Professional Documents
Culture Documents
e s b
e s b
e s b
e s b
e s b
Prior knowledge and information search More knowledge ensures a more efficient search process. Search process represents a dilemma for an entrepreneur. Costs: both money and time.
Window of opportunity Period of time when the environment is favorable for entrepreneurs to exploit a particular new entry.
e s b
Error of commission: negative outcome from acting. Error of omission: negative outcome from not acting.
e Decision s b
e s b
e s b
Demand uncertainty: difficulty in estimating Potential size of the market. How fast it will grow. Key dimensions along which it will grow.
Technological uncertainty: difficulty in assessing Whether the technology will perform. Whether alternate technologies will emerge and leapfrog over current technologies
e s b
assessing whether the new product or service provides value for them.
e s b
Creating barriers to entry for competition: Building customer loyalties. Building switching costs. Protecting product uniqueness. Securing access to important sources of supply and distribution.
e s b
e s b
Focuses on producing customized products, localized business operations, and high levels of craftsmanship. Focuses on a specific group of customers. High-end of the market represents a highly profitable niche.
e s b
e s b
Imitation Strategy
e s b
downside loss for the franchisee. Me-too strategy: copying products that already exist and attempting to build an advantage through minor variations.
Might be more difficult to successfully implement than initially expected Can potentially:
Reduce the entrepreneurs costs associated with R&D. Reduce customer uncertainty over the firm. Make the new entry look legitimate from day one.
e s b
Managing Newness
Liabilities of newness arise from unique conditions: Costs in learning new tasks. Conflict arising from overlap or gaps in responsibilities. Establishing formal and informal structures of communication.
New firm need to: Pay special attention in education and training employees. Help employees develop knowledge and skills quickly. Foster activities to foster informal relationships and a functional corporate culture.
e s b
Assets of Newness
provide a clean slate, giving a learning advantage. Heightened ability to learn new knowledge in a continuously changing environment. Flexibility and ability to accommodate new knowledge.