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Entrepreneurial Strategy

The document discusses various entrepreneurial strategies including differentiating, having low costs, or focusing on a niche market. It also covers business models, revenue models, costs of goods sold, and operating costs. Additionally, it examines the concept of "first mover advantage" where being the first to market can provide economies of scale, learning curve gains, and control over scarce resources. However, being first requires capturing a large market share quickly and creating customer switching costs as first movers often do not win. Winning strategies are those that are cheaper, better, or faster. The document also outlines entry, growth, and global expansion strategies.

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Yashika Sharma
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50 views

Entrepreneurial Strategy

The document discusses various entrepreneurial strategies including differentiating, having low costs, or focusing on a niche market. It also covers business models, revenue models, costs of goods sold, and operating costs. Additionally, it examines the concept of "first mover advantage" where being the first to market can provide economies of scale, learning curve gains, and control over scarce resources. However, being first requires capturing a large market share quickly and creating customer switching costs as first movers often do not win. Winning strategies are those that are cheaper, better, or faster. The document also outlines entry, growth, and global expansion strategies.

Uploaded by

Yashika Sharma
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Entrepreneurial strategy

HEMBA February 18, 2012

Basic strategy categories are:


Differentiation Low cost Niche

Business model

Revenue model

Cost model

Revenue categories

Cost of Goods Sold

Operating Costs

The First Mover Advantage


Conventional wisdom would have us believe that it is always beneficial to be first first in, first to market, first in class. Examples based on the Jack Welch school of business strategy The advantages accorded to those who are first to market defines the concept of First Mover Advantage (FMA).

The case for FMA supply side


Creates economies of scale (economic benefits that accrue with increasing volume to both period costs and unit costs of production) Creates learning curve gains based on cumulative units of production Provides first-mover with control over important, possibly scarce input factors

The case for FMA demand side


Four types of switching costs 1. Contractual costs (sticky accounts) 2. Initial investment (time & $) 3. Habit formation (learning period, familiarity) 4. Brand strength based on relevance, awareness, esteem

Several key aspects about capturing a first movers advantage


You have to be first (or very early) into the market You need to capture a large percentage of the market quickly You need to create switching costs so the customer will stick with you Very expensive, hard to win First Movers rarely win

Attributes of winning strategies

Cheaper

Better

Faster

Entry Strategy
Benchmark

Devise Initial Market Test

Create a Platform

Growth Strategy

Franchising

Expanding your product mix

Geographic expansion

Means to expand globally


Technology Transfer Technology Licensing Outsourcing Exporting

Pros
- Reduces entry costs - Generates revenue - Conserves resources - Cost-saving - Cheap - Easy - Physical presence - Control of assets - Licenses an operational system - Both an enabling and an enacting mechanism - Established infrastructure - Allow a company to grow and expand quickly

Cons
- Risk of losing the technology - A lost opportunity to extend your own brand

- Additional costs in after-sales support and transportation - Moral hazard - Expensive - Risk of damaging the brand name - Often leads to mergers and acquisitions with foreign companies - Very expensive

Foreign Direct Investment (FDI) Franchising Venture financing Mergers and acquisitions (M&A)

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