Entrepreneurship & Intrapreneurship

Entrepreneurship  The process of uncovering and developing an opportunity to create value through innovation and seizing that opportunity without regard to either resources (human and capital) or the location of the entrepreneur— in a new or existing company (Churchill, 1992: 586).

Entrepreneurship Characteristics  Commercial leanings  Lack of structure/self-control  Visionary tendencies  Risk-taking/appetite for uncertainty  Persistence  Doer/high initiative  Charisma and extroversion

Entrepreneurship Characteristics  High-energy level  Strong self-image  Team building skills/uses contacts and connections  Views failure as learning  Commitment and fun

Entrepreneurs vs Managers EntrepreneursManagers Rewards Doing what they like. Independent Corporate rewards. Promotion, staff, office, money Activity Direct involvement Delegation Risk Moderate risk taker Avoids risk Status Not concerned about status symbols Represents power and position Relationshi ps Deal-making and reciprocity Relies upon the hierarchy Time orientation Time orientation years. Short term Decisions Follows dreams with decisions Follows directives

Intrapreneurship Characteristics  Understands the environment.  Visionary and flexible.  Creates management options.  Encourages teamwork.  Encourages open discussion.  Builds a coalition of supporters.  Persists.

Intrapreneurship Environment  New ideas encouraged  Trial and error encouraged. Failure ok!  Resources available and accessible  Long time horizon  Appropriate reward system  Sponsors and champions available  Support of top management

“It is the customer who, in the end, determines how many people are employed and what sort of wages companies can afford.” Lord Robens

Strategy in High Technology Industries

High Technology Industries  Rapidly changing scientific knowledge underlying attribute for competition  R&D/Sales  Battle over technical standard, format, and dominant design Set by decree, cooperation, public domain, but mostly through consumer choicesSet by decree, cooperation, public domain, but mostly through consumer choices

Benefits for Standards  Compatibility  Reduce consumer uncertainty  Reduce production costs  Increase in complementary products – Network effects – which greatly enhances sustainability Lock outs and switching costsLock outs and switching costs

Wining Format Wars  Ensure complementary products  Killer applications  Razor and blade strategy Cell phones, printers, satellite TV/radio, video gamesCell phones, printers, satellite TV/radio, video games  Cooperative competition  Licensing

Technological Change  If the automobile had developed at the same rate as the microchip, a Roll Royce would:  Cost $2.75  Go 3 Million miles on a gallon of gas

Competitive Dynamics  Competitive action within an industry.  Strategic and tactical action does not occur within a vacuum  What industries have high competitive dynamics?  What sort of actions/tactics are taken?

Drivers of Competitive Dynamics  numerous/equally balanced competitors  slow growth  high fixed/storage costs  lack of differentiation/switching costs  high exit barriers  Etc… Rivalry Competitive Dynamics

Types of Competitive Responses  First Movers - initial competitive action  advantages and disadvantages  Fast Followers or Capable Competitors- respond quickly to first movers  Late Entrants - day late and a dollar short