1. Global Innovation Management
Toolbox Workout #6

2. GOAL Define an entry strategy
METHOD
Building up a vision, business plan, milestones and identifying your customers and combatants

3. Setup for your task Pick a specific consumer product:
Choose a product where you have a thorough knowledge of the market and competitors
This is likely to be something that would be involved in a sport, hobby, job or other personal interest
Quickly think through:
Why customers buy this product (be honest)
How customers buy this product (i.e., the consumption chain)
Complementary products required to market this product
Competences your firm needs to compete

4. Setup for your task (2)
Assume your company is going to produce its own brand of the product you have chosen
Formulate an entrance strategy which …
Anticipates competitive behavior and response
Plans to learn when uncertainty is high
Make sure your strategy assesses your project as it unfolds rather than meeting objectives set in advance

5. Don’t forget…
You can’t be sure that your competitors will react as you expect
You can’t be sure that technology, markets, etc. will pan out as you hope (or promise)
You don’t want to be responsible for meeting ‘the numbers’ where you have extreme uncertainty

6. Your 1st task: State your vision
The first step in creating an entrance strategy is stating your vision
Your vision is your assessment of what the competitive future will look like – ie:
What will this market look like in 6 months, 1 year, 5 years, 10 years?
What will this product look like in 6 months, 1 year, 5 years, 10 years?

7. Your 2nd task: Describe the business model
Your business model should
Tell the story of how this product becomes a profitable business
Set target revenue and cost numbers for 6 months, 1 year, 5 years and 10 years
State how your business / product is different from everyone else’s

8. Your 3rd task List your major assumptions
In any highly uncertain venture, you make considerable numbers of assumptions:
List what assumptions you will make about your market
Explain how you will test your assumptions
Your business plan should be organized around converting the maximum number of assumptions to knowledge at minimum cost

9. Your 4th task: Specify your major milestones
Definition of a milestone
Milestones are points in time at which products are delivered and key assumptions are tested
Usually these are events, e.g. complete design
They should be sequenced to minimize cash burn and corporate expectations while you are learning
No milestone should occur without triggering a test of assumptions
Task
Specify your milestones (ie deliverables) in 6 months, 1 year, 5 years and 10 years

10. Hint
Remember that sustainability is industry-specific: different industries display different rates of change in the market
Past is indicator of Future
Future is Volatile

11. Your 5th task: Choose your first three customers
Specify your first three customers – your lead-steer customers. They should be:
Opinion leaders in their industries
Highly regarded by peers
Customers with blogs, reviews or other interactive site feedback
These will help you to test your assumptions about attribute maps and consumption chains
Risk low
Risk high
Benefit low
2nd priority
(make risk of not buying higher than of buying)
Forget it!
(postpone until value or risk
Benefit high
1st priority
(easy sell)
3rd priority
(‘if it doesn’t work, send me the bill’)

12. Your 6th task: Identify your combatants
Identify your combatants (or sleeping dogs, bystanders and skirmishers) by name
State why you categorize them as such
(Usually this will be because of their market power, the coreness of the product to their capabilities, and their interest in this market)
Capacity to produce is high
Capacity to produce is low
Commitment to enter market is low
Sleeping dogs
(track them)
Bystanders
(monitor)
Commitment to enter market is high
Combatants
(Your main focus)
Skirmishers
(selective in their responses due to resource limits; monitor)

13. Your 7th task Choose your entry tactics
Choose one (only) of the tactics from the following list (more detailed information on each is given on the next slide):
Offensive
Defensive
Deception
Explain why this is the best tactic for you and your product to enter the market

14. Quick revision session: Entry tactics
Offensive tactics
Rapid dominance
Planned attack / frontal assault
Flanking maneuver
Pincer movement
Double envelopment
Attrition warfare
Interdiction / control of lines of communication and supply
Preemptive attack
Raiding
Divide and conquer
Guerrilla warfare
Defensive tactics
Mutual support
Scorched earth policy
Booby traps
Center peel
Trench warfare
Hedgehog defense
Deception tactics
Stealth and camouflage
Disinformation
Feint
Force multiplication

15. Hints
Avoid debilitating competitive interaction by using speed, skill and surprise
Use your imagination, innovation and creativity to outmaneuver your competitors, rather than your scarce resources
Assets should be bought only as a last resort
Fixed commitments should be kept variable by paying per use, or by subcontracting

16. Presentation
Prepare a 5- to 10-minute presentation of your conclusions on tasks 1 to 7.
Describe your product, its current competitors, its history and its future on 1 slide
Present a maximum of 1-2 handwritten slides per task
For the sake of time, do not include anything else