1. Lecture No: 11 ENTREPRENEURSHIP Malik Jawad Saboor Resource Person:
Assistant Professor
Department of Management Sciences
COMSATS Institute of Information Technology
Islamabad.

2. Previous Lecture Review
Entrepreneurs in Action
VIDEO ON STEVE JOBS – APPLE INC.

3. Objectives Strategic Management Competitive Advantage Core Competency
Strategic Management Process
Vision & Mission Statement
SWOT Analysis

4. A Major Shift . . .
. . . From financial capital to intellectual capital.
Human
Structural
Customer

5. Strategic Management Is crucial to building a successful business.
Involves developing a game plan to guide a company as it strives to accomplish its mission, goals , and objectives, and to keep it on its desired course.

6. Strategic Management and Competitive Advantage
Developing a strategic plan is crucial to creating a sustainable competitive advantage, the aggregation of factors that sets a company apart from its competitors and gives it a unique position in the market that is superior to its competition.
Example: Blockbuster Video

7. Key: Core Competencies
Unique set of capabilities a company develops in key areas, such as superior quality, customer service, innovation, team-building, flexibility, responsiveness, and others that allow it to vault past competitors.
They are what a company does best.
Best to rely on a natural advantage (often linked to a company’s “smallness”).
Example: Netflix

8. Key: Core Competencies
Power of Core Competence
Is the Competence hard to copy?
Is the Competence Durable?
Is the Competence really Competitively Superior?
Can the Competence be trumped by Rivals?

9. Building a Sustainable Competitive Advantage
Capabilities
Core competencies
Sustainable competitive advantage
Superior value for customers
Lessons learned
Skills

10. Strategic Management Process
Step 1. Develop a vision and translate it into a mission statement.
Step 2. Assess strengths and weaknesses.
Step 3. Scan environment for opportunities and threats.
Step 4. Identify key success factors.

11. Strategic Management Process
(continued)
Step 5. Analyze competition.
Step 6. Create goals and objectives.
Step 7. Formulate strategies.
Step 8. Translate plans into actions.
Step 9. Establish accurate controls.

12. Step 1: Develop a Vision and Create a Mission Statement
Vision – the result of an entrepreneur’s dream of something that does not exist yet and the ability to paint a compelling picture of that dream for everyone to see.
A clearly defined vision:
Provides direction
Determines decisions
Motivates people

13. Step 1: Develop a Vision and Create a Mission Statement
Addresses question: “What business are we in?”
The mission is a written expression of how the company will reflect an entrepreneur’s values, beliefs, and vision – more than just “making money.”
Serves as a “strategic compass.”

14. Step 1: Develop a Vision and Create a Mission Statement
Survey of employees: 89 percent of employees say their companies have a mission statement but…
Only 23 percent of workers believe their company’s mission statement has become a way of doing business!

15. Step 2: Assess Company Strengths and Weaknesses
Positive internal factors a company can draw on to accomplish its mission, goals, and objectives.
Weaknesses
Negative internal factors that inhibit a company’s ability to accomplish its mission, goals, and objectives.

16. Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths
Core competencies in ______.
A strong financial condition; ample financial resources to grow the business.
Strong brand name image/company reputation.
Economy of scale and/or learning and experience curve advantages over rivals.

17. Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths
Proprietary technology/superior technological skills/important patents.
Cost advantages over rivals.
Product innovation capabilities.
Proven capabilities in improving production processes.
Good supply chain management capabilities.
Good customer service capabilities.

18. Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Strengths
Better product quality relative to rivals.
Wide geographic coverage and distribution capability.
Alliances/joint ventures with other firms that provide access to valuable Technology, competencies, and/or
attractive geographic markets.

19. Step 2: Assess Company Strengths and Weaknesses
What to look for in Identifying Company’s Weaknesses
No clear strategic direction.
No well-developed or proven core competencies.
A weak balance sheet; burdened with too much debt.
Higher overall unit costs relative to key competitors.
A product/service with features and attributes that are inferior to those of rivals.

20. Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Weakness
Behind on product quality, R&D, and/or technological know-how.
Lack of management depth.
Short on financial resources to grow the business and pursue promising initiatives.

21. Step 3: Scan for Opportunities and Threats
Positive external factors the company can exploit to accomplish its mission, goals, and objectives.
Threats
Negative external factors that inhibit the firm's ability to accomplish its mission, goals, and objectives.

22. Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Opportunities
Utilizing existing company skills or technological know-how to enter new product lines or new businesses.
Falling trade barriers in attractive foreign markets.
Acquiring rival firms or companies with attractive technological expertise or capabilities.

23. Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Opportunities
Serving additional customer groups or market segments.
Expanding into new geographic markets.
Expanding the company’s product line
to meet a broader range of customer
needs.

24. Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Threats
Increasing intensity of competition among industry
Slowdowns in market growth.
Likely entry of potent new competitors.
Growing bargaining power of customers or suppliers.
A shift in buyer needs and tastes away from the industry’s product.

25. Step 3: Scan for Opportunities and Threats
What to look for in Identifying Company’s Threats
Adverse demographic changes that threaten to curtail demand for the industry’s product.
Vulnerability to unfavorable industry driving forces.
Restrictive trade policies on the part of foreign governments.
Costly new regulatory requirements.

26. Lecture Review Strategic Management Competitive Advantage
Core Competency
Strategic Management Process
Vision & Mission Statement
SWOT Analysis
Reference: Essentials of Entrepreneurship & Small Business Management, Zimmer, Scarborough &Wilson, 5th Edition