Markus Rabenberger Manfred Steger May 2003 ...
Transcript of Markus Rabenberger Manfred Steger May 2003 ...
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Definition
Entrepreneurial Strategies:
Practises and policies outside the enterprise, in the market place.
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Entrepreneurial Strategies
1. „Being fustest with the mostest“2. Hitting them where they ain´t
3. Finding and occupying a specialized „ecological niche“
4. Changing economic characteristics of a product, a market, or an industry
Aim at marketdomination
innovation
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Entrepreneurial Strategies
• Strategies have:– prerequisites– fit certain kinds of innovation– require specific behaviour– own limitations– own risks
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Being fustest with the mostest
• Aims from the start at leadership position
• Very risky, greatest gamble, but highly rewarding if it succeeds
Examples:– Hoffmann-LaRoche– Du Pont
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Examples: Being fustestwith the mostest
Hoffmann-LaRoche:• Mid-1920s, newly discovered vitamins• Acquired vitamin patents – nobody else
wanted them• Hired discoverers• Invested all money it had
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Examples - Being fustest ...
• Du Pont:– After 15 years of research– invention of „nylon“, first truly synthetic fiber
– Massive efforts, huge plants, mass advertisement...
– Created the „plastic“ industry.
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Being fustest ...
• Real Innovation (create something truly new, different)
• One clear-cut goal, all efforts focus on it
• Difficult to adjust or correct strategy• Requires thought and careful analysis
(Du Pont, 15 years of research ...)
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Being fustest with the mostest
• Hit right or miss altogether
• Research budget higher after innovation• continuing effort to retain leadership pos. • systematically cut prices of own product
– (e.g Intel)
• Only for major innovations
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Creative Imitation
• Exploit success of others• Wait until new market has been established• Original product lacks something
perfect and position existing productCustomer viewpoint• Satisfy demand that is not met by original
product
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Creative Imitation
• Aims at leadership position, or dominance • Risks:
– splinter efforts– Misread trend (e.g. IBM) – risk of being too
clever• Best in high-tech areas:
– too technology and product focused
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Entrepreneurial Judo
• Aims at leadership and dominance• Least risky, most likely to succeed
• Product designed specific to market segment that is not properly defended by leader
• Some degree of innovation
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Entrepreneurial Judo
• Typical: bad habits that, even if they lead to loss of market share, or leadership...
• are not admitted, instead false excuses
• Make use of the „Five bad habits“ that enable newcomers to use entrepreneurial judo
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Five Bad Habits
1. „NIH“ (Not Invented Here): e.g. „transistor“, pride and arrogance
2. To „cream“ a market:e.g. Xerox: copying machines
3. Belief in „quality“: != supplier puts in, but customer gets out
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Five Bad Habits (cont.)
4. Illusion of „premium“ price:Higher profit, but opens door to competitors
5. Maximize rather than optimize:e.g. XeroxOne product for every user (SOHO, enterprise
user,...)
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Entrepreneurial Judo
• Judo Examples:– Ad5th Bad Habit. Xerox vs. Japanese:
• Machines to specific groups of users• Each product designed to serve optimally a specific
market segment :
– Ad1: America vs. Sonytransistor
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Entrepreneurial Judo
• Judo:– 1st: find a beachhead, that is
not defended properly
– 2nd: establish beachhead(„Hit them where they ain´t“)
– 3rd: move to rest of „beach“,finally take whole „island“
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Entrepreneurial Strategies
3. Finding and occupying a specialized „ecological niche“
4. Changing economic characteristics of a product, a market, or an industry
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Entrepreneurial Strategies
• The Toll-Gate Strategy• The Specialty Skill Strategy• The Specialty Market Strategy• Creating Customer Utility• Pricing• Creating Customer‘s Reality• Delivering Value to the Customer
introduceaninnovation
strategyis theinnovation
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Entrepreneurial Strategies
Finding and occupying a specialized „ecological niche“
• The Toll-Gate Strategy• The Specialty Skill Strategy• The Specialty Market Strategy
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The Toll-Gate Strategy
• Limited size of customers who want to buy the product
• Limited market size• Product has to be essential to a process
• e.g.:• Alcon Company: enzyme for senile
cataracts
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Entrepreneurial Strategies
Finding and occupying a specialized „ecological niche“
• The Toll-Gate Strategy• The Specialty Skill Strategy• The Specialty Market Strategy
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The Specialty Skill Strategy
• build around a product or market
• e.g.:• Baedeker: traveling guidebooks
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Entrepreneurial Strategies
Finding and occupying a specialized „ecological niche“
• The Toll-Gate Strategy• The Specialty Skill Strategy• The Specialty Market Strategy
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The Specialty Market Strategy
• build around specialized knowledge of a market
• e.g.:• England, Denmark: baking ovens for
cookies and crackers
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Entrepreneurial Strategies
Changing economic characteristics of a product, a market, or an industry
• Creating Customer Utility• Pricing• Creating Customer‘s Reality• Delivering Value to the Customer
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Creating Customer Utility
• what is the true „utility“ to the customer?
• e.g.:• Lenox China Company: bridal register
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Entrepreneurial Strategies
Changing economic characteristics of a product, a market, or an industry
• Creating Customer Utility• Pricing• Creating Customer‘s Reality• Delivering Value to the Customer
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Pricing
• the customer wants to pay for what he buys
• e.g.:• Gillette: razor blades• Xerox: copy machine
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Entrepreneurial Strategies
Changing economic characteristics of a product, a market, or an industry
• Creating Customer Utility• Pricing• Creating Customer‘s Reality• Delivering Value to the Customer
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Creating Customer‘s Reality
• the customer’s social and economic reality
• e.g.:• Cyrus McCormick: harvesting machine
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Entrepreneurial Strategies
Changing economic characteristics of a product, a market, or an industry
• Creating Customer Utility• Pricing• Creating Customer‘s Reality• Delivering Value to the Customer