CHAPTER

ENTREPRENEURIAL STRATEGY: GENERATING AND

EXPLOITING NEW ENTRY OPPORTUNITIES
 OPENING PROFILE
JUSTIN PARER

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 • New Entry
New entry refers to-
i. Offering a new product to an established or new market
ii. Offering an established product to a new market
iii. Creating a new organization (regardless of whether the
product or market is new to competitors or customers)
• Entrepreneurial Strategy
The set of decisions, actions and reactions that first generate, and
then exploit overtime, a new entry in a way that maximizes the
benefits of its newness and minimizes its costs.
 ENTREPRENEURIAL STRATEGY
Stage 3: Feedback loop of resources
Entry
strategy
Knowledge

Risk Firm
Assessment reduction performance
Resource
bundle of new strategy
Other entry
resources opportunity
organization

Stage 1: New entry generation Stage 2: New entry exploitation

 ELEMENTS/ STAGES OF ENTREPRENEURIAL
STRATEGY
1. The generation of a new entry opportunity
2. The exploitation of a new entry opportunity
3. A feedback loop from the culmination of a new entry generation and
exploitation back to stage 1
FEATURES OF A NEW IDEA/PRODUCT/SERVICE

Valuable
Rare
Inimitable
• Valuable- when it enables the firm to pursue opportunities, neutralize
threats, and offer products and services that are valued by customers.

• Rare- when it is possessed by few, if any, (potential) competitors.

• Inimitable- when replication of this combination of resources would be

difficult and/or costly for (potential) competitors.
 HOW TO CREATE A RESOURCE BUNDLE
WHICH IS VALUABLE, RARE AND INIMITABLE
Entrepreneurial resource bundle is the capability / ability of entrepreneurs to
obtain and then recombine, resources into bundle that is valuable, rare and
inimitable.
❖ Market knowledge
❖ Technological knowledge
 ASSESSING THE ATTRACTIVENESS OF A NEW
ENTRY OPPORTUNITY
• Information on a new entry
❑ prior knowledge and information search
❑ window of opportunity
• comfort with making a decision under uncertainty
• Decision to exploit or not to exploit the new entry
 Level of
Search
information on
new entry

Window of Go/ no go
opportunity still decision to exploit
Knowledge open new entry

Preference for Comfort with

error: omission making decision
/commission under uncertainty

Figure: the decision to exploit or not to exploit the new entry opportunity
 ENTRY STRATEGY FOR NEW ENTRY
EXPLOITATION
• First movers develop a cost advantage
• First movers face less competitive rivalry
• First mover can secure important channels
• First movers are better positioned to satisfy customers
• First movers gain expertise through participation
FACTORS THAT INFLUENCE THE DECISION TO ENTER THE
MARKET NOW OR TO DELAY ENTRY
First –mover First-mover
advantages disadvantages

and
Cost advantages
less compe tit ion

Environmental
rtant instability
Support of impo
channels

ainty
r Customer uncert
Prime position fo
customers

Short lead time

Expertise from
participation
 FIRST-MOVER DISADVANTAGES
• Environmental instability
✔ Demand uncertainty
✔ Technological uncertainty
✔ Adaptation
• Customer Uncertainty
✔ Usage of products/ services
✔ Uncertain about the benefits
✔ Lack in reference of the information
✔ Uncertainty regarding lack in knowledge of operation
 FIRST-MOVER DISADVANTAGES

• Lead time
✔ building customer loyalties
✔ building switching cost
✔ protecting product uniqueness
✔ securing access to important sources of supply and distribution
 RISK REDUCTION STRATEGIES FOR NEW
ENTRY EXPLOITATION
• Market scope strategies
Narrow-scope strategy
❖ By focusing on a specific group of customers
❖ Market niche
Broad-scope strategy
• Imitation strategies
❖ Franchising
❖ Me-too
 MANAGING NEWNESS

Liabilities Asset

Incurred cost to learn new tasks Newness

Conflicts regarding role boundaries Clean slate for learning

Communication difficulties Strategic advantage in dynamic and

turbulent environment