Chapter 8 & 12 Lecture Notes Flashcards

Flashcards on Entrepreneurial Strategy, Competitive Dynamics, and Managing Innovation.

Innovation

A change to a product or process.

Innovation

New combinations of ideas and information that bring about positive change, involving the transformation of organizational processes and creation of new & commercially viable products & services.

Product Innovation

Creates new product designs and is common during early stages of an industry’s life cycle; associated with a differentiation strategy.

Process Innovation

Improves the efficiency of an organizational process, materials utilization, shortens cycle time, and increases quality; common during later stages of an industry’s lifecycle; associated with overall cost leadership strategies.

Radical Innovation

A major departure from existing practices, usually as a result of technological change; can transform or revolutionize a whole industry.

Incremental Innovation

Enhances existing practices, makes small improvements in products & processes, and can create evolutionary applications of earlier innovations; provides new capabilities.

Disruptive Innovation

Create an entirely new opportunity through the introduction of a new kind of product or service to existing markets, often sacrifices performance along dimensions important to current customers.

Overall Cost Leadership Advantages (New Ventures)

Simpler organizational structure & smaller size and quicker decision making to upgrade technology & integrate marketplace feedback controls costs.

Differentiation Advantages (New Ventures)

Offering a unique value proposition through innovation & superior use of new technology and deploying resources in a radical new way.

Focus Advantages

Using niche strategies that fit the small business model.

Combination Strategies for New Ventures

Combine the best features of low-cost, differentiation, and focused strategies by having a simple structure, creating high-value products & services by being flexible & innovative, and offering highly specialized products or superior customer service to a niche market.

Blue Ocean Strategy

Create uncontested market space, make the competition irrelevant, create and capture new demand, and break the value-cost trade-off.

Entrepreneurship

Value creation and risk; new value can be created in many contexts, including startups, major corporations, family-owned businesses, nonprofit organizations, and established institutions.

Discovery Phase

Becoming aware of a new business concept.

Evaluation Phase

Analyzing the opportunity to determine whether it is viable or feasible to develop further.

Qualities of Viable Opportunities

Attractive, Achievable, Durable, Value-creating.

New Venture Entry Strategies Need To:

Quickly generate cash flow, build credibility, and attract good employees.

Pioneering New Entry

Create new ways to solve old problems and meet customers’ needs in a unique new way.

Imitative New Entry

Capitalize on proven market successes and introduce the same basic product or service in another segment of the market.

Adaptive New Entry

Capitalizes on current market trends and offers a product or service that is somewhat new and sufficiently different, creating new value for customers.