ENTREPRENEURSHIP
description
Transcript of ENTREPRENEURSHIP
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ENTREPRENEURSHIP
Lecture No: 11
Resource Person:
Malik Jawad SaboorAssistant Professor
Department of Management SciencesCOMSATS Institute of Information Technology
Islamabad.
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Previous Lecture Review
• Entrepreneurs in Action
• VIDEO ON STEVE JOBS – APPLE INC.
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Objectives• Strategic Management
• Competitive Advantage
• Core Competency
• Strategic Management Process
• Vision & Mission Statement
• SWOT Analysis
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A Major Shift . . .. . . From financial capital to intellectual
capital.–Human– Structural–Customer
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Strategic Management• Is crucial to building a successful business. • Involves developing a game plan to guide a
company as it strives to accomplish its mission, goals , and objectives, and to keep it on its desired course.
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Strategic Management and Competitive Advantage
• Developing a strategic plan is crucial to creating a sustainable competitive advantage, the aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition.
• Example: Blockbuster Video
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Key: Core Competencies
• Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors. – They are what a company does best. – Best to rely on a natural advantage (often linked to a
company’s “smallness”). • Example: Netflix
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Key: Core Competencies
Power of Core Competence• Is the Competence hard to copy?
• Is the Competence Durable?
• Is the Competence really Competitively Superior?
• Can the Competence be trumped by Rivals?
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Building a Sustainable Competitive Advantage
Superior value for customers
Sustainable competitive advantage
Capabilities
Core competencies
Skills
Lessons learned
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Strategic Management Process
Step 1. Develop a vision and translate it into a mission statement.Step 2. Assess strengths and weaknesses.Step 3. Scan environment for opportunities and threats.Step 4. Identify key success factors.
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Strategic Management Process
Step 5. Analyze competition. Step 6. Create goals and objectives. Step 7. Formulate strategies. Step 8. Translate plans into actions. Step 9. Establish accurate controls.
(continued)
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Step 1: Develop a Vision and Create a Mission Statement
• Vision – the result of an entrepreneur’s dream of something that does not exist yet and the ability to paint a compelling picture of that dream for everyone to see.
• A clearly defined vision:– Provides direction– Determines decisions– Motivates people
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Step 1: Develop a Vision and Create a Mission Statement
• Addresses question: “What business are we in?”
• The mission is a written expression of how the company will reflect an entrepreneur’s values, beliefs, and vision – more than just “making money.”
• Serves as a “strategic compass.”
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Step 1: Develop a Vision and Create a Mission Statement
• Survey of employees: 89 percent of employees say their companies have a mission statementbut…
• Only 23 percent of workers believe their company’s mission statement has become a way of doing business!
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Step 2: Assess Company Strengths and Weaknesses
• Strengths– Positive internal factors a company can
draw on to accomplish its mission, goals, and objectives.
• Weaknesses– Negative internal factors that inhibit a
company’s ability to accomplish its mission, goals, and objectives.
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Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths• Core competencies in ______.
• A strong financial condition; ample financial resources to grow the business.
• Strong brand name image/company reputation.
• Economy of scale and/or learning and experience curve advantages over rivals.
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Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths• Proprietary technology/superior technological skills/important patents.
• Cost advantages over rivals.
• Product innovation capabilities.
• Proven capabilities in improving production processes.
• Good supply chain management capabilities.
• Good customer service capabilities.
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Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths• Better product quality relative to rivals.
• Wide geographic coverage and distribution capability.
• Alliances/joint ventures with other firms that provide access to valuable Technology, competencies, and/or
attractive geographic markets.
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Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Weaknesses• No clear strategic direction.
• No well-developed or proven core competencies.
• A weak balance sheet; burdened with too much debt.
• Higher overall unit costs relative to key competitors.
• A product/service with features and attributes that are inferior to those of rivals.
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Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Weakness• Behind on product quality, R&D, and/or technological
know-how.
• Lack of management depth.
• Short on financial resources to grow the business and pursue promising initiatives.
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Step 3: Scan for Opportunities and Threats
• Opportunities– Positive external factors the company can exploit
to accomplish its mission, goals, and objectives.• Threats– Negative external factors that inhibit the firm's
ability to accomplish its mission, goals, and objectives.
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Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Opportunities• Utilizing existing company skills or technological know-
how to enter new product lines or new businesses.
• Falling trade barriers in attractive foreign markets.
• Acquiring rival firms or companies with attractive technological expertise or capabilities.
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Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Opportunities• Serving additional customer groups or market
segments.
• Expanding into new geographic markets.
• Expanding the company’s product line to meet a broader range of customer needs.
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Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Threats• Increasing intensity of competition among industry
• Slowdowns in market growth.
• Likely entry of potent new competitors.
• Growing bargaining power of customers or suppliers.
• A shift in buyer needs and tastes away from the industry’s product.
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Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Threats
• Adverse demographic changes that threaten to curtail demand for the industry’s product.
• Vulnerability to unfavorable industry driving forces.
• Restrictive trade policies on the part of foreign governments.
• Costly new regulatory requirements.
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Lecture Review
• Strategic Management
• Competitive Advantage
• Core Competency
• Strategic Management Process
• Vision & Mission Statement
• SWOT AnalysisReference: Essentials of Entrepreneurship & Small Business Management,
Zimmer, Scarborough &Wilson, 5th Edition