Please enable JavaScript.
Coggle requires JavaScript to display documents.
Generating and Exploiting New Entry Strategies (Risk Reduction Strategies,…
Generating and Exploiting New Entry Strategies
Risk Reduction Strategies
New Entry Exploitation
-Building customer loyalty
-Building switching cost
-Protecting product uniqueness
-Securing access to important sources of supply and distribution
Demand uncertainty
Entrepreneurs that delay to move would learn from the first mover’s steps and mistakes.
Technological uncertainty
Difficulty in assessing whether the technology will perform
Imitation Strategies
Franchising
Acquiring a “proven formula” for new entry from a franchisor
“Me-too” strategy
Copying exist products and attempting to build an advantage through minor variations
Market Scope Strategies
Narrow-scope strategy
Offers small product range to a small number of customers to satisfy a particular need
Focuses on:
-Producing customized products
-Localized business operations
-High level craftsmanship
-High-end of the market
Managing Newness
If all employees are well trained, the whole process will be much efficient and smooth.
If new firms learning new skills and systems, it would be easier than old firm needs to unlearn old system
Arise from:
Costs in learning new tasks
Conflict arising from overlap or gaps in responsibilities
Informal structures of communication
New Entry
Offering a new or established product in an established or new market
Creating a new organization
Entrepreneurial strategy
-It represents a set of decisions, actions, and reactions that first generate, and exploit, a new entry over time
Generation of a New Entry Opportunity
Resources
Valuable
– when it enables the firm to pursue opportunities, neutralized threats, and offer products that are valued by customers
.
Rare
– when it is possessed by few (potential) competitors
Inimitable
– difficult for replication
Entrepreneurial resource
Ability to obtain, and recombine, resources into a bundle that is valuable, rare, and inimitable
Market knowledge
Information, technology, know-how, and skills that provide insight into a market and its customers
Technological knowledge
Provides insight into ways to create new knowledge
Comfort with making a decision under uncertainty
Error of commission
Negative outcome from acting on the perceived opportunity
Error of omission
Negative outcome from not acting on the new entry opportunity