Strategic Entrepreneurship Growth
Strategic Entrepreneurship Growth
Strategic Entrepreneurship Growth
Contents
Designing the business model:..............................................................................................................2
Balancing the focus: effectuation (entrepreneurial) vs causal (managerial)..........................................3
Application to the Ansoff Product-Market Matrix:............................................................................3
Venture development stages:...............................................................................................................4
Stage 1: New venture development:.................................................................................................4
Stage 2: Start-up activities:................................................................................................................4
Stage 3: Growth Stage:......................................................................................................................4
Stage 4: Business Stabilisation:..........................................................................................................5
Stage 5: Innovation or decline...........................................................................................................5
Key management issues encountered during the growth stage:.......................................................5
Confronting the growth wall:................................................................................................................5
Strategic sustainable development.......................................................................................................5
Strategic backcasting.............................................................................................................................5
Designing the business model:
Entrepreneurial businesses must be able to evolve and transform to match the pace
of change.
The business must be able to build and maintain two sets of capabilities:
1. Dynamic capabilities – concerned with strategic development of the business
to innovate and differentiate from competitors and adapt to changing
competitive landscapes.
2. Operational capabilities – These attend to management of routine operations.
An entrepreneur must design the business model that provides the blueprint for the
acquisition and growth of capabilities to deliver a clear value proposition to the
market at a cost and revenue equation that ensures the company’s survival and
ongoing stakeholder support.
Business model is the design of organisational structures to enact a business
opportunity. Needs to consider:
1. Economic perspective: concerned with logic of profit from producing/delivering
the good.
2. Operational perspective: Considers value creating architecture – set of
sequences, processes and activities that the business does.
3. Strategic positioning: views company’s market positioning interactions.
At the heart of a good business model is the value proposition – centerpiece of
designing business growth strategies.
- Effectual logic has its place in the diversification quadrant –in this area there
are no known products or known markets. (Imagination, vision, confidence
etc. is necessary)
- This is where entrepreneurs can imagine new possibilities (ends) and arrange
resources (means) to achieve these ends.
- In the Product Development and Market Extension areas, constraints exist –
the focus shifts to choosing among existing product and market options (Or
choosing and crafting different means).
- The objective end is fixed to either move more of the known product into an
unknown market or create new products to increase revenues from the
existing market.
- In market penetration quadrant both the products and markets are known.
- The objective is to maximise sales within the combination of fixed means
(product and market) and achieve a known end (higher revenues, sales and
profits).
- These two types of reasoning need to be balanced for the business to
succeed.
Strategic backcasting
- Looking back from the future.
- Approaches challenges from the opposite direction.
- The future desired conditions are envisioned then steps are defined to attain
those conditions.
- Examine several future scenarios.
- If we want to arrive at scenario A, what trends would need to change to get
there?