Enterpreneurial-strategy

BBA pokhara university

1. Entrepreneurial Strategy Chapter-3

2. Chapter Highlights New entry, generation of new entry opportunity Entry strategy for new entry exploitation Risk reduction strategy for new entry exploitation

3. New Entry

4. New Entry An entrepreneurial strategy has three Key Stages Generation of a new entry opportunity The exploitation of entry opportunity A feedback loop from the new entry generation and exploitation

5. Resource as a source of competitive advantages 2. Creating a resource bundle that is valuable, rare inimitable 3 . Assessing the Attractiveness of a New Entry Opportunity A. Generation of a New Entry Opportunity

6. Resource as a source of competitive advantages: Resource are the basis building blocks to a firm’s functioning and performance. A firm’s resource simply the inputs into the production process, such as machinery, capital and skilled employees. Resources must be: Valuable : enables a firm to pursue opportunities, neutralize threats, and offer valuable product and services to the customers. Rare : Possessed by few, (potential) competitors. Inimitable : Replication of this bundle of resources would difficult or costly for the potential competitors. A. Generation of a New Entry Opportunity

7. A. Generation of a New Entry Opportunity 2. Creating a resource bundle that is valuable, rare 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. Knowledge and experiences are the basis of entrepreneurial resources. It is because those wising to generate an innovation need to look to the unique experience and knowledge within themselves and their team.

8. A. Generation of a New Entry Opportunity Knowledge is particularly relevant to the generation of new entries and that is related to the market and technology. 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

9. 3. 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. 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. Window of Opportunity: The period of time when the environment is favorable for entrepreneurs to exploit a particular new entry. An example of window of opportunity closing is when another entrepreneur has entered the industry and erected substantial barrier. Likewise, government policy changes in the favor of entrepreneurs may also be defined as the window of opportunity. This, the viability of the new entry can be described as the window of opportunity. A. Generation of a New Entry Opportunity

10. Comfort with making a decision under uncertainty 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. 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 .( negative outcome from acting on the perceived opportunity) 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 .( negative outcome from not acting on the perceived opportunity) A. Generation of a New Entry Opportunity

11. Decision to Exploit or Not to Exploit the New Entry It depends on whether the entrepreneurs has what she or he believes to be sufficient information to make a decision, and whether the window is still open for this new entry opportunity. A determination by an entrepreneurs that he or has sufficient information depends On the stock of information( accumulated from search and prior knowledge) The level of comfort that this entrepreneur has with making the decision without perfect decision(which depends on a preference of one type of error over another)

12. Decision to Exploit or Not to Exploit the New Entry