1. The Strategic Management Process

2. Strategic Entrepreneurship
Entrepreneurship is concerned with:
The discovery of profitable opportunities
The exploitation of profitable opportunities
Entrepreneurship: the process by which individuals, teams, or organizations identify and pursue entrepreneurial opportunities without the immediate constraint of the resources they currently control
Purpose of entrepreneurship:
To create wealth or value

3. Strategic Entrepreneurship
Individuals, acting independently or as part of an organization, who perceive an entrepreneurial opportunity and then take risks to develop an innovation to exploit it
Entrepreneurial Mind-set
Person who values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to important innovations
Firms that foster entrepreneurship are:
Willing to take risks
Committed to innovation
Proactive in creating opportunities rather than waiting to respond to opportunities created by others

4. Strategic Entrepreneurship
Strategic entrepreneurship: taking entrepreneurial actions through a strategic perspective
Entrepreneurship dimension: identifying opportunities in the external environment to exploit through innovations
Strategic dimension: determining the best way to manage the firm’s innovation efforts
Corporate entrepreneurship: the use or application of entrepreneurship within an established firm
Critical to the survival and success of established organizations as well as startup entrepreneurial ventures (or “startups”)
Three ways organizations can innovate
Internally
By cooperating (e.g., strategic alliances)
Through acquisitions

5. Strategic Entrepreneurship
Firms engage in three types of innovative activities
Invention
The act of creating or developing a new product or process
Brings something new into being
Technical criteria determine the success of an invention
Innovation
Process of creating a commercial product from an invention
Brings something new into use
Commercial criteria determine the success of an innovation
Imitation
Adoption of an innovation by similar firms
Results of imitation
Product or process standardization
Products made with fewer features
Products offered at lower prices

6. Internal Innovation
With internal innovation firms take deliberate efforts to develop inventions and innovations within the organization
Often called internal corporate venturing or intrapreneurship
Firm internal innovation is reflected in efforts in research and development (R&D) and patents
Firms innovate internally in two ways
Autonomous strategic behavior
Induced strategic behavior
Firms produce two major types of internal innovations
Incremental innovations
Radical innovations

7. Internal Innovation Autonomous strategic behavior
A bottom up process in which product champions pursue new ideas, often through a political process, by means of which they develop and coordinate the commercialization of a new good or service until it achieves success in the marketplace
Can facilitate incremental and radical innovations
Primarily - Radical Innovation
Induced strategic behavior
A top down process whereby the firm’s current strategy and structure foster innovations that are closely associated with the current strategy and structure
Primarily - Incremental Innovation

8. Internal Innovation Incremental Innovation Radical Innovation
Is evolutionary and linear in nature
Most innovations are incremental
Build on existing knowledge bases and provide small improvements in current product lines/processes
Primarily - induced strategic behavior
Radical Innovation
Is revolutionary and nonlinear in nature
Is rare because of difficulty and risk involved
Provide significant technological breakthroughs and creates new knowledge
Requires creativity
Use new technologies to serve newly created markets
Primarily - autonomous strategic behavior

9. Innovation Through Cooperative Strategies
Most firms lack the breadth and depth of resources in their R&D activities to continually develop innovations and remain competitive
To successfully develop and commercialize inventions, firms may need to cooperate and integrate knowledge and resources
Entrepreneurial new venture firms may need investment capital and distribution capabilities
More established companies may need new technological knowledge possessed by newer entrepreneurial firms
To innovate via cooperative relationships, firms must share their knowledge and skills – strategic alliances and joint ventures allow this to occur

10. Innovation Through Acquisitions
Firms can acquire companies to gain access to new innovations and innovative capabilities
This can rapidly extend the firm’s product line and increase the firm’s revenues
KEY RISK: a firm may substitute its ability to buy innovations for its ability to produce innovations internally and thus
Lose its intensity in R&D efforts
Lose its ability to produce patents
Research demonstrates that subsequent to acquisitions, firms introduce fewer new products into the market

11. Process Management Tools
The use of process management tools can improve an organization’s strategy implementation efforts.
Each tool has to do with making improvements to how a firm performs a business process or series of activities.
Common process improvement tools include:
Best Practices - a technique for performing an activity or business process that has been shown to consistently deliver superior results compared to other methods
Benchmarking - a tool for improving a company’s own internal activities that is based on learning how other companies perform them and borrowing their best practices

12. Process Management Tools
Common process improvement tools (cont.):
Reengineering - involves radically redesigning and streamlining how an activity is performed with the intent of achieving dramatic improvements in performance
Total Quality Management - a philosophy of managing a set of business practices that emphasizes continuously improving the performance of every task and value chain activity
Six Sigma Quality Programs - utilize advance statistical methods to improve quality by reducing defects and variability in the performance of business processes
Lean Manufacturing - a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination; centered on preserving value with less work