1. Entrepreneural Strategy, generating and exploiting new Entrants
EnTREPRENEURSHIP
Entrepreneural Strategy, generating and exploiting new Entrants

2. Learning Objectives
To understand that the essential act of entrepreneurship involves new entry
To be able to think about how an Entrepreneural strategy can first generate, and then exploit our time, a new entry
To understand how resources are involves in the generation of opportunities
To be ale to access the attractiveness of a new entry opportunity

3. Learning Objectives
To acknowledge that entrepreneurship involves making decisions under conditions of uncertainty
To be able to assess the extent of first movers advantage and weigh them against first moves disadvantage
To understand that risk associated with newness, but there are strategies that the entrepreneur can use to reduce risk.

4. New Entry New product : Established / new market
Established Product : New Market
Creating a new organization

5. Entrepreneural Srtategy
Set of Decisions, actions, and reactions that first generate and then exploit over a time new entry
Three Stages
Generation of a new entry opportunity
Exploitation of a new entry opportunity
Feedback

6. Generation of the new entry opportunity
Resources a source of competitive advantage
A bundle of resources includes
Valuable ( It enables the firm to pursue opportunities neutralize threats and offer products and services that are valued by customers)
Rare ( it should be possessed by few/potential competitors)
Inimitable ( it would be difficult or costly for potential competitors)

7. Creating a Resource Bundle that is valuable, rare and inimitable
Entrepreneural resource its liability to obtain then combine the resources into a bundle that is variable, rare and inimitable,
It can be possible through following steps
Experience of entrepreneur or manager
Collective mind of management and employees
Knowledge of the market
Knowledge of the technology
Innovative

8. Market knowledge
Its about the entrepreneurs information about market and its skills.
Problems of customers
Customers attitudes and behaviors

9. Technological Knowledge
Possession of information, technology, know-how and skills
If the market is limited then entrepreneur must know how to create new markets.
He must know how to exploit the technological advantage over its competitors.

10. Accessing the attractiveness of a new Entry opputunity
Information on a new entry
Prior knowledge and information search
Windows of opportunity
Error of omission
Occurs from the decision not to act on the new entry opportunity.
Error of commission
Occurs from the decision to pursue this new entry opportunity only to find out later that the entrepreneur had over-estimated his ability to create customer demand from imitation by competitors.

11. Entry Strategy for new Entry development
First mover develop a cost advantage
First mover face less completive challenge
First mover can secure important challenge
First mover are better position to satisfy customers
First mover gain expertise through participation

12. Environmental Instability For First Mover(disadvantage)
External Environment
Company
Internal Environment

13. Environmental Instability For First Mover(disadvantage)
An entrepreneur should always strive to create the best possible match between the companies resources with the external environment
Key success factors of an industry help in determining that best fit
First movers have a disadvantage that the key success factors are not known. He has to really on his guess.

14. Emerging industries give the first movers the advantage of choosing the way to success including establishing the rules of the industry.

15. Demand uncertainty First mover Delayed entry Little information
potential size of market, expected growth pattern.
Difficult to measure future demand.
Over-estimating demands leads to additional cost
Under-estimating demands lead to under capacity and shortage of supply
Information is available
Future demand is easy to predict
They can avoid additional costs by correctlty estimating demand.

16. First mover
Delayed entry
Growth pattern and change in customer preferences is difficult to predict.
Customers preferences are immature and bound to change
Growth pattern and change in customer preferences is predictable
Customer preferences are matured with time.

17. Technological uncertainty
First mover
Delayed entry
Uncertainty is more
Its not known whether technology will produce the desire result or not
Risk exists in emergence of substitute technology.
Incase of failure ,losses are incurred
Uncertainty is minimal
Results are known
Risks are minimized by using the most optimal technology which is known to work
Additional losses are not incurred

18. Adaptation First mover Delayed entry Difficult to adapt to new changes
Entrepreneurs attributes of persistence and determination stops him from detecting and implementing the change
Easy to adapt to changes.

19. Custmomer uncertainity first mover (dis)advabtage
New products-new markets, customers are uncertain
Uncertain about use of product that whether it will satisfy or not
Customers are uncertainty averse
Customers are uncertain about whether it will perform better than the existing one
Entrepreneur should reduce customer uncertainty

20. Remedy Offer informational advertising Comparison marketing
Tough to offer informational advertising for complex product
Customers are aware of product usage but still reluctant to buy e.g. software package
Entrepreneur should give demos and presentations

21. Lead time and first (dis)advantage
Lead time-the time during which the entrepreneurs prepares for increase competition
Entrepreneur can use marketing efforts to position image

22. Lead time can be increased
Building customer loyalties
Building switch costs
Protecting product uniqueness
Securing access to important source of supply and distribution

23. Risk reduction Strategies for new entry expoitations
Involves considerable risks.
May be due to competitors technology or market demand
Strategies can be used to reduce risk.
Two strategies are used
Market scope
imitation

24. Market scope strategy
Scope- is a choice about which consumers group to serve and how to serve them
It ranges from narrow to broad
Narrow scope Strategy
Offers a small product ranged to a small number of customer groups in order satisfy a particular need
Reduces the risks for failing
Focuses for customized products
Reduces competition

25. By focusing on specific groups of customers the entrepreneur can build up specialized expertise that provide competitive edge
The high end of market typically represent a highly profitable niche.
Broad Scope Strategy
Portfolio approach
Gain understanding about market and products
Unsuccessful products can be dropped
It creates competition
Reduces risks.

26. Imitation strategy Copying the practice of other firms Benefits
To minimize the risks
To improve performance at the first appearance in consistent with argument
It is necessary to be successful in an industry
It quickly acquires skills rather than start from scratch
Imitation also provides organizational legitimacy
If the entrepreneurs acts like a well established firm its is likely to be perceived by customers as well established.
Imitation is a means of gaining status and prestige e.g. consultation firm( location , leather chairs, suits)

27. Types of imitation strategies
Franchising
Franchisee acquires the use of a proven formula for new entry for the franchiser. E.g. McDonalds. ( intellectual property)
Me to strategy
Copying products that already exists and attempting to build an advantage through minor variation. For example Ice cream

28. Managing Newness Negative impact
Faces cost time training employees and to enhance the skills
Overlaping and gaps in responsibilty often cause conflicts
Communication gap-Formal and Informal
(new ventures there will be formal communication due to newness)
Positive Impact
Pay special attention on employees training and social needs.
Manage good systems and routines, and the new employee are determined.