1 / 50

A Strategy Crafting Concept for Independent, Growth-Oriented, Entrepreneurial Startup Ventures

I - Purpose. Purpose of this Presentation: Present the basic concept underlying a dissertation thesis titled:

johana
Download Presentation

A Strategy Crafting Concept for Independent, Growth-Oriented, Entrepreneurial Startup Ventures

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

    1. A Strategy Crafting Concept for Independent, Growth-Oriented, Entrepreneurial Startup Ventures Daniel K. Hudak Dingman Center Presentation July 12, 2006

    2. I - Purpose Purpose of this Presentation: Present the basic concept underlying a dissertation thesis titled: “A Strategy Crafting Approach for the Special Case of the Independent, Growth-Oriented, Entrepreneurial, Startup Venture”

    3. II - Objective Create a simple intuitive approach that facilitates crafting a creative idea into a unique and definitive new venture strategy This approach is designed to achieve two objectives: 1. Incorporate relevant academic knowledge at the right time and place to compliment the entrepreneur’s intuitive insight 2. Facilitate insight into the alternate opportunities and strategies inherent in the entrepreneur’s creative vision

    4. III – Key Assumptions The Inherent Assumption The “right” academic knowledge on strategy Applied at the “right” decision point in the strategy crafting art Can compliment the entrepreneur’s intuitive insights and yield an enhanced new venture strategy

    5. Other Assumptions: This approach is designed for a “Special Case:” The Independent, growth-oriented, entrepreneurial startup venture in the US business culture This approach is limited to the creation of an over-arching qualitative entrepreneurial strategy.

    6. “Relevant” Knowledge Assumption: Academic knowledge is considered “relevant” if the knowledge - Provides a fundamental theory applicable to the special case - Simplifies the application of a significant complex theory - Is compressible to its basic essential without losing value - Possess an intuitive appeal and understanding - Offers potential solutions to unique entrepreneurial problems - Can be presented consistent with the entrepreneurs mindset The initial academic knowledge set is derived from analysis of the literature review This knowledge set will be tested by subsequent research

    7. III – Design Approach Basic Approach A Five step approach was used to design the entrepreneurial strategy crafting approach: Determine the specific objectives to be accomplished Conduct the literature research Determine the initial relevant academic knowledge Design the strategy crafting decision process Incorporate the academic knowledge into the approach

    8. IV –Literature Search

    9.

    13. The Basic Design The proposed strategy crafting design was developed iteratively, by trial and error, based on consideration and synthesis of the following academic concepts: Traditional strategic management models + Mintzberg’s theory of strategy crafting Eisenhardt’s strategy as simple rules Janis’s vigilant problem solving Kaplin & Norton’s strategy maps Simon’s satisficing concept

    14. The Design Overview A three-phase strategy crafting approach focused on three critical decisions encountered in the art of strategy crafting: Envision the range of opportunities Assess the feasibility of opportunities Craft the new venture strategy Overall design is presented at Figure 1 & Table 1 Following

    16. Table 1 - Entrepreneurial Strategy Crafting Approach Design

    18. VII – Concept Detail by Phase Each of the three phases constitutes a self–contained decision-oriented flow with its own sequence of actions Can be best visualized as a three dimensional flow matrix Each concept phase will be accessed by active links to allow focus on only the relevant consideration

    20. Figure 2 - Phase I - Envision the Opportunities

    21. Table 2 - Phase I Academic Knowledge for Consideration

    24. Figure 3 – Phase II Feasibility Assessment

    25. Table 3a - Phase II Feasibility Assessment: Simple Decision Rules

    27. Table 3b - Phase II Feasibility Assessment: Proto-strategy Defining Characteristics

    30. Phase III – Strategy Crafting Crafting is accomplished by comparatively evaluating. selecting or combining the proto-strategies using: entrepreneurial insight relevant academic knowledge Relevant Academic knowledge is unique to each individual entrepreneurial startup venture It will vary significantly by entrepreneurial venture. One set of knowledge does not fit all. To design entrepreneurial strategy crafting approach suitable for general use Address new ventures’ differing needs for academic knowledge Avoid overloading the entrepreneur with non relevant academic knowledge.

    31. A Decision Tree Approach Each proto-strategy has inherent characteristics, or discriminators, that favor certain types of strategy consideration Use the inherent characteristics to channel strategy crafting into certain paths based on a few fundamental strategy decisions The strategy crafting decisions made at each decision point naturally filters the academic knowledge that will be relevant at future Points A Two-orders of Discrimination: The first order serves to configure the proto-strategy as to its basic type - either a cost-leadership strategy or a differentiation strategy The second order serves to configure each type by its base of strategy: - either a market based strategy or a resource based strategy

    32. The two discriminators combined yield four possible strategy paths: A - Low cost–market based strategy B - low cost–resource based strategy C - differentiation–market based strategy D - differentiation–resource based Strategy Evolutionary Revolutionary

    36. Table 4 Phase-III Strategy Evaluation: First Order Discrimination – Strategy Type

    40. Table 5 Phase-III Strategy Evaluation: Second Order Discrimination - Strategy Base

    41. A Market Based Strategy The existing market determines the strategy Strategy is primarily dependent on the selected market and its industry forces The strategy is limited to one market *The market is selected for attractiveness to the creative idea *The goal is to achieve a sustainable competitive position *The strategy objective is to influence the market so as to improve the new venture’s competitive position Market based strategy is a competition driven zero sum game This strategy is best employed in relatively stable market environments

    42. A Resource Based Strategy The new venture’s resources determine the strategy Strategy is based on the new venture’s internal resources and competencies *Resource-based strategy facilitates reactions to market changes *A competency driven resource strategy can more quickly react to or even create change Resource-based strategy can cross markets and industries Best employed in environments of rapid market or technology change

    43. The above two strategy discriminators have configured the proto strategies into four distinct strategy configurations, each of which will: follow a separate path for final evaluation and strategy crafting. be subject to different sets relevant academic knowledge: The four configurations are: Configuration Path A *Cost Leadership–market based strategy Configuration Path B *Cost Leadership–resource based strategy Configuration Path C *Differentiation–market based Configuration Path D* *Differentiation–resource based D1 – *Evolve the market D2 – *Create the market As an illustration of the Phase III crafting process I will address one of the configuration paths D1

    44. Table 8d.1 - Phase-III Strategy Evaluation; Differentiation – Evolutionary Resource Based Strategy

    45. 2: Prerequisite Requirements Evolutionary – resource based differentiation strategy *Intellectual Capital - the ability to outthink the competition *Conversion Capability - the ability to convert intangible assets into resources *Core Competency Base - the ability to develop a “right” set of core competencies

    46. 3: Intellectual Capital Required Identify and develop the basic core competencies Goal is to continuously create diverse lines of unique products or services with differentiating attributes that that add customer value superior the competitors across multiple markets. The differentiating attributes could include: Improved performance Additional/alternative capabilities Expanded life Increased reliability Aesthetic appeal Environmental or safety factors

    47. 4: Conversion Capability Ability to convert intangible intellectual assets into critical tangible resources and future core competencies The new venture begins with limited resources, mostly intangible. A key strategy consideration is how to convert limited resources, intangible ideas, and visions into: *Tangible capabilities *Core competencies, *Strategic assets *and finally, a sustainable competitive advantage. This entrepreneurial conversion process requires; Identification of the critical resources required for success A method of gaining access to the critical resources Combining the critical resources with the required competencies

    48. 5: Core Competency Recognition Core competencies are the collective learning and ability of the new venture How will the new venture integrate diverse intellectual skills, operational capabilities, and multiple streams of technology to provide a significant contribution to customer value across multiple significant markets?

    49. 6: Other Relevant Strategy Considerations The evolutionary resource-based differentiation strategy allows 1. Increased flexibility Exploit the creative vision across the spectrum of products and services in multiple markets Rapid adjustment to continuous or dramatic changes in key environmental or market conditions 2. Mitigated risk and uncertainty Multiple market dispersion reduces single market risk Avoidance of major market disruption reduces risk 3. The value of multiple markets Creating new products in multiple markets allows the ability to seek premium pricing in multiple markets

    50. 4.The risk of multiple markets multiple markets incurs the risk of dissipating the new venture’s resources and efforts resulting in a potential lack of strategic focus. 5. Consider the impact of potential technological change *What potential technological changes could significantly impact on the new venture’s resource based differentiation strategy and when? 6. Consider the impact of globalization driven change *What potential globalization factors could significantly impact on the new venture’s resource based - differentiation strategy and when?

    51. Conclusion The proposed entrepreneurial strategy crafting concept represents a significant first step towards: A simple intuitive approach that facilitates crafting an entrepreneurial creative idea into a unique and definitive new venture strategy A complement and enhancement to the entrepreneur’s intuitive insight in crafting new venture strategy and inherent alternatives An natural approach for incorporating relevant academic knowledge into entrepreneurial strategy All subject to verification by stakeholder feedback of the initially proposed relevant academic knowledge,

More Related