Chapter 8 - Entrepreneurial Strategy and Competitive Dynamics

Strategic Entrepreneurship

The actions firms take to create new ventures in markets.

Entrepreneurship

The creation of new value by an existing organization or new venture that involves the assumption of risk.

Three Factors for Entrepreneurial Venture

Entrepreneurial opportunity, the resources to pursue it, and an entrepreneur or team.

Opportunity Recognition

The process of discovering and evaluating changes in the business environment that can be exploited.

Two Phases of Opportunity Recognition

Discovery phase and evaluation phase.

Four Qualities of a Viable Opportunity

Attractive, achievable, durable, and value creating.

Angel Investors

Private individuals who provide equity investments for seed capital during the early stages of a new venture.

Venture Capitalists

Companies organized to place their investors' funds in lucrative business opportunities.

Crowdfunding

Funding a venture by pooling small investments from a large number of investors, often raised on the internet.

Strategic Alliances

Partnerships with other companies that provide a key avenue for growth by entrepreneurial firms.

Entrepreneurial Leadership

Leadership appropriate for new ventures that embodies vision, dedication and drive, and commitment to excellence.

Entrepreneurial Strategy

A strategy that enables a skilled and dedicated entrepreneur to successfully launch a new venture.

Pioneering New Entry

A firm's entry into an industry with a radical new product or highly innovative service that changes the way business is conducted.

Imitative New Entry

A firm's entry into an industry with products or services that capitalize on proven market successes and strong marketing.

Adaptive New Entry

A firm's entry into an industry by offering a product or service that is somewhat new and sufficiently different to create value.

Overall Cost Leadership in New Ventures

Achieving success by holding down costs, making efficient use of resources, or utilizing simple organizational structures.

Differentiation in New Ventures

Offering a differentiated value proposition through innovation, technology, customer service, or distinctive branding.

Focus Strategy in New Ventures

Finding a market niche where a startup can get a foothold, make small advances, and erode the position of existing competitors.

Combination Strategies

Combining the best features of low-cost, differentiation, and focus strategies to achieve something truly distinctive.

Competitive Dynamics

Intense rivalry, involving actions and responses, among similar competitors vying for the same customers in a marketplace.

New Competitive Action

Acts that might provoke competitors to react, such as new market entry, price cutting, and expanding production capacity.

Threat Analysis

A firm's awareness of its closest competitors and the kinds of competitive actions they might be planning.

Market Commonality

The extent to which competitors are vying for the same customers in the same markets.

Resource Similarity

The degree to which rivals draw on the same types of resources to compete.

Strategic Actions

Major commitments of distinctive and specific resources to strategic initiatives, such as entering new markets.

Tactical Actions

Refinements or extensions of strategies usually involving minor resource commitments, such as price cutting.

Market Dependence

Degree of concentration of a firm's business in a particular industry.

Forbearance

A firm's choice of not reacting to a rival's new competitive action.

Co-opetition

A firm's strategy of both cooperating and competing with rival firms.

Small Business Definition

Businesses defined as having 500 employees or fewer, which have created the majority of new jobs in the U.S.