Strategic Entrepreneurship Flashcards
What is Strategic Entrepreneurship (Kim and Mauborgne, 1997)
A strategic approach where companies seek to create a leap in value for both customers and themselves by simultaneously pursuing superior value for buyers and lower costs for the company
What are the 5 strategy’s the Boston consulting group suggest in the strategy palette (CARVS)
Classical: I can predict it, but I can’t change it (Be big)
Adaptive: I can’t predict it, and I can’t change it (be fast)
Visionary: I can predict, and I can change it (be first)
Shaping: I can’t predict, but I can change it (be the orchestrator)
Renewal: my resources are a severely constrained (be viable)
Steps of strategy renewal
- Operational turnaround
- Picking a new strategic approach for innovation and growth
4 forms of strategic entrepreneurship (Colvin and Miles 1999) DOSS
Domain redefinition
Organisational rejuvenation
Sustained regeneration
Strategic renewal
Real world examples - Zara
Zara - relocated their production facilities to North Africa and turkey, to try shorten its supply chain - Zara focus on experimentation and producing in small batches to adapt to unpredictable environments
Real world examples - 23andMe
Changed its initial pricing from $999 to $99
Real world examples - Steve Jobs
Shrunk apple to a scale which was suitable for a niche market, cutting distributors and five of the six national retailers it had, returning to only one desktop model
What is value innovation?
In value innovation, companies seek to simultaneously reduce costs while increasing value for customers. This is achieved by redefining the industry’s boundaries, challenging conventional assumptions, and focusing on factors that the industry has overlooked
Red Ocean vs Blue Ocean needs to be considered
Why is strategic entrepreneurship important
This allows companies to stay ahead in the market (Kim and Mauborgne 1997)
What is the entrepreneurial essence of value innovation (Kim and Mauborgne 1997)
The entrepreneurial essence of value innovation lies in the ability of companies to challenge existing industry assumptions, focusing on what customers truly value, and create a new value proposition that transcends traditional offerings
What does the optimal combination of strategy and entrepreneurship allow for
Allows companies to differentiate themselves in the market, achieve competitive advantage, and sustain high growth over time
Strategic styles (Reeves et al 2012)
Companies operate with different strategic styles based on industry and life cycle
Environments for start-ups may require visionary or shaping strategy’s; while growth and maturity phases may benefit from adaptive or classical styles
Continually matching strategic styles to the companies situation can provide a significant advantage over those who do not adapt
Company ambidextrous strategy (Haanaes et al 2017)
Only 2% of companies are ambidextrous, efficientally balancing nothing strategy and achieving long term success
Reeves et al (2020)
Market leadership is becoming increasingly temporary, strong performance is far less sustainable
Only 17% of companies that significantly outperformed their market managed to continue to do this for 5 years after - they are characterised by finding new sources of competetive advantage I.e. resetting their mental models, adopting new buisness metrics, embracing a multidimensional approach to strategy, and reinventing organisational capabilities
Companies are decaying and increasing rates
Hermes/Evri Case Study
Hermes positions itself well to profit well from pandemic
Gets a takeover from a private equity firm
Has tons of profit
Gets bad publicity for treating parcels badly
Renames itself to evri
