Strategic thinking by entrepreneurs

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This presentation describes how a business entrepreneur unknowingly practices strategy/strategic thinking. Strategy is after all matching resources (and limited at that for start up entrepreneur) to attain an objectives. Various non quantitative non complex qualitative ideas are reviewed to prove that small business entrepreneurs practice strategy

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Strategic thinking by entrepreneurs

  1. 1. Strategic Thinking by Entrepreneurs Lecture by Prof. Jorge Saguinsin at the Ateneo Graduate School of Business Makati Philippines
  2. 2. Question: Entrepreneurs do not practice/understand strategy?
  3. 3. Strategy as ordinarily understood
  4. 4. Small entrpereneurial businesses must necessarily be strategic!
  5. 5. Three characteristics of entrepreneurial business: <ul><li>Growth </li></ul><ul><li>Differentiation </li></ul><ul><li>Strategic Direction </li></ul>
  6. 6. <ul><li>A business that lacks any one or all of the three is a “me too” business. It is a business, but not an entrepreneurial business. It is where thousands of small enterprise are. </li></ul><ul><li>And is bound to die early… </li></ul>
  7. 7. Definition of Strategy: <ul><li>“ A concept of how objective/s are met </li></ul><ul><li>with available resources.” </li></ul><ul><li>A new enterprise does not have much </li></ul><ul><li>resources; resources are meager; the </li></ul><ul><li>entrepreneur is the RESOURCE! </li></ul>
  8. 8. The entrepreneur: the means to success!
  9. 9. Machiavelli “ The end justifies the means” -The Prince
  10. 10. The ends and the means…
  11. 11. Speaking of capital: <ul><li>The start up money of the entrepreneur is his savings and some money borrowed from relatives and friends. </li></ul><ul><li>The real capital is capito – head! </li></ul>
  12. 12. Capital – capito - Head
  13. 13. Process in strategic planning: <ul><li>Allocation of resource </li></ul><ul><li>Scanning the relevant environment </li></ul><ul><li>To reach desired goals/objectives </li></ul>
  14. 14. Small amounts as start up capital <ul><li>Rev. Butch Salvador started his Car Magic business with ten pesos to photo copy brochures! </li></ul><ul><li>Wellington Soong of the Jaguar franchise started his business with one hundred pesos to print brochures! </li></ul><ul><li>Toby’s Peanuts started with P3t pesos! </li></ul>
  15. 15. Starting with very little capital
  16. 16. Cellphones are more expensive than their start up capital!
  17. 17. Objectives for the entrepreneur <ul><li>To survive </li></ul><ul><li>To thrive </li></ul><ul><li>To dominate competition </li></ul><ul><li>To win over competitors </li></ul>
  18. 18. Military Strategy <ul><li>“ Strategy is practical adaptation of means </li></ul><ul><li>placed at general’s disposal for the attainment of object of war” </li></ul><ul><li>(Helmuth Karl Berhard Graf Von Molkte, 1800-189l) </li></ul>
  19. 19. Von Molkte
  20. 20. Military Strategy <ul><li>“ Tactics is the art of using troops in battle;” </li></ul><ul><li>“ Strategy is the art of using battles to win war” </li></ul><ul><li>(Carl Von Clausewitz 1780- 1731) </li></ul>
  21. 21. Clausewitz
  22. 22. Liddell Hart – the strategy of indirect approach
  23. 23. Sun Tzu – The Art of War
  24. 24. Sun Tzu
  25. 25. Strategic Thinking Practices of Entrepreneurs
  26. 26. Business Strategy <ul><li>“ Competitive strategy is about being different. It means deliberately choosing a set of activities that deliver a unique set of values…” </li></ul><ul><li>(Michael Porter, 1947) </li></ul>
  27. 27. Michael Porter
  28. 28. Value chain
  29. 29. Answering a set of questions <ul><li>Where are we now? </li></ul><ul><li>Where are we going? </li></ul><ul><li>How do we get there? </li></ul><ul><li>(-Peter Edelman, SVP of Voith Turbo) </li></ul>
  30. 30. Interplay of C’s <ul><li>CUSTOMERS </li></ul><ul><li>COMPANY </li></ul><ul><li>COMPETITORS </li></ul><ul><li>( -Kenichi Ohmae, 1943) </li></ul>
  31. 31. Kenichi Ohmae – Mind of the Strategist
  32. 32. Mental Model <ul><li>“ Deeply ingrained assumptions, generalizations, pictures, images, that influence how we view the world and take action…” </li></ul><ul><li>(Peter Senge, The Fifth Discipline , l992) </li></ul>
  33. 33. Peter Senge – The Fifth Discipline
  34. 34. The Five Disciplines
  35. 35. Vision/Point of View <ul><li>Importance of well articulated sense of purpose for the business enterprise. </li></ul><ul><li>Purpose precedes products and other activities. The purpose dictate </li></ul><ul><li>how to achieve the objectives, </li></ul>
  36. 36. Vision and My Vision Board
  37. 37. A perfect fit: <ul><li>Competency - where you are good at </li></ul><ul><li>Passion </li></ul><ul><li>Economic engine </li></ul><ul><li>(Jim Collins, Good to Great ) </li></ul>
  38. 38. Good to Great - Jim Collins
  39. 39. Being goal oriented: <ul><li>SMART </li></ul><ul><li>“ Begin with the end in mind” </li></ul><ul><li>(Stephen Covey) </li></ul><ul><li>“ Running a business is the opposite of reading a book. You begin with end in mind “ (Harold Geneen, fmr </li></ul><ul><li>chairman of ITT from Managing ) </li></ul>
  40. 40. Begin with the end in mind..
  41. 41. Managing by Harold Geneen
  42. 42. Business is unlike reading a book; you begin with the end and then you go back to the beginning…
  43. 43. Opportunity seeking, screening, seizing Whenever enterprises practice these, they are engaged in strategic management!
  44. 44. Quotations: <ul><li>“ In order to predict the future, you have to invent it” - Ronald Pineda, owner of Folded and Hung. </li></ul><ul><li>“ There are three types of people: those who do not know what happened, those who watch things happen, and those who make things happen.” </li></ul><ul><li>“ Predicting rain does not matter’; building the ark does.” </li></ul><ul><li>“ In order to succeed, you have to know what you want” – Tom Dizon, St. Catherine Realty </li></ul>
  45. 45. Ronald Pineda – Folded and Hung
  46. 46. Who now says that entrepreneur do not practice/understand strategy?
  47. 47. Lecture for Ateneo Entrepreneurship Students Presented by : Prof Jorge Saguinsin [email_address] .com
  48. 48. Acknowledgement: <ul><li>Images were taken from Google images </li></ul><ul><li>The other ideas are taken from existing literature on strategy and entrepreneurship; </li></ul><ul><li>Quotations are from the entrepreneur guest of the presenter in his entrepreneurship class </li></ul>

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