Corporate Strategy and Entrepreneurship. E The contemporary business environment can be...
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- Slide 1
- Corporate Strategy and Entrepreneurship
- Slide 2
- E The contemporary business environment can be characterized in
terms of: increasing risk decreased ability to forecast fluid firm
and industry boundaries new rules of the game new structural forms
that not only allow for change but also help create it.
- Slide 3
- E Strategic Inflection Points An inflection point occurs when
the old strategic picture dissolves and gives way to the new,
allowing the adaptive and proactive business to ascend to new
heights An inflection point occurs when the old strategic picture
dissolves and gives way to the new, allowing the adaptive and
proactive business to ascend to new heights How can organizations
know when the time is right to make changes? How can organizations
know when the time is right to make changes?
- Slide 4
- E Strategic Management In essence, strategic management is the
formulation of long-range plans for the effective management of
external opportunities and threats in light of a companys internal
strengths and weaknesses In essence, strategic management is the
formulation of long-range plans for the effective management of
external opportunities and threats in light of a companys internal
strengths and weaknesses Involves a continuous search for
competitive advantages Involves a continuous search for competitive
advantages
- Slide 5
- E Mintzberg (1987) 5 Ps of Strategy Strategy as a Plana
consciously intended course of action Strategy as a Plana
consciously intended course of action Strategy as a Ploya specific
maneuver to outwit competitors or opponents Strategy as a Ploya
specific maneuver to outwit competitors or opponents Strategy as a
Patterna consistent patterned stream of actions Strategy as a
Patterna consistent patterned stream of actions Strategy as a
Positiona means of locating the organization within a competitive
environment Strategy as a Positiona means of locating the
organization within a competitive environment Strategy as a
Perspectivea cognitive state-of- mind held by organizational
decision-makers Strategy as a Perspectivea cognitive state-of- mind
held by organizational decision-makers
- Slide 6
- E Dominant Logic refers to the way in which managers
conceptualize the business and make critical resource allocation
decisions The dominant logic that is optimal for the firm in todays
environment may well be inappropriate for the environment that will
exist five years hence
- Slide 7
- E One means of creating a dynamic dominant logic is to make
entrepreneurship the basis upon which the organization is
conceptualized and resources are allocated As dominant logic,
entrepreneurship promotes strategic agility, flexibility,
creativity, and continuous innovation throughout the firm
- Slide 8
- E The integration of entrepreneurship with strategy has two
aspects: Entrepreneurial Strategy Entrepreneurial Strategy
Application of creativity and entrepreneurial thinking to the
development of a core strategy for the firm Strategy for
Entrepreneurship Strategy for Entrepreneurship The need to develop
a strategy for the entrepreneurial activities of the firm
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- E Ireland, Covin, and Kuratko (2009) define an entrepreneurial
strategy as a vision-directed, organization-wide reliance on
entrepreneurial behavior that purposefully and continuously
rejuvenates the organization and shapes the scope of its operations
through the recognition and exploitation of entrepreneurial
opportunity.
- Slide 10
- E CV Model 1 BS Observed Configurations of the Corporate
Venturing- Business Strategy Relationship CV Model 2 BSCV Model 3
BS CV Model 4 BS Model 5 CV BS CV = Corporate Venturing BS =
Business Strategy
- Slide 11
- E 1. Where does the firm want to be in the entrepreneurial
grid? 2. To what extent is the entrepreneurial emphasis in the
company that of growing new business and starting new ventures
outside the mainstream of the firm vs. transforming the existing
enterprise and its internal operations into a more entrepreneurial
environment?
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- E 3. In what areas does the firm want to be an innovation
leader vs. an innovation follower vis-a-vis the industry? 4. In
what areas of the firm is management looking for higher vs. lower
levels of entrepreneurial activity?
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- E 5. What is the relative importance over the next three years
of product vs. service vs. process innovation? 6. To what extent is
innovation expected to come from senior management, middle
management, or first-level management?
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- E Management attempts to draw a balance across five metrics: 1.
High risk, high-return projects against lower- risk, lower return
projects 2. Discontinuous or dynamically continuous innovations
against continuous innovations and imitations 3. Projects with
shorter development cycles and payoffs against ones with
longer-term outcomes 4. Products/services intended for markets the
firm currently serves against ones for markets that are new to the
firm 5. Projects utilizing new and emerging technologies against
those relying on technologies with which the firm is familiar
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- E Moderate Innovation Success Probability High Innovation
Success Probability Highest Innovation Success Probability Low
Innovation Success Probability Moderate Innovation Success
Probability High Innovation Success Probability Lowest Innovation
Success Probability Low Innovation Success Probability Moderate
Innovation Success Probability High Medium Low MediumHigh Firms
Knowledge Pertaining to the New Products/Services Targeted Market
Firms Knowledge Pertaining to the New Products/Services Core
Technology
- Slide 16
- E Technology represents both an opportunity and threat for
entrepreneurial activity Technology has shortened product life
cycles, leading to smaller windows of opportunity in which
innovation can occur. This has forced entrepreneurs to have an exit
strategy even as the innovation is in the development stages.
- Slide 17
- E Technology allows firms to achieve sustainable competitive
advantages if management determine: 1. How the firm will use
technology to position its products/services in the marketplace 2.
How the firm will use technology to enhance its internal
processes
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- E Sustaining Technologies maintains a rate of improvement,
giving customers more or better in the attributes, cannot get much
better Speed, quality, size Speed, quality, size Disruptive
Technologies introduces a different sets of attributes than ones
customers historically value Introduction of microwave oven
Introduction of microwave oven Creates new markets or new
applications Creates new markets or new applications
- Slide 19
- E Technology-push employees within the firm (usually
technically qualified engineers or scientists) see a technical
possibility and strive to capitalize on it. These individuals see a
new way in which a technology might be applied. Market-pull
innovations start with the customer and are typically driven by
marketing people. Customers are often the source of the new
idea.
- Slide 20
- E Strategic Positioning Strategic Positioning is concerned with
how the firm wants to be perceived in the marketplace is concerned
with how the firm wants to be perceived in the marketplace
Entrepreneurial strategy is all about positioning. It is a process
of perceiving new positions that attract customers from established
ones or draw new customers into the market Entrepreneurial strategy
is all about positioning. It is a process of perceiving new
positions that attract customers from established ones or draw new
customers into the market Effective strategic positioning is
critical for competitive advantage Effective strategic positioning
is critical for competitive advantage
- Slide 21
- E Strategic Flexibility and Adaptation Strategic flexibility
involves a willingness to rethink continuously and make adjustments
to the firms strategies, action plans, and resource allocations and
to the company structure, culture, and managerial systems Strategic
flexibility involves a willingness to rethink continuously and make
adjustments to the firms strategies, action plans, and resource
allocations and to the company structure, culture, and managerial
systems
- Slide 22
- E The following 5 factors contribute to building strategic
leadership: A unique set of dynamic core competencies A unique set
of dynamic core competencies Creative approaches to human capital
Creative approaches to human capital Effective incorporation of new
and emerging technologies Effective incorporation of new and
emerging technologies Strategic alliances and a global market
presence Strategic alliances and a global market presence Company
structures that are flattened and cultures that stress learning and
accountability for innovation Company structures that are flattened
and cultures that stress learning and accountability for
innovation
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- E Exercise Strategic Leadership Build Dynamic Core Competencies
Focus and Develop Human Capital Contingency workers and outsourcing
Contingency workers and outsourcing Developing employee skills
Developing employee skills Effectively use New Technologies
Manufacturing technologies Manufacturing technologies Information
technologies Information technologies Engage in Valuable Strategies
Exploit global markets Exploit global markets Use cooperative
strategies Use cooperative strategies Develop New Organization
Structures and Culture Horizontal organization Horizontal
organization Learning and innovative culture Learning and
innovative culture Manage as a bundle of assets Manage as a bundle
of assets Strategic Flexibility Competitive Advantage
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- E Strategic Leverage Leveraging refers to doing more with less
Leveraging refers to doing more with less Corporate entrepreneurs
and entrepreneurial companies are brilliant leveragers of resources
Corporate entrepreneurs and entrepreneurial companies are brilliant
leveragers of resources Getting to the future first is more a
function of resourcefulness than resources Getting to the future
first is more a function of resourcefulness than resources
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- E Resource leveraging has a number of dimensions: Stretching
resources much further than others have done in the past Stretching
resources much further than others have done in the past Getting
uses out of resources that others are unable to realize Getting
uses out of resources that others are unable to realize Using other
peoples/firms resources to accomplish the entrepreneurs own purpose
Using other peoples/firms resources to accomplish the entrepreneurs
own purpose
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- E Complementing one resource with another to create higher
combined value Complementing one resource with another to create
higher combined value Using certain resources to obtain other
resources Using certain resources to obtain other resources
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- E Flaw 1: Misunderstanding industry attractiveness Flaw 2: No
real competitive advantage Flaw 3: Pursuing an unsustainable
competitive position Flaw 4: Compromising strategy for growth Flaw
5: Failure to explicitly communicate strategy internally
- Slide 28
- E Developing an entrepreneurial vision Increasing the
perception of opportunity Institutionalizing change Instilling the
desire to be innovative Investing in peoples ideas Sharing risks
and rewards with employees Recognizing the critical importance of
failure