Entrepreneurial Strategy:

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13
Chapter
Entrepreneurial Strategy Generating and
Exploiting New Entries
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What Is A New Entry?

• Offering A New Product To An Established/New
  Market
• Offering An Established Product To A new Market
• Creating A New Organization

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Resources As Competitive Advantage

• Resources- Firms Building Blocks, Inputs Into
  Production Process
• Must Be
• Valuable
• Rare
• Inimitable

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Creating Resource Bundle

• Entrepreneur- Has Ability To Obtain Recombine
  Resources
• Market Knowledge- Information, Technology,
  Know-How/Skills That Provide Insight To
  Market/Customers
• Technological Knowledge- Information, Technology
  Know-How/Skills That Provide Insight To Create
  New Knowledge

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Assessing New Entry Opportunity

• Information
• Prior Knowledge/Information Search
• Window Of Opportunity- Time When Environment Is
  Favorable
• Decision Making Under Uncertainty
• Error of Commission
• Error of Omission
• Decision To Exploit/Not Exploit New Entry

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Strategy ForNew Entry- First Movers

• Develop Cost Advantage
• Face Less Competition
• Secure Important Channels
• Better Positioned To Satisfy Customers
• Gain Expertise Through Participation

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First Mover Disadvantages

• Emerging Industries
• Demand Uncertainty- Difficult to Estimate Market
  Size, Speed Of Growth Its Key Dimensions
• Technological Uncertainty- Will Technology
  Perform, Alternate Technologies Emerge?
• Adaptation To New Environmental Conditions
• Customer Uncertainty- Newness

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OvercomingCustomer Uncertainty

• Informational Advertising
• Highlight Product Benefits Over Substitutions
• Create Frame Of Reference For Potential Customer
• Educate Customer- Set Industry Standard, Customer
  Loyalty

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Lead Time First Mover

• Lead Time- Period In Which 1st Mover Operates
  With Limited Competition
• Create Barriers To Entry For Competition
• Build Customer Loyalty
• Build Switching Costs
• Protect Product Uniqueness
• Secure Access To Sources Of Supply Distribution

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Risk Reduction Strategies

• Risk- Probability Of Downside Loss
• Derived From Entrepreneurs Uncertainties
• Market Demand
• Technological Development
• Actions Of Competitors

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Market Scope Strategy

• Scope- Choice Of Which Customers To Serve How
• Narrow-Scope- Reduces Competitive Risk
• Focus On Customized Products, Local Business,
  Craftsmanship
• Build Specialized Expertise/Knowledge
• High End Market High Profit Niche
• Broad-Scope- Offer Wide Range Of Products To Many
  Market Segments, Causes Increased Exposure To
  Competition

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Imitation Strategy

• Why?- Minimize Risk
• Types
• Franchising
• Me Too
• Minor Variation Of Launch Product
• Take Existing Product/Service To New Market
• Deliver Existing Product In New Way

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Liabilities Of Newness

• Costs Of Learning New Tasks
• Overlap/Gaps In Responsibilities Causes Internal
  Conflict
• Communication- Formal Informal

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Assets Of Newness

• Clean Slate- No Established Procedures, Systems,
  Etc.
• Heightened Ability To Learn New Knowledge-
  Competitive Advantage
• Respond To Change More Quickly- Flexibility