Chapter 4- Entrepreneurship lecture International University- HCMcity

1. Technology Ventures: From Idea to OpportunityChapter 4: Summary
Praise competitors. Learn from them. There are
times when you can cooperate with them to
their advantage and to yours.
George Mathew Adams
How can ventures create a strategy to fit the new business
opportunity?
Every new venture has a strategy or approach to achieve its goals.
The strategy is developed using the business model, an
understanding of the industry, and the context and the key factors
for success.
Summary

2. Technology Ventures: From Idea to OpportunityChapter 4: concept
A strategy is a plan or road map of the actions that
a firm or organization will take to achieve its mission
and goals, but it is not static.

3. Technology Ventures: From Idea to OpportunityChapter 4: Table 4.1
The Management Process for Developing a Strategy
1. Develop the vision and mission statement, and business model.
2. Describe the firm's core competencies, its customers, and its
competitive advantage.
3. Describe the industry and context for the firm and describe the
competitors.
4. Determine the firm's strengths and weaknesses in the context of the
industry and environment.
5. Describe the opportunities and threats for the venture.
6. Identify the key factors for success using the six forces model.
7. Formulate strategic options and select the appropriate strategy.
8. Translate the strategy into action plans with suitable measures and
controls.

4. Technology Ventures: From Idea to OpportunityChapter 4: Figure 4.2
Why are we
pursuing this
objective?
 The vision
Where will be active?
 The customer and
market
How will we achieve
our objective?
 Innovation
 Acquisitions
When will we act
and at what speed?
What will differentiate
our product?
Who will we compete
with and cooperate
with?
The six questions for creating a dynamic strategy. Profitability rests on
six solid answers to these questions.
Profitability

5. Technology Ventures: From Idea to OpportunityChapter 4: Figure 4.3
b
c
a
d
e
5. Bargaining power
of complementors 6. Bargaining Power of
suppliers
2. Threat of entry by
new competitors
3. Threat of Substitute
Products
4. Bargaining
Power of
complementers
1. Firm
Rivalry
Note: Firms are represented by a
circle represents firm a. The size of
the circle indicates the size of revenues of
the firm. The six forces are numbered for
clarity. The rivalry of the firms is shown
as a vortex of competition.
a

6. Technology Ventures: From Idea to OpportunityChapter 4: Table 4.4
Organizational Environmental
1. STRENGTHS:
Highly productive
pilots, ground and
flight crews.
Low costs
1. OPPORTUNITIES:
Ability to add
scheduled flights to
new cities.
Low prices enable
market share growth
2. WEAKNESSES:
Inability to provide
non-stop long
distance travel
2. THREATS:
Inability to secure
new gates at
airports.
Competition from a
potential low cost
rival such as JetBlue
SWOT analysis for Southwest Airlines

7. Technology Ventures: From Idea to OpportunityChapter 4: Table 4.5
Potential Barriers to entry into an industry
• Economies of Scale
• Cost advantages Independent of Scale
• Product Differentiation
• Contrived Deterrence
• Government Regulation
• Switching Costs
Barriers to entry are factors that make it
costly for companies to enter an industry.

8. Distinctive competencies lead to competitive advantage.
Technology Ventures: From Idea to OpportunityChapter 4: Figure 4.5

9. Technology Ventures: From Idea to OpportunityChapter 4: Table 4.6
FACTOR TYPE OF STRATEGY
Differentiation Low Cost Differentiation
Cost
Niche
Distinctive
Competencies
Innovation,
Relationships
Processes,
Logistics
Innovation and
Processes
Relation
ships
Product
Differentiation
High Low Medium Medium
Market
Segmentation
Many Segments Mass Market Many Segments One or
Two
Segme
nts
Examples Intel
Microsoft
RadioShack
Wal-Mart
Dell
Southwest
Airlines
Getty
Images
Incyte
Four Common Types of Strategies and Their Characteristics

10. Technology Ventures: From Idea to OpportunityChapter 4: Principle 4
Principle 4
A clear road map (strategy) for a new venture states how it will act to
achieve its goals and attain a sustainable competitive advantage.

11. Technology Ventures: From Idea to OpportunityChapter 4: Exercise
Briefly describe the strategy of your college or school using the
questions of Figure 4.2 and using success rather than profitability
as the desired outcome.

12. Technology Ventures: From Idea to OpportunityChapter 4: Venture Challenge
VENTURE CHALLENGE
1)Develop a SWOT analysis using the format of
table 4.4.
2)Select your strategic approach from table 4.6.
3)Describe your strategy in one or two sentences
that could be circulated to your employees and
allies.

13. Technology Ventures: From Idea to OpportunityChapter 4: DVD Video
DVD Video
“Timing is Important: The Same Idea Can Have
Different Fates”
Jerry Kaplan (Winster)