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Entrepreneurship

VIEWS: 2 PAGES: 27

									Entrepreneurship


   A strategic viewpoint
Entrepreneurship Defined
 Economically
 Socially
 Characteristically
 Systematically
 Behaviorally
 Strategically
What is Strategy?
 The essence of strategy is to match strengths
  and distinctive competencies with the
  environment in such a way that one enjhoys a
  competitive advantage over one’s rivals in the
  same environment.
Entrepreneurship as a business strategy

 Four Strategic Plans
   Personal
   Opportunity Recognition
   Business Strategy
   Functional Strategy
What is a PES?
 The equivalent of a personal business plan
 Puts you in charge of evaluating and shaping
  choices
 Puts you in charge of initiating action
 Choice rather than random happenstance
Why plans fail
 Frustration with lack of immediate success
 Inability to make the switch to results, or goal
  orientation.
 Poor planning and implementation skills.
Basis for a Personal Entrepreneurial
Strategy
 Self assessment based on evaluation of
    Your thoughts and actions
    Feedback from others
        Become aware of blind spots

        Reinforces your concepts of your strengths and
         weaknesses
 Evaluation of data that you gather
 Develop insights about yourself
 Establish goals to fill in the blank spots
    Education
    Experience
 To make appropriate choices-to find fit with the ideas
  that present themselves.
Crafting the Strategy
 Profile the past
      What have you done
      What are your lifelong preferences
      What would you most like to be doing
      How has your history influenced your value
       system, motivations, attitudes and behaviors
Crafting the Strategy
 Profile the present (cont’d)
    Take stock of your entrepreneurial attitudes, needs,
     wants
    Compare with key attributes of an entrepreneur
       Determination, commitment, perseverance, goal

         orientation, internal locus of control
    Compare with the Behavioral Orientation
       Promotor or Trustee

    Compare with the external environmental demands
       Stress, time constraints,commitment required, ethics
Crafting the Strategy
 Get Constructive Feedback
      Solicit the feedback
      Understand the context
      Set up the interchange-ask questions first
      Be sure you understand what you are being told. Ask
       clarifying questions.
      Encourage straight forward answers-build a supportive
       climate.
      Feedback needs to be both positive and negative.
      Get feedback in writing.
      No hidden agendas and no games- be honest with yourself
      Don’t become defensive
      Be an active listener and listen to answers carefully.
      Don’t reach conclusions prematurely
Structure of a Personal Entrepreneurial
Strategy
 Vision
 Strengths
 Weaknesses
 Personal Wants
 Specific Goals
 Plan to fill in the missing pieces
 Personal strategy-How will you accomplish
  each of the goals
 Get feedback from trusted sources
Business Strategy
Crafting the Strategy
 Examine the fit between you, the
  entrepreneur, and the potential opportunity
     SWOT analysis
     Sustainable competitive advantage
     Match attractiveness to entrepreneurial needs
Strategy depends on enterprise,
entrepreneur, environment (three e’s)
 Strengths, Weaknesses, Competencies
     Entrepreneur
     Enterprise
 Competencies vs. Core Competencies
 vs. Distinctive Competencies


 A company competence, or strength, is the
  product of organizational learning and
  experience and represents real proficiency in
  performing an internal activity

 A core competence is a well-performed internal
  activity that is central (not peripheral or incidental) to
  a company’s competitiveness and profitability

 A distinctive competence is a competitively
  valuable activity that a company performs better
  than its rivals
   Industry Key Success
   Factors

   3 - 5 really major determinants of
financial and competitive success in an
                 industry
Distinctive Competencies Key
Success Factors and Sustainable
Competitive Advantage
                Sustainable Competitive Advantage
                Competitive Advantage
                Key Success Factors
                Distinctive Competencies
Characteristics of Business Strategy
 Mission and Vision
 Goals
 Strategy
 Implementation
 Evaluation of Results
   Process Begins with a
   Personal and Company Vision
 Charts your personal and the
  company’s future strategic
  course
 Defines the business makeup
  for 5 years (or more)
 Specifies future technology-
  product-customer focus
 Indicates capabilities to be
  developed
Goal setting
 Goals are the targets that you need to
  accomplish in order to make your vision a
  reality
 Goals must be
     Specific
     Time constrained
     Measurable
     Realistic and attainable
Strategy
 Grand
     Growth, Pause and Reorganize,
      Retrenchment
 Generic
     Low Cost
     Differentiation
     Best Cost
Strategy (cont’d)
 International
     Domestic
     Export
     Multi-country
     Global
Opportunity Recognition Strategy
 Strategy to create flow of ideas
 Strategy to quickly and efficiently evaluate
  ideas
 Determine fit with PES
Four Anchors that Define the
Opportunity as a Superior business

1. Create or add significant value to a
   customer or end user
2. Solve a significant problem or meet a
   significant want or need for which someone
   is willing to pay a premium
Four Anchors that Define the
Opportunity as a Superior business
3. Possess robust market, margins, moneymaking characteristics
     a. Large enough market (at least $50 million)
     b. High enough growth rate ( 20% per year)
     c. High gross margins
     d. Strong and early free cash flow
     e. High Profit Potential (10-15 % after tax)
     f. Attractive, realizable returns for investors (25-30 percent
     IRR)
Four Anchors that Define the
Opportunity as a Superior business
4. A good fit with the entrepreneur’s personal
  criteria and needs, and with the management
  team’s needs, at this time and in this
  marketplace with a risk/reward balance
Functional Strategies
 Marketing
 Financial
 Organizational
 Lots of others depending on the venture

								
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