Selecting and executing your Entrance Strategy Entrance Strategies (Chapter 9) Decide on an entry strategy Planning to learn when uncertainty is high Assessing your project as it unfolds Tug of War (Practicum)

WeekTopicReadingsIndustry ProfilePracticum 5-Sep-06What is Innovation? Lecture Notes 1 Chapter 1 How Successful Companies Get Innovative Mad Catz, Inc. Great Innovations (videos) 12-Sep-06Business Needs: Framing the Challenge Lecture Notes 2 Chapter 2 Why Business Models Matter False FacesFalse Faces (perceptual reversals) 19-Sep-06Building Blockbuster Innovations Lecture Notes 3 Chapter 3 3M and Norton Slice and DiceSlice and Dice (Attribute Maps pp ) The Role of the Practicum 26-Sep-06Redifferentiating Products: New Technology or New Uses Lecture Notes 4 Chapter 4Recognizing the Potential of an Innovation Think BubblesThink Bubbles (Quizzing to understand the customers’ experiential context pp ) 3-Oct-06Disruptive Innovation Lecture Notes 5 Chapter 5The Disk Drive IndustryIndustrial Design Competition 10-Oct-06Building Breakthrough Competences Chapter 6Dell Computer (It’s not about the computing) The Idea Box (Dr. Fritz Zwicky’s morphological box) 17-Oct-06Mid-term Exam Venue: Rm4333 Time: 1:30pm - 2:50pm 19-Oct-06Selecting Your Competitive Terrain Chapter 7The Excavator IndustryHall of Fame (forced connection) 24-Oct-06Assembling Your Opportunity Portfolio Chapter 8Motorola’s Iridium Satellite System Cherry Split (fractionation) 31-Oct-06Executing Your Entrance Strategy Chapter 9PETCOTug-of-War (force-field analysis) 7-Nov-06Putting Discovery-Driven Planning to Work Chapter 10 Ideatoons (pattern language) 14-Nov-06Managing Under UncertaintyChapter 11 Innovation the Microsoft Way Future Fruit (rationalizing future uncertainty) 21-Nov-06Entrepreneurial LeadershipChapter 12 Clever Trevor (talk to a stranger) 28-Nov-06 Strategy as DiscoveryChapter 13 Circle of Opportunity (forced connection) 5-Dec-06Course Wrap-up 7-Dec-06Final Exam Venue: Rm4333 Time: 1:30pm - 2:50pm

Innovation = Invention + Commercialization

What do you do now? You’ve:  Identified and screen new innovations  Figured out your target market  Filled your opportunity portfolio  Determined your core competences  Decided where you will invest for the future Now it’s time to get …  Down in the real world. You know. Where the rubber meets the road and the real folks are that make it go.  H. Ross Perot, on Larry King Live

Where does entry strategy fit in?

What is ‘Entrance Strategy’?  Several practical areas in entrepreneurship and innovation reflect the role of the entrance strategy The first step in an entrance strategy is your ‘vision’ – what will the company look like in 10, 15, 20 years Financing (VC’s, Banks, Stock issues) Many aspects of Venture Capital work (business model, hiring decisions, capitalization, etc.) ‘Incubators’  Speculators and Universities love these  Why?`

Adaptive Execution Decide on an entry strategy  Anticipating competitive behavior and response Planning to learn when uncertainty is high  Rather than meeting objectives set in advance  Discovery Driven Planning Assessing your project as it unfolds

Anticipating Competitor Response Objective: Avoid debilitating competitive interaction  By using speed, skill and surprise  Use your imagination, innovation, creativity to outmaneuver your competitors  Rather than your scarce resources

Where are your Customers? Lead-steer customers  Opinion leaders in their industries  Highly regarded by peers  Customers with blogs, review or other sites Use these customers’ enthusiasm to:  Test your assumptions about attribute maps and consumption chains  Use their success with your offering to sell others

Assessing Your first 5 sales This is where you evaluate, learn, modify

No Sales until ‘First 5 Sales’ prioritizing the first few sales Risk Low Risk High Benefit Low 2 nd Priority (make risk of not buying higher than of buying) Forget it! (postpone until value  or risk  Benefit High 1 st Priority (easy sell) 3 rd Priority (‘if it doesn’t work, send me the bill’)

Risk-return trade-off Most customers will buy on a risk-return decision  Small $ value = low risk  Higher risk = demand for higher return (savings)

Customer Risks The risk of the New Learning (experience) curve Opportunity costs Failure or uncertain operation Employee resistance Legal and Environmental Quality & Perception

Learn from each sale You can’t sell 10 until you sell 1  You can’t sell 100 until you sell 10; Etc. Each of the early sales is an opportunity:  To test your attribute map and consumption chain  To learn about your product and customer  To innovate again and again

Tug of War 1. Write the challenge 2. Describe the best-case scenario and the worst-case scenario 3. List the conditions of the situation 4. Find the forces pushing you to the best case and those pulling you toward catastrophe 5. Pit each condition against its opposite on the continuum by specifying its push and pull powers.

Assessing Competitive Response After you’ve assessed your first few buyers … decide how aggressively you want to move

Competitor’s propensity to respond 3 Questions  Is this area important to them?  Have they been increasing their commitment here?  Have they invested heavily in this area? This is where  The Porter framework Is useful

Competitive Responses Here’s where the book lapses into Military jargon Capacity High Capacity Low Commitment Low Sleeping Dogs (track them) Bystanders (monitor) Commitment High Combatants (Your main focus) Skirmishers (selective in their responses due to resource limits; monitor)

Tactics feint (fānt) noun  1.A feigned attack designed to draw defensive action away from an intended target.  2.A deceptive action calculated to divert attention from one's real purpose. See synonyms at artifice.  gam·bit (găm ʹ bĭt) noun  1.Games. An opening in chess in which a minor piece, or pieces, usually a pawn, is offered in exchange for a favorable position.  2.A maneuver, stratagem, or ploy, especially one used at an initial stage.  3.A remark intended to open a conversation. on·slaught (ŏn ʹ slôt´, ôn ʹ -) noun  1.A violent attack.  2.An overwhelming outpouring: an onslaught of third-class mail.

Who will feed Fluffy? PETCO Case on pp

Theory & Practice Our theory provides you an inventory of techniques and concepts required for success  The necessary conditions Practice is more complex, and requires a complete strategy (and even then is not sufficient)

Practice in Competitive Positioning 1. Identify your first few customers and learn from them 2. Develop your strategy 3. Identify each customer arena you intend to pursue 4. Assess Corporate Support 5. Assess Motivation and Capacity of the Competition 6. Map Arena Attractiveness 7. Map Competitive Positions of each player 8. Decide on your firm’s preferred strategy 9. Assess strategy of each competitor 10. Map each competitor's business position against your own

Ralston + Developing positions in seven sub-segments of the pet food business pp. 217 on

The Competitors

Commitments

Categories and Products

Competitive Positions

Ralston vs. Mars (importance)

Ralston vs. Mars (Attractiveness)