University of Sialkot

Department of Business Administration

Batch: BBA 6th Subject:  Entrepreneurship Assignment No.: 2

Instructor: Dr. M. Wasim Akram Code: MGT-3007

Name: __________________________ Reg. No.____________________Signature:_________________

Question # 1:
What are the eentrepreneurial strategies to generating and exploiting new entries?
New Entry: - New product in an established or new market
- Established product in a new market
- A new organization
entrepreneurial strategy Set of decisions, actions, and reactions that generate, and exploit, a
new entry over time
Generation of a New Entry Opportunity resource
- Inputs into the production process
- Source of competitive advantage
- Basic building blocks to a firm's functioning
- Can be combined in different ways
Provide capacity to achieve superior performance when they are:
- Valuable
- Rare
- Inimitable
creating a resource bundle that is valuable, rare, and inimitable by using
market knowledge an technological knowledge these are drawn from the unique experiences and
knowledge
market knowledge: Information, technology, know-how, and skills that provide insight into a market
and its customers
technological knowledge: provides insight into ways to create new knowledge
assessing the attractiveness of a new entry opportunity:
 determining whether the entrepreneurs believe that they can make the proposed new entry
work
- level of the information (search and knowledge)
- window of opportunity; period of time when environment is favorable for them to exploit a new
level of entry
- willingness to make decision without perfect information
- figure 3.2
First Mover Advantages:
 Develop a cost advantage
- Face less competitive rivalry
- Can secure important channels
- Better positioned to satisfy customers
- Gain experience through participation
first mover disadvantages
Demand uncertainty: Difficulty in estimating:
- Potential size, growth, and the key dimensions along which a market will grow
Technological uncertainty: Difficulty in assessing whether:
- The technology will perform
- Alternate technologies will emerge and leapfrog over current technologies
Adaption
- Persistence and determination can inhibit the ability to adapt
Customer uncertainty
- difficulty in accurately assessing whether the new product or service provides value
Overcome customer uncertainty by:
- Informational advertising
- Highlighting product benefits over substitutes
- Creating a frame of reference for potential customers
- Educating customers through demonstration and documentation
lead time - Grace period in which the first mover operates in the industry under conditions of limited
competition
Lead time can be extended by: - Building customer loyalties
- Building switching costs
- Protecting product uniqueness
- Securing access to important sources of supply and distribution
switching cost must be borne by customers if they:
- stop purchasing from the current supplier and begin purchasing from new supplier
Risk Reduction Strategies for New Entry Exploitation: market scope strategies
imitation strategies
market-scope strategies
- Scope: Choice about which customer groups to serve and how to serve them
- Narrow-scope strategy
- Offers small product range to a small number of customers to satisfy a particular need
- Focuses on:
- Producing customized products
- Localized business operations
- High level craftsmanship
- High-end of the market
- broad scope strategy
- Offers range of products across different market segments
- Helps gain better understanding of the whole market
- Opens the firm up to many different "fronts" of competition
- Reduces risks associated with market uncertainties
- Increases exposure to competition
imitation strategies: - Copying practices of other
- Advantages
- Help develop skills necessary to be successful in the industry
- Provide organizational legitimacy
- Reduce costs associated with R&D
- Reduce customer uncertainty over the firm
- Make the new entry look legitimate from day one
types of imitations strategies
franchising
- acquiring a proven formula for new entry from a franchisor
me-too strategy
- copying exist products and attempting to build an advantage through minor variation
liabilities of newness
- Negative implications arising from an organization's newness
- Arise from:
- Costs in learning new tasks
- Conflict arising from overlap or gaps in responsibilities
- Informal structures of communication
Assets of Newness
 Positive implications arising from an organization's newness
- Learning advantage
https://quizlet.com/189848716/chapter-3-entrepreneurial-strategy-generating-and-exploiting-new-
entries-flash-cards/
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