recognizing entrepreneurial opportunities.pptx

8/14/2019 Recognizing Entrepreneurial Opportunities.pptx

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Recognizing Entrepreneurial Opportunities

Entrepreneurship

the creation of new value by an existing

organization or new venture that involves theassumption of risk.

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Entrepreneurial Strategy and Competitive Dynamics


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Recognizing Entrepreneurial

Opportunities

New valuecan be created in:

Start-up ventures

Major corporations

Family-owned businesses

Non-profit organizations

Established institutions

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Entrepreneurial Opportunities

Start-ups

Current or past work experiences

Hobbies that grow into businesses or leadto inventions

Suggestions by friends or family

Chance events Change

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Established firms

Needs of existing customers

Suggestions by suppliers Technological developments that lead to new

advances

Change

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U.S. Small Companies by Industry

8-5

Exhibit 8.1


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Opportunity recognition

the process of discovering and evaluating

changes in the business environment, such

as a new technology, socio-cultural trends, orshifts in consumer demand, that can be

exploited.

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Opportunity Analysis Framework

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Exhibit 8.3


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QUESTION

The majority of entrepreneurial start-ups are

financed with

A. Bank financing

B. Public financing

C. Venture capital financing

D. Personal savings and the contributions offamily and friends

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Discovery phase

the process of becoming aware of a new

business concept.

May be spontaneous and unexpected

May occur as the result of deliberate search

for new venture projects or creative solutions

to business problems

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Opportunity Recognition Process

Opportunity evaluation phase

involves analyzing an opportunity to

determine whether it is viable and strong

enough to be developed into a full-fledgednew venture.

Talk to potential target customers

Discuss it with production or logistics managers Conduct feasibility analysis

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Characteristics of Good Opportunities

Attractive Achievable

DurableValue

creating

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Sources of Capital for

Start-Up Firms

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Exhibit 8.5


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Entrepreneurial Resources

Human capital

Social capital

Government resources Small Business Administration

Government contracting

State and local governments

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http://www.sba.gov/


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Entrepreneurial Leadership

Launching a new venture requires a

special kind of leadership

Courage

Belief in ones convictions

Energy to work hard

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Visionmay be entrepreneurs most

important assetAbility to envision realities that do not yet exist

Exercise a kind of transformational leadership

Able to share with others8-15

Three characteristics Vision

Dedication and drive

Commitment toexcellence


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Dedication and driveare reflected in hard

work

Patience

Stamina

Willingness to work long hours

Internal motivation

Intellectual commitment to the enterprise

Strong enthusiasm for work and life

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To achieve excellence, entrepreneurs

must

Know the customer

Provide quality products and services

Pay attention to details

Continuously learn

Surround themselves with good people

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Example: 10 Management Lessons

Its all about

perseverance

Understand the value of

mentorship and teamwork

Stick to your niche

Stay on top of news that

affects your clients

Communication is key Capitalization is crucial

Communicate

unwavering honesty and

integrity

Stay on top of the curve

Take ownership in your

clients success

Never stop marketing

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http://entrepreneur.com/


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Entrepreneurial Strategy

Best strategy for the enterprise will be

determined to some extent by

A viable opportunity, sufficient resources, and

skilled and dedicated entrepreneurialteam

Other conditions in the business environment

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Entry Strategies

Pioneering new

entry

a firms entry into an

industry with a radicalnew product or highly

innovative service that

changes the way

business is conducted.

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Entry Strategies

Imitative new entry

a firms entry into an industry with products or

services that capitalize on proven market

successes and that usually has a strongmarketing orientation.

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Entry Strategies

Adaptive new entry

a firms entry into an industry by offering a

product or service that is somewhat new and

sufficiently different to create value forcustomers by capitalizing on current market

trends.

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Examples of Adaptive New Entrants

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Exhibit 8.6


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Elements of a Blue Ocean Strategy

Create uncontested market space

Make the competition irrelevant

Create and capture new demand Break the value/cost tradeoff

Pursue differentiation and low cost

simultaneously.

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Generic Strategies

Overall cost leadership

Simple organizational structures

More quickly upgrade technology and

integrate feedback from the marketplace

Make timely decisions

that affect cost

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Generic Strategies

Differentiation

Use new technology

Deploy resources in a radical new way

Focus

Niche strategies fit the small business mold

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Combination Strategies

Entrepreneurial firms are often in a strong

position to offer a combination strategy

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

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Competitive Dynamics

Competitive dynamics

Intense rivalry, involving actions and

responses, among similar competitors vying

for the same customers in a marketplace.

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Model of Competitive Dynamics

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Exhibit 8.7


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Why Do Companies Launch New

Competitive Actions?

Improve market position

Capitalize on growing demand

Expand production capacity Provide an innovative new solution

Obtain first mover advantages

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Threat Analysis

Threat analysis

A firms awareness of its closest competitors

and the kinds of competitive actions they

might be planning. Market commonality

Resource similarity

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Question

Aircraft makers Boeing and Airbus have a high

degree of __________ because they make very

similar products and have many buyers in

common.

A. Dynamic capabilities

B. Market commonality

C. First mover advantages

D. Equity funding

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Five Hardball Strategies

Devastate rivals profit sanctuaries

Plagiarize with pride

Deceive the competition

Unleash massive and overwhelming force

Raise competitors costs

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Types of Competitive Actions

Strategic actions

Major commitments of

distinctive and specific

resources to strategic

initiatives.

Tactical actions

Refinements or

extensions of strategies

usually involving minor

resource commitments.

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Likelihood of Competitive Reaction

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)

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Choosing Not to React

Forbearance

a firms choice of not

reacting to a rivals

new competitive

action.

Co-opetition

A firms strategy of

both cooperating and

competing with rival

firms.

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