1

ENTR 4435Introduction to Strategic Entrepreneurship

Alex Bruton

September 2008

2

Contents

• Introduction

• Key concepts: strategic entrepreneurship

• Examples

• Wrap-up

Introduction

3

Learning Outcomes

• At the end of this lecture, you should be able to:

Introduction

1. Define and/or distinguish between:• Strategy and entrepreneurship

• Exploitation and exploration

• Strategic entrepreneurship

2. Provide and discuss examples of each

3. Give reasons why strategic entrepreneurship is critical to the work of the entrepreneur

4

Introduction

iPod by Apple

• Why is it so successful?

5

Strategy and Entrepreneurship?

Key Concepts

6

Key Concepts

Key Concepts

2

7

Examples

iPod by Apple

• Since 2002:

• 162 million units sold

• 90% of market

• Why do I have one of these?

• Why do non-geeks have one of these?

Source: Apple press releases and annual reports – as reported at:http://en.wikipedia.org/wiki/Image:IPodsales_2008Q3.svg

8

2003 2004 2005 2006 2007

25

20

15

10

5

0

Year

Millions iPods sold monthly

Value Created at Apple

Apple

Dell

HP

Microsoft

SHARE PRICES

600%

500%

400%

300%

200%

100%

0%

ROI

Examples

Source: Yahoo Finance

9

Post-it Notes by 3M

• Spencer Silver, 1968

• Adhesive

• Arthur Fry, 1974

• Bookmark

Examples

• From 1980 to 2006:

• One of the top selling office products ever

• Over $100 million in revenues

Source: http://www.3m.com/us/office/postit/pastpresent/history.html10

The Digital Camera

• Kodak, 1975

• 8 lbs

• Toaster-size

• 0.01 megapixels

Examples

• Today:

• Hard to remember life before it

Source: www.msnbc.msn.com/id/9261340/

11

Take these Concepts Further

• Starting and running a business is as important as:

• Encouraging creativity and managing innovation

• Balance

• Operations vs. innovation

• Left brain vs. right brain

• Your own unique processes

Wrap-up

12

Learning Outcomes

• At the end of this lecture, you should be able to:

1. Define and/or distinguish between:• Strategy and entrepreneurship

• Exploitation and exploration

• Strategic entrepreneurship

2. Provide and discuss examples of each

3. Give reasons why strategic entrepreneurship is critical to the work of the entrepreneur

Wrap-up

3

13

Appendix: Definitions

14

Strategy

• “An integrated and coordinated set of commitments and actions designed to exploit core competencies and gain a competitive advantage.”

• Hitt, M.A. et al. (2006) Strategic Management: Competitiveness and Globalization – Concepts, 2nd Canadian Edition. Thomson Nelson.

• “The direction and scope of an organization over the long term, which achieves advantages for the organization through its configuration of resources within a changing environment and to fulfill stakeholder expectations.”

• Johnson, G. and Scholes, K. (2002) Exploring Corporate Strategy, 6th edition. Prentice Hall.

Key Concepts

15

Entrepreneurship

• “An approach to management [defined as] the pursuit of opportunity without regard to resources currently controlled.”

• Stevenson, H.H. (1983) “A Perspective on Entrepreneurship.” In New Ventures and Entrepreneurship, 5th Ed. Stevenson, Roberts et al. (1999), McGraw-Hill.

• “The process through which individuals and teams create value by bringing together unique packages of resource inputs to exploit opportunities in the environment.”

• Morris, M.H. (1998) Entrepreneurial Intensity: Sustainable Advantages for Individuals, Organizations and Societies. Westport, CT: Quorum.

Key Concepts

16

Strategic Entrepreneurship

• A firm’s “efforts to simultaneously exploit today’s competitive advantages while exploring for the innovations that will be the foundation of tomorrow’s competitive advantages.”

• Ireland, R.D. and J.W. Webb (2007). Strategic Entrepreneurship: Creating Competitive Advantage Through Streams of Innovation. Business Horizons, 50: 49-59.

Key Concepts