Entrepreneurship

Entrepreneurial Strategy

 1. Market Research and Validation

• Identify Market Needs: Conduct thorough market research to understand
customer needs, preferences, and pain points. Use surveys, interviews, and
industry reports to gather data.
• Validate Your Idea: Test your product or service concept through prototypes,
pilot programs, or minimum viable products (MVPs). Gather feedback and refine
your offering based on real-world data.
 2. Value Proposition Development
• Define Unique Value: Clearly articulate what sets your product or service apart
from competitors. Focus on unique features, benefits, and the value you provide to
customers.
• Customer Segmentation: Identify and target specific customer segments that
are most likely to benefit from your offering. Tailor your value proposition to
address their specific needs.
 Entrepreneurial Strategy

 3. Business Model Design

• Revenue Streams: Determine how your business will make money. Common
models include direct sales, subscription services, freemium models, and affiliate
marketing.
• Cost Structure: Understand and manage your costs, including fixed and variable
expenses. This will help in pricing strategies and financial planning.
 4. Strategic Planning
• Set Clear Goals: Define short-term and long-term business goals. Use SMART
criteria (Specific, Measurable, Achievable, Relevant, Time-bound) for setting
objectives.
• Create a Business Plan: Develop a comprehensive business plan outlining your
vision, mission, market analysis, marketing strategy, financial projections, and
operational plan.
 Entrepreneurial Strategy

 5. Marketing and Sales Strategies

• Branding: Build a strong brand identity that resonates with your target audience. This
includes your brand name, logo, messaging, and overall image.
• Digital Marketing: Leverage digital channels such as social media, content marketing,
email marketing, and search engine optimization (SEO) to reach and engage customers.
• Sales Channels: Identify and develop appropriate sales channels, whether online, retail,
or direct sales. Optimize your sales process to convert leads into customers.
 6. Operational Efficiency
• Process Optimization: Streamline business processes to improve efficiency and reduce
costs. Implement best practices in operations, logistics, and supply chain management.
• Technology Integration: Utilize technology to automate tasks, improve communication,
and enhance productivity. Invest in tools and systems that support your business
operations.
 Entrepreneurial Strategy

 7. Financial Management
• Funding and Investment: Explore various funding options such as bootstrapping,
venture capital, angel investors, or crowdfunding. Choose the right mix based on
your business needs and growth stage.
• Financial Planning: Create detailed financial forecasts and budgets. Monitor cash
flow, manage expenses, and ensure you have sufficient working capital.
 8. Scaling and Growth Strategies
• Market Expansion: Consider expanding into new markets or regions to increase
your customer base. Conduct market analysis to assess opportunities and risks.
• Product Diversification: Develop new products or services to broaden your
offering and reduce reliance on a single revenue stream.
• Strategic Partnerships: Form alliances with other businesses or organizations to
leverage their resources, networks, and expertise.
NEW ENTRY
 A. New entry refers to:
1. Offering a new product to an established or new market.
2. Offering an established product to a new market.
3. Creating a new organization.
B. Newness is both positive and negative.
1. Newness can help differentiate a firm from its competitors.
2. However, newness creates a number of challenges for entrepreneurs.
C. Entrepreneurial strategy represents the set of decisions, actions, and
reactions that
first generate, and then exploit over time, a new entry in a way that
maximizes the
GENERATION OF A NEW ENTRY
OPPORTUNITY
D. The elements of an entrepreneurial strategy are:
1. The generation of a new entry opportunity, the result of a combination of knowl-
edge and other resources into a bundle that will be valuable, rare, and difficult for
others to imitate.
2. The exploitation of a new entry opportunity.
3. A feedback loop.
E. If the entry warrants exploitation, then firm performance depends on
1. The entry strategy; the risk reduction strategy.
2. The way the firm is organized.
3. The competence of the entrepreneur and the management team.
F. Long-run performance is dependent upon the ability to generate and exploit
numer-
ous new entries.
GENERATION OF A NEW ENTRY
OPPORTUNITY
A. Resources as a Source of Competitive Advantage.
1. Resources are the basic building blocks to a firm’s performance.
a. These resources are the inputs into the production process.
b. These can be combined in different ways to achieve superior performance.
2. These resources need to be considered as a bundle rather than just the resources
that make up the bundle.
3. In order for a bundle of resources to be the basis of a firm’s superior performance,
the resources must be valuable, rare, and inimitable.
4. A bundle of resources is:
a. Valuable when it enables the firm to pursue opportunities, neutralize threats,
and to offer products and services that are valued by customers.
b. Rare when it is possessed by few, if any, competitors
GENERATION OF A NEW ENTRY
OPPORTUNITY
c. Inimitable when replication of this combination of resources would be
difficulty and/or costly for competitors.
5. The text uses the example of Breeze Technology, Inc., which invented a
technology that could be applied to the ventilation of athletic shoes to
reduce foot temperature.
a. The product was valuable because it provided the means of entering into
a large, lucrative market.
b. This technology also appeared to be rare and inimitable.
c. The process was also novel and obvious.
d. A patent protects the owner of the technology from people imitating the
technology.
ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
 1. Market Analysis
• Target Market Identification: Define your target market segments based on
demographics, psychographics, and geographic factors. Understand their needs,
preferences, and purchasing behavior.
• Competitive Landscape: Analyze existing competitors. Identify their strengths,
weaknesses, market share, and strategies. This helps you pinpoint opportunities and
threats in the market.
• Market Size and Growth Potential: Evaluate the size of the market and its growth
potential. Consider factors such as market demand, economic conditions, and trends.
 2. Value Proposition
• Unique Selling Proposition (USP): Clearly define what makes your product or
service unique compared to competitors. This could be based on innovation, quality,
pricing, or customer service.
• Benefits to Customers: Articulate how your offering solves a problem or adds
value for your target market. Ensure that your value proposition aligns with market
needs
ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
 3. Entry Mode Selection
• Direct Entry: Launch your product or service directly into the market. This could be through physical
stores, online platforms, or direct sales teams.
• Partnerships and Alliances: Form strategic partnerships or joint ventures with local firms to leverage
their market knowledge, distribution networks, or customer base.
• Franchising or Licensing: Allow other businesses to use your brand and business model in exchange
for fees or royalties. This can facilitate rapid market penetration with lower risk.
• Acquisitions: Acquire an existing company in the target market to quickly gain access to established
operations, customers, and market presence.
 4. Market Entry Tactics
• Pricing Strategy: Decide on an appropriate pricing strategy based on market conditions, competitor
pricing, and perceived value. Consider options like penetration pricing to quickly gain market share or
premium pricing for a high-end offering.
• Promotion Strategy: Develop a comprehensive marketing and communication plan. Utilize digital
marketing, social media, PR, events, and traditional advertising to build awareness and attract customers.
• Distribution Channels: Select distribution channels that align with your target market’s purchasing
behavior. This could include online platforms, retail stores, wholesalers, or direct sales.
ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
 5. Operational Planning
• Resource Allocation: Ensure you have the necessary resources in
terms of finance, personnel, and technology to support your entry
strategy.
• Supply Chain Management: Set up a reliable supply chain to ensure
timely production and delivery of your product or service.
• Legal and Regulatory Compliance: Understand and comply with local
regulations, standards, and legal requirements in the target market.
 6. Risk Management
• Identify Risks: Assess potential risks related to market entry, such as
financial risks, operational risks, or competitive pressures.
• Mitigation Strategies: Develop strategies to mitigate identified risks.
This could include contingency planning, insurance, or diversifying your
market presence.
ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
 7. Performance Monitoring and Adaptation
• Key Performance Indicators (KPIs): Define and track KPIs to
measure the success of your entry strategy. This could include sales
growth, market share, customer acquisition cost, and customer
satisfaction.
• Feedback and Adaptation: Continuously gather feedback from
customers and stakeholders. Be prepared to adapt your strategy based
on market response and changing conditions.
Example Scenario: New Health Tech Startup

1. Market Analysis: Target growing demand for telemedicine services.

Analyze existing telemedicine providers and their service gaps.
2. Value Proposition: Offer a unique platform with enhanced features such
as AI-driven diagnostics and personalized treatment plans.
3. Entry Mode: Launch directly through an online platform with a freemium
model to attract initial users, then upsell premium features.
4. Tactics: Utilize digital marketing, influencer partnerships, and strategic PR
campaigns. Set competitive pricing with a freemium model.
5. Operations: Build a robust tech infrastructure, secure partnerships with
healthcare professionals, and ensure compliance with health regulations.
6. Risk Management: Address potential risks related to data security and
regulatory changes. Develop a comprehensive cybersecurity strategy.
7. Performance Monitoring: Track user engagement, conversion rates, and
customer feedback. Adapt features and marketing tactics based on data
insig
Why do entrepreneur fail: the four
entrepreneurial pitfall
 1. Not Understanding the Customer’s Needs
 Drucker's Insight:
• Drucker famously stated, “The purpose of business is to create and keep a customer.” This highlights
the fundamental role of customer understanding in business success.
 In Detail:
• Market Research: Entrepreneurs should invest time and resources in researching their target
market. This includes understanding customer pain points, preferences, and buying behavior. Effective
market research helps in designing products or services that meet actual needs rather than
assumptions.
• Customer Feedback: Regularly soliciting and analyzing customer feedback allows businesses to
adapt and improve. This can involve surveys, focus groups, or direct customer interactions.
• Customer Segmentation: Recognizing that different segments of the market have different needs
enables entrepreneurs to tailor their offerings and marketing strategies more effectively.
 Impact of Ignoring Customer Needs:
• Products or services that do not address the real needs or desires of customers are unlikely to
succeed. This misalignment can lead to low sales, high customer churn, and ultimately, business
failure
Why do entrepreneur fail: the four
entrepreneurial pitfall
 Lack of Clear Objectives and Strategy
 Drucker's Insight:
• Drucker emphasized the importance of setting clear objectives and developing a coherent
strategy to achieve them. He argued that effective management requires a clear vision and
direction.
 In Detail:
• Goal Setting: Entrepreneurs need to set specific, measurable, achievable, relevant, and time-
bound (SMART) goals. These objectives guide the company’s efforts and help in evaluating
performance.
• Strategic Planning: Developing a strategic plan involves identifying long-term goals and the
steps needed to achieve them. This includes market positioning, competitive advantage, and
resource allocation.
• Performance Metrics: Establishing metrics to track progress towards objectives ensures that the
business stays on course and can make adjustments as needed.
 Impact of Poor Objectives and Strategy:
• Without clear goals and a strategic plan, businesses may lack direction, leading to inefficient use
of resources and missed opportunities. This can result in stagnation or failure to grow
 Why do entrepreneur fail: the four
entrepreneurial pitfall
 Inadequate Planning and Management
 Drucker's Insight:
• Drucker’s work underscored the importance of effective management and rigorous planning. He
believed that management is a critical factor in business success.
 In Detail:
• Operational Planning: Detailed planning of day-to-day operations helps ensure that resources
are used efficiently and that processes run smoothly. This includes budgeting, scheduling, and
resource management.
• Leadership and Team Management: Effective leadership involves guiding and motivating a
team, delegating tasks appropriately, and building a strong organizational culture. Drucker
emphasized the role of managers in fostering a productive and positive work environment.
• Risk Management: Identifying potential risks and developing strategies to mitigate them is
essential for long-term stability. This includes financial risks, operational risks, and market risks.
 Impact of Poor Planning and Management:
• Ineffective management and lack of planning can lead to operational inefficiencies, financial
problems, and low employee morale. This can undermine business performance and lead to failure.
Why do entrepreneur fail: the four
entrepreneurial pitfall
 Failure to Innovate
 Drucker's Insight:
• Drucker viewed innovation as a key driver of business success. He noted that “the best way to predict
the future is to create it,” emphasizing the need for continuous innovation to stay relevant.
 In Detail:
• Product and Service Innovation: Constantly improving and updating products or services helps
meet changing customer needs and stay ahead of competitors. This can involve technological
advancements, new features, or improved processes.
• Business Model Innovation: Exploring new business models or revenue streams can provide
additional growth opportunities. This could include changes in pricing strategies, distribution
channels, or partnerships.
• Organizational Innovation: Creating an environment that encourages creativity and
experimentation within the organization can lead to innovative solutions and processes.
 Impact of Failing to Innovate:
• Businesses that do not innovate may become outdated and unable to compete effectively. Market
changes, technological advancements, and evolving customer preferences can render stagnant
businesses irrelevant.