STRATEGIC ENTREPRENEURSHIP

TOPIC 1
INTRODUCTION TO THE CONCEPT
OF STRATEGIC
ENTREPRENEURSHIP
Table 1: The birth of strategic entrepreneurship
Name of Author Year Issues relate to strategic entrepreneurship
Mintzberg 1973 Introduce the notion of entrepreneurial strategy making
Schendel&Hofer 1979 Argued that the entrepreneurial choice is at the heart of the concept of strategic
Burgelman 1983 Empirically examine the interrelationship between strategic management and entrepreneurship
inside a large corporation
Covin&Slevin 1989 Posited the concept of entrepreneurial strategy posture examining a firms competitive
orientation on a spectrum from conservative to entrepreneurial
Chittipeddi&Wallett 1991 Reviewed macroscopic trend impacting business and argue that the ethos of entrepreneurship
would pervade winning firms and that ‘the organizational’ archetype of the future will be
entrepreneurial . Its leadership, strategies, and structure will reflect entrepreneurial thinking with
associated traits such as flexibility, innovativeness, and a problem solving actions orientation.

Day 1992 Examined the research linkages between entrepreneurship, strategy management, and
general management and offers one possible configuration of their interrelation.

Sandberg 1992 Investigated cross-fertilization opportunities between strategy management and

entrepreneurship and posited six fertile areas; innovation; new business creation; opportunities
seeking; risk assumption; top management teams; and group processes used in strategic
decisions.
Barringer&Bluedorn 1999 Studied the relationship between entrepreneurial intensity and five strategic management
practices finding statistically significant results for the impacts of scanning intensity, planning
flexibility, locus of planning and strategic controls.
Meyer & Heppard 2000 Edited the first scholarly book addressing the interface between entrepreneurship and strategy
to uncover the components of a firm’s entrepreneurial ‘dominant logic’ independent of firm size.
 The Birth of Strategic
Entrepreneurship
 There are three perspectives on the marriage of strategic and
entrepreneurship.
 strategic management is “dominants” over entrepreneurship (Baker
and Pollock, 2007 cited in Rensburg, 2013)
 strategic management is itself a “subset” of entrepreneurship (Browne
& Harms, 2003 cited in Rensburg, 2013)
 Strategic management “intersection” with entrepreneurship
(Rensburg, 2013).
 The former indicates that the entrepreneurship concepts can be explained
by the strategic management domains while the later argues that strategic
management only the division of entrepreneurship field.
 The “intersection” perspective agrees with the overlapping of research’s
areas and suggests that the marriage should be created through
combining the core advantages of each which are the strategic and
entrepreneurship.
 The Birth of Strategic
Entrepreneurship
 The term of ‘Strategic Entrepreneurship’ was first
pointed out by Herbert & Brazeal (1998 cited in
Rensburg, 2013).
 Researchers in Strategic Entrepreneurship field,
studies on board of directors’ roles, firm resources
and capabilities, and financial implications
(Rensburg,2013).
 Other researchers study on the combination of
opportunities seeking behaviour (exploration) and
advantages seeking behaviour (exploitation) and
relates it to wealth creation (Hitt et al. cited in
(Rensburg, 2013)
 What is Strategy?

The Implicit Strategy Model of the Past Sustainable Competitive Advantage

Decade
• One ideal competitive position in the • Unique competitive position for the
industry company
• Benchmarking of all activities and • Activities tailored to strategy
achieving best practice
• Aggressive outsourcing and • Clear trade offs and choices vis-à-vis
partnering to gain efficiencies competitors
• Advantages rest on a few key success • Competitive advantages arises from
factors, critical resources and core fit across activities
competencies
• Flexibility and rapid responses to all • Sustainability comes from the activity
competitive and market changes system, not the parts
• Operational effectiveness a given
Sources : Michael E.Porter, (1996 cited in Kuratko, D. F. &
Hodgetts, R. M., 2004: 532)
 Strategic Entrepreneurship and Strategic Management

Source : Wheelen, T. L. and Hunger, J. D. (2000 cited in

Kuratko, D. F. & Hodgetts, R. M., 2004: 521).
 How strategic management relates to strategic
entrepreneurship?

• Innovation
• Networks
• Internalization Strategic
Entrepreneurial • Organizational
actions Learning actions
• Top Management
Teams and
governance
• Growth

Source : R. Duane Ireland, Micheal A.Hitt, S. Michael Camp, Wealth Creation

and Donald L.Sexton, (2001 cited in in Kuratko, D. F. &
Hodgetts, R. M., 2004: 531)
 Components of Strategic
Entrepreneurship
Resource Management

Opportunity
Growth identification
Innovation

Strategic
Entrepreneurship
vision Acceptance
of risk
Flexibility

Dynamic capability
Sources : Kyrgidou, L. P. And
Mathew Hughes, M. (2009: 49)
 Components of Strategic Entrepreneurship

 Opportunity identification - suggested to be an important

source of competitive advantage (Hitt et al., 2002), which
can lead to entrepreneurial opportunity creation.
 Innovation or the ability to innovate - one of the distinctive
competencies of entrepreneurial firms (Kirby, 2003).
Sonfield and Luccier (1997) expand on this concept
proposing that the most effective way to position an
entrepreneurial firm is to use risk and innovation.
 Risk - referring to perceived environment (Smircich and
Stubbart, 1985). The entrepreneur does not make a
conscious decision to engage in highly risky projects, but
rather their perception of that situation is of moderate
rather than of high risk (Busenitz and Barney, 1997).

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 Components of Strategic Entrepreneurship

 Flexibility- firms should be able to respond to change

quickly, independent of their current strategy (Eisenhardt
et al., 2000). Flexibility refers to balancing structure with
the freedom to implement and change strategy
(Eisenhardt et al., 2000), which in turn will facilitate quick
response to change (Bhide, 1994).
 Vision- Establishing a clear vision and developing strategy
that focuses both on opportunity and advantage within
that vision (Hitt et al., 2001) enhance opportunity
identification
 Growth is related not only to innovative and creative ideas,
but also to the structure and strategy to turn such ideas
into profitable ventures resources and dynamic capabilities
appear

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 Definition of Strategic
Entrepreneurship
 Strategy entrepreneurship is the use and/or stimulation
of entrepreneurial activity to achieve strategic goals,
(Kuratko & Audretsch, 2009 cited in Rensburg, 2013).
 In addition, strategic entrepreneurship is still mainly a
rather loose amalgam of a number of insights from
strategy and entrepreneurship (Foss & Lyngsie, 2011, p.
16).
 Strategic entrepreneurship describing an input-process-
output model that entails: organizational resources,
individual knowledge, and skills, and environmental
factors as inputs.
 Definition of Strategic
Entrepreneurship
 Guth & Ginsberg (1990), they replace strategic renewal
with strategic entrepreneurship relegating strategic
renewal to sub strategy of strategic entrepreneurship.
Moreover, strategic entrepreneurship can be enacted
within small medium size enterprise as well as within
large established corporations (Resburg, 2013).
 The existences of entrepreneurial behaviour in large
frim is either the result of a deliberate or an emergent
strategy or as Burgelman (1993b) described it the result
of induced strategy behaviour or autonomous strategy
behaviour.
 Strategic Entrepreneurship Theory

Sources : Kyrgidou, L. P. And Mathew Hughes,

M. (2009: 53)
 Conclusion
 Entrepreneurs do not use strategic planning for many reasons
because:
 scarcity of time
 lack of knowledge about how to plan
 lack of expertise in the planning process,
 lack of trust in others.
 Benefits to strategic entrepreneurs are:
 have better financial performance
 more efficient resource allocation
 improved competitive position
 higher employee morale
 more rapid decision making

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 REFERENCES
 Rensburg, D.J.V. (2013). Is Strategic Entrepreneurship a Pleonasm?. Journal of Management and
Strategy, 4, 1, 15-27.
 Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice. Mason,
Ohio: Thomson/South-Western
 Kyrgidou, L. P., & Hughes, M. (2010). Strategic entrepreneurship: Origins, core elements and
research directions. European Business Review, 22, 1, 43-63
 Dollinger, M, J. (2008). “ENTREPRENEURSHIP: Strategies and Resources Fourth Edition”, Kelley
School of Business, Indiana University. MARSH publications, pp. 33-40.
 Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2009). Entrepreneurship. New York: McGraw-Hill
Higher Education.
 Lieberman, M. B., & Montgomery, D. B. (1988). First‐mover advantages. Strategic management
journal, 9(S1), 41-58.
 Zimmerer, T., Scarborough, N. M., & Wilson, D. (2002). Essentials of entrepreneurship and small business
management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.
 Barringer, B and Ireland, D (2012) Entrepreneurship – Successfully Launching New Ventures (4th Ed.).
Pearson Education, Global Edition. (B1)
 Dollinger, Marc J., (2003) Entrepreneurship: Strategies and Resources, 3rd Edition, Prentice Hall
International Edition. (B2)
 Wickham, P. A. (2006) Strategic Entrepreneurship. (4th. Ed.). England: Pearson Education Ltd. (B3)
 Timmons J, Spinelli S, (2007) New Venture Creation: Entrepreneurship for the 21st Century, 7th.
Edition, McGraw Hill International Edition.
 Roberts,M, Stevenson, H., Shalman, W., Marshall, P., and Hamemesh, (2007) New Business Venture
and The Entrepreneur, 6th. Edition, McGraw Hill International Edition.
STRATEGIC ENTREPRENEURSHIP

TOPIC 2
ENVIRONMENTAL SCANNING FOR
STRATEGIC ENTREPRENEURSHIP
Strategic Entrepreneurship and Strategic Management

Source : Wheelen, T. L. and Hunger, J. D.

(2000 cited in Kuratko, D. F. & Hodgetts,
R. M., 2004: 521).
 NEW PRODUCT AND STRATEGY

Includes:
• 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
 NEW PRODUCT AND IDEAS

• Types of ideas that develop based on different ideas

Environmental Scanning for Strategic
Entrepreneurship

Source : Hisrich, R. D., Peters, 2009

 Environmental scanning
 Environmental scanning is one of the components of global
environmental analysis.
 Other components are monitoring, environmental
forecasting and environment assessment
 The global environment refers to macro environment which
comprises of industries, markets, companies, clients and
competitors.
 Societal Environment, Task Environment and Internal
Environment are the components that employed in
environmental scanning
 External/Societal Environment

 External- refers to factors, forces or situation and events

outsides the organization and the affects of its performance.
 Economic forces, Sociocultural forces, political-legal forces
and technological forces construct the social environment
element.
 The economic forces encompasses factors such as interest
rates, inflation, changes in disposable income and stock
market fluctuation.
 The technological forces concerned on new systems or
technical knowledge in the business that have the ability to
influence the overall business performance.
 External/Societal Environment

 The sociocultural forces component focusing on societal

and cultural factors such as values, attitudes, trends,
traditions, lifestyles, beliefs, tastes and patterns of behavior.
 The Political-Legal forces are regulatory and political
dispensations of any given national or state government are
determined by the orientations of its ideology. These
political and legal forces shape the profile of your business
environment. It is important to understand these forces and
their impact on the performance of your business to
navigate these channels successfully.
 Task Environment (INDUSTRY)
 Task environment (industry) analysis exposes that shareholders,
suppliers, Employees/labor unions, competitors, trade
associations, communities, creditors, customers, special interest
group and governments are ten parties that influencing the
company performance.
 For instance experts say that by 2050, the number of company’s
customer will increase. This increasing of customer may affect the
overall business system in the organization.
 Besides that, government also plays an important role in targeting
the growth of the business. Some of laws and legislation may
affect the productivity of the company entirely.
 Internal Environment

 The Internal environment consist of company structure,

culture and resources.
 The conditions, entities, events, and factors within an
organization will influence its activities and choices,
particularly the behavior of the employees.
 Factors that are frequently considered as part of the
internal environment include the organization's mission
statement, leadership styles, and its organizational culture.
 References

 Aashish Mehra, G. S. (2011). Managing rapid growth : How mid caps can leap into the billion
dollar club .
 Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice.
Mason, Ohio: Thomson/South-Western
 Dollinger, M, J. (2008). “ENTREPRENEURSHIP: Strategies and Resources Fourth Edition”,
Kelley School of Business, Indiana University. MARSH publications, pp. 33-40.
 Drucker, P. F., & Drucker, P. F. (2007). Innovation and entrepreneurship: Practice and
principles. Routledge.
 Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2009). Entrepreneurship. New York:
McGraw-Hill Higher Education.
 Lieberman, M. B., & Montgomery, D. B. (1988). First‐mover advantages. Strategic
management journal, 9(S1), 41-58.
 R. Barringer, Duane,(2009).Successfully Launching New Ventures: McGraw-Hill Higher
Education.
 Zimmerer, T., Scarborough, N. M., & Wilson, D. (2002). Essentials of entrepreneurship and
small business management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.
STRATEGIC ENTREPRENEURSHIP
 SEIZING BUSINESS
OPPORTUNITIES: VISSION,
MISSION AND OBJECTIVE
Strategic Entrepreneurship and Strategic Management

Source : Wheelen, T. L. and Hunger, J. D.

(2000 cited in Kuratko, D. F. & Hodgetts, R.
M., 2004: 521).
 Business Opportunities

 What is a Business Opportunity?

 A business opportunity is said to exist when:
 There is a possibility of offering a new product or service
in a particular market.
 The product or service fulfills the demands and
preferences of the customers.
 Where the product can be used to solve their problem.
 Business Opportunities

 When and Why is there a need to offer a

product or service in a particular market:
 When?
 Changes in Environmental Factors
 Political and Legal
 Economic
 Social
 Technological
 Why?
 Because Environmental Factors effect customers’
demand for particular product or service.
 Business Opportunities

 Involve the process of identifying, evaluating

and selecting a business opportunity.
 Identify the needs and wants of customers.
 Scanning (examining) the environment and
evaluating of self (entrepreneur) and the community.
 Screening (Process of evaluating) of business
opportunities.
 Selecting a business opportunity
 Preparing a Business Plan.
Process of Identify and Evaluate
the Business Opportunity
 Evaluating an Opportunity
The feasibility of an idea refers to how possible or worthwhile it
is to pursue it, to see if it is actually an opportunity.

Three methods for determining the feasibility of business ideas

are:
 Cost/Benefit Analysis. This is the process of adding up all the
expected benefits of an opportunity and subtracting all the
expected costs. If the benefits outweigh the costs, the
opportunity may be worthwhile.
 Opportunity-Cost Analysis. An opportunity-cost analysis
examines the potential benefits that you forfeit when you
choose one course of action over others.
 SWOT Analysis. This is a business evaluation method that
draws its name from the four areas it evaluates—Strengths,
Weaknesses, Opportunities, and Threats.

Entrepreneurship: Owning Your Future, 11th ed. © 2010 Pearson Higher Education,
Steve Mariotti Upper Saddle River, NJ 07458. • All Rights Reserved.
 Sources of Opportunity
Sources of opportunities include:
 Problems. Many well-known companies were started because
an entrepreneur wanted to solve a problem.
 Changes. Our world is continually changing. Change often
produces needs or wants that no one is currently meeting.
 New Discoveries. The creation of totally new products and
services can happen by accident.
 Existing Products and Services. You can get ideas for
opportunities from businesses that already exist by looking for
ways to improve a product significantly.
 Unique Knowledge. Entrepreneurs sometimes turn one-of-a-
kind experiences or uncommon knowledge into a product or
service that benefits others.

Entrepreneurship: Owning Your Future, 11th ed. © 2010 Pearson Higher Education,
Steve Mariotti Upper Saddle River, NJ 07458. • All Rights Reserved.
 Industry Types and the Opportunities

 Emerging Industries
 Industries in which standard operating procedures
have yet to be developed.
 Opportunity: First-mover advantage
 Fragmented Industries
 Industries that are characterized by a large number of
firms of approximately equal size.
 Opportunity: Consolidation
 Industry Types and the Opportunities

 Mature Industries
 Industries that are experiencing slow or no increase in
demand.
 Opportunities: Process innovation and after-sale service innovation
 Declining Industries
 Industries that are experiencing a reduction in demand.
 Opportunities: Leadership, establishing a niche market, and
pursuing a cost reduction strategy]
 Global Industries
 Industries that are experiencing significant international
sales.
 Opportunities: Multidomestic and global strategies
Vision
 Vision

A vision is a guiding image of success

Inspiration
 Begins with intuition and
ideas

 Evolve through discussion

Vision
 Result in a shared sense of
Guidance Motivation direction and motivation
 Vision
 It answers the question
“What will success look
like?”
 It is compelling
 It challenges and inspires
the group
 It focuses first on the client
 It describes what the
organization will look like
when functioning
effectively.
Examples
“A just world without poverty”
“To become a world leader at
connecting people to wildlife and
conservation”
“To become the most influential
bridge between investors and
entrepreneurs”
“To refresh the world, inspire
moments of optimism and happiness
and make a difference”
 Examples of visions

1. McDonald’s - We are committed To doing what is

right. To being a good neighbour and partner in
the community To conduct our business with the
environment in mind
2. Ford – our company delivers excellent products
and services and strives to make the world a
better place.
Mission
 Mission

Mission describes the overarching purpose of the

organization – the reason it exists.

 Who are you, as an  Purpose: sentence that describe the end result
organization?  An infinitive that indicates a change in
status
 Why do you exist?  An identification of the problem or
condition to be changed
 What do you do?
 A description of the primary means used to
 Who do you serve? accomplish that purpose
 Create Your Mission Statement

• What is the problem that exists to solve?

• Who is affected by the problem?
• How would the community be improved, changed or
different if your organization’s efforts were
successful?

• What is the purpose of your organization?

• Why does it exist?
• What is the ultimate outcome or result you are
hoping to achieve?
 Create Your Mission Statement
• What business are you in?
• What do you do to fulfill your purpose?
• What is the broadest way in which you could
state your work?

• For whom do you work?

• Who is your target population, your audience,
your market?

• Where do you work?

• What are your geographic boundaries?
Difference Between Mission and Vision

 A mission statement describes the *present*

state of a person or organization: "Who are
you? Why are you here? Why do you exist?"

 The vision statement describes *future* state:

"Who do I want to be? Where do we want to
go?" The vision should be inspirational and
slightly out of reach. Typically, it is a person or
organization's vision that provides a framework
for planning.
 Objectives

 After developing mission statement, objectives

are required to define. Objectives are much
specific than mission statement
 For example- I want to finish my assignment by
10 o’clock this morning. This indicates to
perform a number of tasks including typing text
into computer, reviewing some
questions/criteria that have already be written,
printing out the assignment for proofreading
and so on.
 Objectives
Objectives must be evaluated by SMARTER tools:

S •Specific

M •Measureable

A •Attainable

R •Realistic

T •Timeframe

E •Extending

R •Rewarding
 REFERENCES
 Barringer, B and Ireland, D (2012) Entrepreneurship – Successfully Launching New
Ventures (4th Ed.). Pearson Education, Global Edition.
 Dollinger, Marc J., (2003) Entrepreneurship: Strategies and Resources, 3rd Edition,
Prentice Hall International Edition.
 Mariotti, S. (2010). Entrepreneurship: Owing Your Future. (11th Ed.). England: Pearson
Education Ltd.
 Hitt, M. A., Ireland, R.D., & Hoskisson, R.E. (2011). Strategic Management:
Competitiveness & Globalization. (9th. Ed.). Canada: South-Western Cengage
Learning.
 Wickham, P. A. (2006) Strategic Entrepreneurship. (4th. Ed.). England: Pearson
Education Ltd.
 James P. Lewis (2001) “Fundamentals of Project Management: Developing Core
Competencies to Help Outperform the Competition” (2nd edition), AMACOM
publisher.
 Kuratko, D. F., & Hodgetts, R. M. (2004). Entrepreneurship: Theory, process, practice.
Mason, Ohio: Thomson/South-Western
 Leong, B. (2011). Introduction, Identifying Ideas & Business Opportunities, Nanyang
Technological University.
 Slideshare. (2007). Entrepreneurship studies – Chapter 2, Cosmopoint International
University College, School of Business.