1. Chapter 4 Understanding your Business Model and Developing your Strategy

2. Basic strategy categories are:
Differentiation
Low cost
Niche

4. Amazon.com’s Revenue Model
Total revenues

5. Amazon. com’s cost model
Total costs and expenses

6. Several key aspects about capturing a first mover’s advantage
You have to be first (or very early) into the market
You need to capture a large percentage of the market quickly
You need to create switching costs so the customer will stick with you
Very expensive, hard to win
First Movers rarely win
1st mover advantage exercise

7. Attributes of winning strategies
Find HBR article on the first hire

8. Entry Strategy
Benchmark
Devise Initial Market Test
Create a Platform

12. The Entrepreneurial Firm International Expansion Process

13. Means to expand globally Pros Cons
Technology Transfer
- Reduces entry costs
- Risk of losing the technology
Technology Licensing
- Generates revenue
- Conserves resources
- A lost opportunity to extend your own brand
Outsourcing
- Cost-saving
Exporting
Cheap
Easy
Additional costs in after-sales support and transportation
Moral hazard
Foreign Direct Investment (FDI)
- Physical presence
- Control of assets
- Expensive
Franchising
- Licenses an operational system
- Risk of damaging the brand name
Venture financing
- Both an enabling and an enacting mechanism
- Often leads to mergers and acquisitions with foreign companies
Mergers and acquisitions (M&A)
- Established infrastructure
- Allow a company to grow and expand quickly
- Very expensive