Week 2 - Strategic Entrepreneurship Flashcards
What are the Axis Labels and 5 Strategies of BCG’s ‘Strategy Palette’? and explain the 5 Strategies with an example
X Axis = Malleability
Y Axis = Unpredictability
Z Axis (3D) = Harshness.
Classical = I can predict it, but I can’t change it (Be Big - e.g. ).
Adaptive = I can’t predict it, and I can’t change it (Be fast - e.g. Zara).
Visionary = I can predict it, and I can change it (Be First - e.g. Apple at the start of their existence).
Shaping = I can’t predict it, but I can change (Be the Orchestrator = e.g. Apple now).
Renewal = My resources are severely constrained (Be Viable = e.g.).
What are the 2 steps of Strategy Renewal?
- Operational turnaround (cost cutting, reallocation of internal resources, etc.).
- Picking a new strategic approach for innovation and growth.
What was Steve Jobs’ turnaround strategy for Apple and how did it align with the 2 steps of Strategic Renewal?
- Shrunk Apple to a scale which is suitable for a niche market (cut all but one desktop model, cut all portable and handheld models to just one laptop, cut distributors and 5 of the 6 national retailers).
- Cut down too many price points and too much mark-up.
- Asked Microsoft to invest $150m in order for Apple to drop lawsuits.
Fits the Strategic Renewal Steps by costs cutting, but not so much the new innovation (this is because Apple had the innovation and needed better strategic management to make it successful).
2 Definitions of Strategic Entrepreneurship + reference
Strategic Entrepreneurship - Involves taking entrepreneurial actions using a strategic perspective.
- (Hitt, Ireland, and Hoskisson, 2017).
Definitions of Entrepreneurship + Corporate Entrepreneurship + reference.
Entrepreneurship = The process by which individuals, or the firm itself,
identify and pursue entrepreneurial opportunities without being
immediately constrained by the resources they currently control.
Corporate Entrepreneurship = The use or application of
entrepreneurship within an established firm.
(Hitt, Ireland, and Hoskisson 2017).
What are the 4 forms of Strategic Entrepreneurship + Definition by Covin and Miles (1999)?
Strategic Entrepreneurship: “The presence of INNOVATION
plus the presence of the objective of rejuvenating or redefining
organizations, markets, or industries in order to create or sustain
competitive superiority.
How do Kim and Mauborgne (1997) suggest a firm can carry out ‘Domain Redefinition’?
Kim and Maugborne (1997) suggest that a Blue Ocean Strategy can redefine the product market (Domain Redefinition).
Explain the key differences between Red Ocean and Blue Ocean Strategies + redefinition.
Red Ocean Strategy:
- Compete in existing market space and exploit existing demand.
- Beat the competition.
- Make the value-cost trade-off.
- Align the whole system of a firm’s activities with its strategic choice of differentiation OR low cost.
Blue Ocean Strategy:
- Create uncontested market space + create and capture new demand.
- Make the comp. irrelevant.
- Break the value-cost trade-off.
- Align the whole system of a firm’s activities with its strategic choice of differentiation AND low cost.
Explain the 4 Action Framework.
4 Factors to create ‘A New Value Curve’.
- Eliminate (Which factors that the industry takes for granted should be eliminated?)
- Reduce (Which factors should be reduced well below the industry’s standard?)
- Raise (Which factors should be raised well above the industry’s standard?)
- Create (Which factors should be created that the industry has never offered?).
What is a good example of a ‘Value Innovation’ by a firm?
Cirque du Soleil can charge higher prices than other circuses as they:
ELIMINATE - star performers, multiple show arenas, aisle concessions, animal shows.
REDUCE - Fun and humour, Thrills and danger.
RAISE - Unique Venues.
CREATE - Theme, Artistic music and dance.
IMPORTANT FIGURE: What is the Strategic Entrepreneurship figure + reference?
Box 1. (Entrepreneurial) = Entrepreneurship mindset, Entrepreneurial Orientation, Leadership.
Box 2. (Strategic) = Managing Resources Strategically.
Box 3. (Entrepreneurial) = Apply Creativity and Develop Innovation.
Box 4. (Strategic) = Forming Competitive Advantages.
(Ireland, Hitt, Sirmon 2003).
IMPORTANT FIGURE: What is Box1 of the Strategic Entrepreneurship + reference?
Box 1 (Entrepreneurial):
- Entrepreneurial Mindset (recognising opportunities, alertness, goals).
- Entrepreneurial Orientation (risk-taking, innovativeness, proactiveness).
- Leadership
(Ireland, Hitt, Sirmon 2003).
IMPORTANT FIGURE: What is Box2 of the Strategic Entrepreneurship + reference?
Box2 (Strategic):
- Managing Resources Strategically (financial, human + social capital).
(Ireland, Hitt, Sirmon 2003).
IMPORTANT FIGURE: What is Box3 of the Strategic Entrepreneurship + reference?
Box3 (Entrepreneurial):
- Apply Creativity and Develop Innovation (innovation management).
(Ireland, Hitt, Sirmon 2003).
IMPORTANT FIGURE: What is Box4 of the Strategic Entrepreneurship + reference?
Box4 (Strategic):
- Forming Competitive Advantages.
(Ireland, Hitt, Sirmon 2003).
IMPORTANT FIGURE: What are some of the considerations that should be taken when analysing the Strategic Entrepreneurship model + reference?
Considerations:
- Should the figure be linear (no room for adaptations?).
- Simultaneous (Can different boxed be done simultaneously rather than separate as the figure shows?).
- What if managers do the right things as outlined by the figure but encounter problems (No direction for overcoming problems).
