source of competitive advantage for a firm.
Please go to the next slide.
International Entrepreneurship
Definition
Process in which firms creatively discover and exploit
opportunities that are outside their domestic markets
Done to develop a competitive advantage
Risks
Unstable foreign currencies
Problems with market efficiencies
Insufficient infrastructures to support businesses
Limitations on market size
International entrepreneurship is a process in which firms
creatively discover and exploit opportunities that are outside
their domestic markets in order to develop a competitive
advantage. In general, internationalization leads to improved
firm performance. However, the decision to internationalize
exposes firms to various risks, including:

14. Unstable foreign currencies;
Problems with market efficiencies;
Insufficient infrastructures to support businesses; and
Limitations on market size.
Please go to the next slide.
8
Internal Innovation
Innovation From Successful R&D
Outcomes are uncertain
Short term
Incremental innovations
Build on existing knowledge bases
Provide small improvements
Radical innovations
Provide significant technological breakthroughs
Create new knowledge
In established organizations, most innovation comes from
successful research and development through the integration of
skills available in the global workforce.
Increasingly, in the twenty-first century, R&D is becoming the
most critical factor in gaining and sustaining a competitive
advantage. Although critical to long-term corporate success, the
outcomes of R&D investments are uncertain and often not
achieved in a short term.
Most innovations are incremental; that is, they build on existing
knowledge bases and provide small improvements in the current
product lines. In contrast, radical innovations usually provide

15. significant technological breakthroughs and create new
knowledge.
Autonomous strategic behavior is a bottom up process in which
product champions pursue new ideas. This is often done through
a political process in which they develop and coordinate the
commercialization of a new good or service until it achieves
success in the marketplace. A product champion is an
organizational member with an entrepreneurial vision of a new
good or service who seeks to create support for its
commercialization. Product champions play critical roles in
moving innovations forward. Autonomous strategic behavior is
based on a firm’s wellspring of knowledge and resources that
are the sources of the firm’s innovation.
The second of the two forms of internal corporate venturing,
induced strategic behavior, is a top- down process whereby the
firm’s current strategy and structure foster innovations that are
closely associated with that strategy and structure. In this form
of venturing, the strategy in place is filtered through a matching
structural hierarchy. Induced strategic behavior results in
internal innovations that are highly consistent with the firm’s
current strategy. As a result the top management team plays a
key role in induced strategic behavior, suggesting that the
composition and the effectiveness of the team are important.
Please go to the next slide.
9
Implementing Internal Innovation
Have processes and structures in place
Integrate various functions
Have cross-functional product development teams

16. An entrepreneurial mind-set is required to be innovative and to
develop successful internal corporate ventures. Having
processes and structures in place through which a firm can
successfully implement the outcomes of internal corporate
ventures and commercialize the innovations is also critical. In
addition, effective integration of various functions involved in
innovation processes is required to implement the incremental
and radical innovations.
Cross-functional product development teams facilitate efforts to
integrate activities associated with different organizational
functions. In addition, strategic leadership is highly important
for achieving cross-functional integration and promoting
innovation.
Please go to the next slide.
10
Innovation Through Cooperative Strategies
Alliances with Other Firms
Provide information on new business opportunities and how to
exploit them
Align complementary assets
Risk
A partner will appropriate a firm’s technology
Virtually all firms lack the breadth and depth of resources in
their R&D activities needed to internally develop a sufficient
number of innovations to meet the needs of the market and
remain competitive. As such, firms must be open to using
external resources to help produce innovations. Alliances with
other firms can contribute to innovations in several ways. First,
they provide information on new business opportunities and
how to exploit them. In other instances, firms use cooperative

17. strategies to align what they believe are complementary assets
with the potential to lead to future innovations.
However, there are conflicts in trying to work together to reach
a mutual goal. Cooperative strategy participants also take a risk
that a partner will appropriate a firm’s technology or knowledge
and use it to enhance its own competitive abilities. To minimize
these risks, firms need to carefully select partners that have
complementary skills as well as compatible strategic goals.
Please go to the next slide.
11
Innovation Through Acquisitions
To Gain Access
To innovations
To capabilities
Capital Market Values Growth
Acquisitions provide a means to rapidly extend one or more
product lines and increase the firm’s revenues
Risk
Substitute an ability to buy innovations for an ability to produce
innovations internally
Firms sometimes acquire companies to gain access to their
innovations and to their innovative capabilities. One reason
companies make these acquisitions is that the capital market
values growth; acquisitions provide a means to rapidly extend
one or more product lines and increase the firm’s revenues. A
key risk of acquisitions is that a firm may substitute an ability
to buy innovations for an ability to produce innovations
internally.

18. Firms must manage the acquisitions well so that they remain
productive and continue to produce innovation after the
acquired firm is merged into the acquired firm.
Please go to the next slide.
12
Creating Value Through Strategic Entrepreneurship
Entrepreneurial Ventures
Strategic flexibility
Willingness to take risks
Have an entrepreneurial mind-set among their managers and
employees
Competitive Advantages in International Markets
Take advantage of opportunities
Use resources and knowledge
Newer entrepreneurial firms often are more effective than larger
established firms in the identification of entrepreneurial
opportunities. Consequently, they produce more radical
innovations. Entrepreneurial ventures’ strategic flexibility and
willingness to take risks partially account for their radical
innovations.
To be entrepreneurial, firms must develop an entrepreneurial
mind-set among their managers and employees. Mangers must
emphasize the management of their resources, particular human
capital and social capital.
Entrepreneurial ventures and large firms now regularly enter
international markets. Thus, by developing resources, taking
advantage of opportunities in domestic and international
markets, and using the resources and knowledge gained in these
markets to be innovative, firms achieve competitive advantages.

19. In so doing, they create value for their customers and
shareholders.
In addition, firms practicing strategic entrepreneurship
contribute to a country’s economic development.
Please go to the next slide.
13
Summary
Entrepreneurship and Entrepreneurial Opportunities
Innovation
Entrepreneurs
International Entrepreneurship
Internal Innovation
Implementing Internal Innovation
Innovation Through Cooperative Strategies
Innovation Through Acquisitions
Creating Value Through Strategic Entrepreneurship
We have reached the end of this lesson. Let’s take a look at
what we have covered.
First, we discussed entrepreneurship. Entrepreneurship is the
process by which individuals or groups identify and pursue
entrepreneurial opportunities without being immediately
constrained by the resources they currently control.
Next, we went over innovation. Innovation is a key outcome
firms seek through entrepreneurship and is often the source of
competitive success, especially in turbulent, highly competitive
environments.

20. We also looked at entrepreneurs. Entrepreneurs are individuals,
acting independently or as part of an organization, who see an
entrepreneurial opportunity and then take risks to develop an
innovation to pursue it.
Then we examined internal innovations and its implementation.
There are two types of innovations: incremental and radical.
Incremental innovations are built on existing knowledge bases
and provide small improvement in the current product lines and
radical innovations, provide significant technology
breakthrough and create new knowledge.
We concluded the lesson with a discussion on creating value
through strategic entrepreneurship. The practice of strategic
entrepreneurship creates value for all stakeholders and
contributes to the economic development of countries.
This completes this lesson.
14
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