Generating & Exploiting New Ideas Chapter 13

New Entry Definition Definition New product to established or new market New product to established or new market Established product to new market Established product to new market New organization New organization

Generating New Entry Opportunity Resources Resources Compound to increase success Compound to increase success Three characteristics Three characteristics Valuable Valuable Rare Rare Inimitable Inimitable

Generating New Entry Opportunity Entrepreneurial Resource Entrepreneurial Resource Knowledge Knowledge Market knowledge Market knowledge Insight into market and customers Insight into market and customers Technological knowledge Technological knowledge Insight into ways to create new knowledge Insight into ways to create new knowledge Advance knowledge or invest in narrow purpose and found to have broader uses Advance knowledge or invest in narrow purpose and found to have broader uses

Assessing the Attractiveness of New Entry Opportunity Information and Knowledge on New Entry Information and Knowledge on New Entry Advantages of knowledge Advantages of knowledge Window of Opportunity Window of Opportunity Closing Closing Comfort Deciding under Uncertainty Comfort Deciding under Uncertainty Error of commission Error of commission Error of omission Error of omission Bottom line Bottom line

Entry Strategy for First Movers Advantages Advantages Cost advantage Cost advantage Less competition Less competition Secure important channels Secure important channels Positioning to meet customer needs Positioning to meet customer needs Gain expertise through participation Gain expertise through participation

Environmental Instability & First Movers Must fit resources with external environment Must fit resources with external environment Key success factors Key success factors How does it relate to first movers? How does it relate to first movers? Emerging industries Emerging industries No rules! No rules!

Environmental Instability & First Movers Demand Uncertainty Demand Uncertainty Forecasting issues (MKT size) Forecasting issues (MKT size) Demand shifts Demand shifts Why is it bad for first movers? Why is it bad for first movers? Technological Uncertainty Technological Uncertainty Capital outlays Capital outlays Leapfrogging technologies Leapfrogging technologies Why is it bad for first movers Why is it bad for first movers Adaptation Adaptation

Customer Uncertainty & First Movers Value concerns Value concerns Uncertainty adverse Uncertainty adverse Entrepreneur must reduce uncertainty Entrepreneur must reduce uncertainty Information advertising Information advertising Comparison advertising Comparison advertising Entering late advantages Entering late advantages

Lead Time & First Movers What is lead time? What is lead time? Why is it important? Why is it important? Barriers to entry Barriers to entry Build customer loyalty Build customer loyalty Build switching costs Build switching costs Protect product uniqueness Protect product uniqueness Secure access to important sources of supply and distribution Secure access to important sources of supply and distribution Competition=Good?! Competition=Good?!

Risk Reduction Strategies Market-Scope Strategy Market-Scope Strategy Narrow Scope Narrow Scope Advantages Advantages Disadvantages Disadvantages Broad scope Broad scope Advantages Advantages Disadvantages Disadvantages Imitation Imitation Franchising Franchising ”Me too” strategy ”Me too” strategy

Managing Newness Assets of newness Assets of newness Flexibility Flexibility Adaptability Adaptability Vs. existing organizations Vs. existing organizations Liabilities of newness Liabilities of newness Costs with new tasks Overlap in jobs Communication