Wk4:Ch2: Entrepreneurial Strategy

Question 1

What is the difference between administrative and entrepreneurial approaches to strategy?

Answer 1

• Entrepreneurial Organisation: All about exploiting opportunities
• Look for new opportunities, pursuing and experimenting with them and moving on to others if they are not profitable
• Tries to grow rapidly
• Rewards individuals based on creating value
• Administrative organisation
• Focuses on controlling resources efficiently
• Rewarded for managing teams/resources effectively
• Typically very hierarchical, safe, slow, steady
• No incentives to look for new opportunities

Question 2

What are the 3 frameworks to diagnose an organisation?

Answer 2

• Core competencies
• Dynamic capabilities
• Blue ocean strategy

Question 3

What are core competencies and how do you test for them?

Answer 3

• Possessed by companies that constantly find ways to create and maintain competitive advantages
• A complex bundle of company skills and technologies that are interlinked
• Spread throughout the organisation
• Built-up slowly over time and difficult to copy
• Never dependent on just one individual or technology
• 3 ways to test for core competencies:
• Deliver customer value (customers see product/service as a fundamental benefit)
• Competitive differentiation (Company delivers superior performance/quality in their product)
• Extendibility (how well positioned are their core competencies to cover future possible scenarios and market trends)

Question 4

What are dynamic capabilities?

Answer 4

• Organisation’s ability to integrate, build and reconfigure itself
• address and shape rapidly changing business environments
• Dynamic capabilities don’t require long period of time to accurately measure

Question 5

How does a firm develop it’s dynamic capabilties?

Answer 5

• Sensing (Assessment of macro/market environment, opportunties & consumer needs)
• Seizing (Reacting to market needs, building innovative business models, getting access to capital & resources)
• Transforming (Renew company processes, maintain relevance to customers, constantly streamline, improve & alter business practices)

Question 6

Paradigm change through ERRC framework?

Answer 6

• Eliminate (What can be removed from business, unnecessary operations/products)
• Reduce (What can be reduced, e.g: expenses)
• Raise (What can be improved?)
• Create (Can new things can be created/done)