ENTREPRENEURIAL STRATEGY AND

COMPETITIVE DYNAMICS

Start-up ventures
Major corporations
Entrepreneurship
New Value
Creation

Family-owned
businesses

Non-profit organizations
Established institutions

Opportunity

Resources

Entrepreneur(s)

Hobbies that grow

into business or
lead to inventions

Current or
past work
experiences

Sources of
Opportunities
for Start Ups

Chance events

Suggestions of
friends and
family

Opportunity Recognition
-The process of discovering
and evaluating the changes in
the business environment:
Technology
Socio-Cultural
Shift in Consumer Demand

Change

Need of existing
customers

Sources of
Opportuniti
es for Start
Ups

Technology

Suggestions
of suppliers

Discovery phase
Period when you first become aware of a new
business concept
May be spontaneous and unexpected
May occur as the result of deliberate search for
New venture projects
Creative solutions to business problems

Evaluation phase
Evaluating an opportunity (can it be developed into
a full pledged new venture?)
Tal to potential target customers
Discuss it with production or logistics managers
Conduct feasibility analysis

Market potential
Product concept testing
Focus groups
Trial runs with end users

Attractive
There has to be a market
Achievable
Must be practical and physically possible

Durable
Long-term
Value Creating
Profitable

Before launching opportunity as a business

Consider the resources available to undertake it
Consider the characteristics of the entrepreneur pursuing it

Major challenge for entrepreneurial firm is

lack or resources
Money
Human capital
Social capital

Financial Resources
Early-stage financing
Personal savings, family, and friends
Bank financing, public financing, venture capital
Debt
Equity

GLAMOROUS/
SUPERSTARS

CONSTRAINED
INNOVATION

High

Low

- Constrained be low
ambitions or lack of capital,
personnel or information

technology centers

ECONOMIC CORE
- Typified by corner dairy,
house cleaning franchisees
and people in professional
occupation

Few high superstars in

AMBITIOUS
-

Owners are skilled at

spotting new opportunities

Low

High
GROWTH

Financial resources (Going concern)

Later-stage financing
Angel investors
Commercial banks

The challenge of financing a business venture

significantly increases if you are a 20 year old
entrepreneur.
The key to successfully raising capital is to
open your mind and expand your choices.
Look beyond your parents of personal credit cards

A solid business plan and a good business

concept will attract some business angels.

Human Capital
Skilled
management

Smart with
high integrity

Social Capital
Social
Network: prior
jobs, industry
organizations
Local business
groups

Government
Resources
Loan
guarantee
programs
contracts

Launching a new venture requires a special

kind of leadership
Courage
Belief in ones convictions
Energy to work hard

Three characteristics
Vision
Dedication and drive
Commitment to excellence

Vision may be entrepreneurs most important

asset
Ability to envision realities that do not yet exist
Exercise a kind of transformational leadership
Able to share with others

Dedication and drive are reflected in hard

work

Patience
Stamina
Willingness to work long hours
Internal motivation
Intellectual commitment to the enterprise
Strong enthusiasm for work and life

To achieve excellence, venture founders and

small business owners must

Understand the customer

Provide quality products and services
Pay attention to details
Continuously learn
Surround themselves with good people

Charisma along is not enough to grow a

venture.
People should fit with the companys culture,
goals, and work ethic.

Here are 10 management lessons from a

young entrepreneur, Scott Smigler, the
founder of Exclusive Concepts Inc.:

1. Its all about perseverance.

2. Understand the value of mentorship and
teamwork
3. Stick to your niche.
4. Stay on top of news that affects your clients.
5. Communication is key.
6. Capitalization is crucial.
7. Communication of unwavering honesty and
integrity.
8. Stay on top of the curve.
9. Take ownership in your clients success/
10. Never stop marketing.

Best strategy for the enterprise will be

determined to some extent by
A variable opportunity, resources, and
entrepreneur(s)
Other conditions in the business environment

Can use various tools and techniques to

determine strategic choices
Five forces analysis
Value chain analysis

Pioneer New
Entry

Entry into an industry with radical new product or

highly innovative service that changes the way
business is conducted.

Imitative
New Entry

Entry into an industry with products or services that

capitalize on proven market successes and that
usually has a strong marketing orientation.

Adaptive
New Entry

Entry into an industry by offering a product or service

that is somewhat new and sufficiently different to
create value for customers on current market trends

How new ventures can achieve competitive

advantages
Overall cost leadership

Simple organizational structures

More quickly upgrade technology and integrate
feedback from the marketplace
Make timely decisions that affect cost

Differentiation

Use new technology

Deploy resources in a radical new way

Focus

Niche strategies fit the small business mold

A key issue is the scope of a small firms

strategic efforts relative to those of its
competitors
Pursue combination strategies
Combine best features of low-cost, differentiation, and
focus strategies
Flexibility and quick decision-making ability of a small
firm not laden with layers of bureaucracy

New competitive
action

Likelihood of
competitive
reaction

Threat
analysis

Motivation
and capability
to respond

Types of
competitive action

Strategic Actions major commitments of

distinctive and specific resources to strategic
initiatives

Entering new markets

New product introductions
Changing production capacity
Mergers/alliances

Price cutting or increases

Product/services enhancements
Increased marketing efforts
New distribution channels

Tactical Actions refinements of extensions of

strategies usually involving minor resources
commitments

Devastate rivals profit sanctuaries

Plagiarize with pride
Deceive the competition
Unleash massive and overwhelming force
Raise competitors costs

How a competitor is likely to respond will

depend on three factors
Market dependence
competitors resources
The reputation of the firm that initiates the action
(actors reputation)