QAQC Report 2

Selected Article: Choi & Shepherd (2004)

Quote: “Consistent with elements of the resource-based view, we found that entrepreneurs were
more likely to exploit opportunities when they perceived more knowledge of customer demand for
the product, more fully developed enabling technologies, greater managerial capability, and greater
stakeholder support.”

Argument: Choi and Shepherd outline that organizations need several resources internally to
effectively exploit a innovative product and reach competitive advantage. They address resources
and capabilities such as mentioned in the quote to analyse it’s impact on entrepreneur’s decision to
exploit opportunities. Furthermore, the above (see quote) mentioned are aspects of the resource
based view, that suggests that various external and internal factors of a firm can neutralize or
dissipate a resource’s competitive advantage.

First of all, entrepreneurs are more likely to exploit opportunities when they perceived more
knowledge of customer demand for the product. Choi and Shepherd argue that this is because
demand uncertainty arises with new products. Customers are initially uncertainty averse and on the
contra side, this leads to uncertainty for the entrepreneurs over customer demand. They need to
resolve this to commit to exploitation.

Secondly, entrepreneurs are more likely to exploit opportunities when they perceived more
developed enabling technologies. The authors give uncertainty as a reason again. Entrepreneurs face
uncertainty over costs and profitability when technologies are not developed, causing entrepreneurs
not willing to translate opportunity into product specification.

Furthermore, entrepreneurs are more likely to exploit opportunities when they perceived greater
managerial capabilities. That’s because it reduces the risk of failure, the authors discuss: “Better
managerial capabilities allow firms to more efficiently and effectively choose and implement the
activities necessary to produce and deliver a product or service to customers”.

At last, greater stakeholder support ensures entrepreneurs are more likely to exploit opportunities,
according to Choi and Shepherd. Managerial attention towards stakeholders is the key to success,
and you need. You need strategy and organization commitment from stakeholders to form long-
lasting relationships.

Connection: Zott & Amit (2008) reveal the fact that a firm’s product market strategy and it’s business
model are distinct constructs that affect the value of the firm. This is in line with Choi and Shepherd,
because they also argue that you have to look to inside organizational resources to determine
exploitation. Not only the outside information. It also depicts the importance of timing with
introducing a new product, as being argued in the Choi and Shepherd article. Denoo et al. (2021)
argue the fact that costumer effects are the strongest in the early, uncertain phase. Choi and
Shepherd also discuss a lot about the importance of uncertainty, and they light out costumer
uncertainty.