L5 Entrepreneurial Strategy Flashcards
Cost Leadership vs. Focused Cost Leadership
Focused cost leadership is that you have a niche customer segment. This is a cost sensitive consumer from a specific segment.
Cost leadership is more generic.
–> same with focused differentiation like Rolex (narrow customer segment; price insensitive customers)
Blue Ocean strategy
- some kind of differentiation + cost leadership in a region with no competition yet
- -> value innovation is created for customer and retain it (last for 10 to 15 years)
The innovation process
Idea, Invention, Innovation, Imitation
Invention
something new but has no value yet for the market
innovation
is a marketable product. It is commercializable and is valuable for the customer
Schumpeterian approach
Opportunity creation
- entrepreneur is an innovator. (creative destruction)
Kirznerian approach
Opportunity discovery
Entrepreneur is everyone who just sports an information in a different way
- entrepreneur is altert
- arbitrageur
Definition of Entrepreneurship
A process of creating value by bringing together a unique combination of resources to exploit an opportunity
Most important entrepreneurial cycle
Build measure learn
Shakeout phase
weak companies get filtered out as customers become more demanding
Product vs. Process innovation
- product innovation in introduction and growth stage
- process innovation takes over in the shakeout phase and persists throughout the maturity stage until the decline stage
- -> move towards cost leadership
Incremental Innovation
- existing product and we just add some new features
Disruptive Innovation
New tech existing market
- iPod
Architectural Innovation
same tech new market RFID tag (military tech now in the supermarket)
Radical Innovation
New tech new market
- first car
