Selecting and executing your Entrance Strategy

Entrance Strategies (Chapter 9)Decide on an entry strategyPlanning to learn when uncertainty is highAssessing your project as it unfoldsTug of War (Practicum) 

Week Topic Readings Industry Profile Practicum

5-Sep-06 What is Innovation? Lecture Notes 1

Chapter 1 

How Successful Companies Get Innovative

Mad Catz, Inc.

Great Innovations (videos)

12-Sep-06 Business Needs: Framing the Challenge

Lecture Notes 2

Chapter 2   

Why Business Models Matter

False Faces (perceptual reversals)

19-Sep-06 Building Blockbuster Innovations Lecture Notes 3

Chapter 3   

3M and Norton 

Slice and Dice (Attribute Maps pp. 24-35)

The Role of the Practicum

26-Sep-06 Redifferentiating Products: New Technology or New Uses

Lecture Notes 4

Chapter 4 Recognizing the Potential of an Innovation

 

Think Bubbles (Quizzing to understand the customers’ experiential context pp. 50-56)

3-Oct-06 Disruptive Innovation Lecture Notes 5

Chapter 5 The Disk Drive Industry Industrial Design Competition

10-Oct-06 Building Breakthrough Competences

Chapter 6 Dell Computer (It’s not about the computing)

The Idea Box (Dr. Fritz Zwicky’s morphological box)

17-Oct-06 Mid-term ExamVenue: Rm4333

Time: 1:30pm - 2:50pm

19-Oct-06 Selecting Your Competitive Terrain

Chapter 7 The Excavator Industry Hall of Fame (forced connection)

24-Oct-06 Assembling Your Opportunity Portfolio

Chapter 8 Motorola’s Iridium Satellite System 

Cherry Split (fractionation)

31-Oct-06 Executing Your Entrance Strategy

Chapter 9 PETCO Tug-of-War (force-field analysis)

7-Nov-06 Putting Discovery-Driven Planning to Work

Chapter 10

  Ideatoons (pattern language)

14-Nov-06 Managing Under Uncertainty Chapter 11

Innovation the Microsoft Way

Future Fruit (rationalizing future uncertainty)

21-Nov-06 Entrepreneurial Leadership Chapter 12

  Clever Trevor (talk to a stranger)

28-Nov-06 

Strategy as Discovery Chapter 13

  Circle of Opportunity (forced connection)

5-Dec-06 Course Wrap-up

7-Dec-06 Final ExamVenue: Rm4333

Time: 1:30pm - 2:50pm 

Innovation = Invention + Commercialization

O p p o r tu n ityR eg is ter

In ven tio n s

Ide a

s

Com

mercial O

pportunities

Inno va tio n

C o re C o m p etences :A ssessm ent & Investm ent

M ark et E ntra nce &C o m p etitive S tra teg y

A d ap tiveE x ecutio n

What do you do now?

You’ve: Identified and screen new innovations Figured out your target market Filled your opportunity portfolio Determined your core competences Decided where you will invest for the future

Now it’s time to get … Down in the real world. You know. Where the rubber

meets the road and the real folks are that make it go. H. Ross Perot, on Larry King Live

Where does entry strategy fit in?

What is ‘Entrance Strategy’?

Several practical areas in entrepreneurship and innovation reflect the role of the entrance strategy The first step in an entrance strategy is your ‘vision’ –

what will the company look like in 10, 15, 20 years Financing (VC’s, Banks, Stock issues) Many aspects of Venture Capital work (business

model, hiring decisions, capitalization, etc.) ‘Incubators’

Speculators and Universities love these Why?`

Adaptive Execution

Decide on an entry strategy Anticipating competitive behavior and response

Planning to learn when uncertainty is high Rather than meeting objectives set in advance Discovery Driven Planning

Assessing your project as it unfolds

Anticipating Competitor Response

Objective: Avoid debilitating competitive interaction By using speed, skill and surprise Use your imagination, innovation, creativity to

outmaneuver your competitors Rather than your scarce resources

Where are your Customers?

Lead-steer customers Opinion leaders in their industries Highly regarded by peers Customers with blogs, review or other sites

Use these customers’ enthusiasm to: Test your assumptions about attribute maps and

consumption chains Use their success with your offering to sell

others

Assessing Your first 5 sales

This is where you evaluate, learn, modify

No Sales until ‘First 5 Sales’prioritizing the first few sales

Risk LowRisk Low Risk HighRisk High

Benefit LowBenefit Low 2nd Priority(make risk of not buying higher than of buying)

Forget it!(postpone until

value or risk

Benefit HighBenefit High 1st Priority(easy sell)

3rd Priority(‘if it doesn’t work, send me the bill’)

Risk-return trade-off

Most customers will buy on a risk-return decision Small $ value = low risk Higher risk = demand for higher return (savings)

R etu r n

Risk

Customer RisksThe risk of the New

Learning (experience) curve Opportunity costs Failure or uncertain operation Employee resistance Legal and Environmental Quality & Perception

Learn from each sale

You can’t sell 10 until you sell 1 You can’t sell 100 until you sell 10; Etc.

Each of the early sales is an opportunity: To test your attribute map and consumption

chain To learn about your product and customer To innovate again and again

Tug of War

1. Write the challenge

2. Describe the best-case scenario and the worst-case scenario

3. List the conditions of the situation

4. Find the forces pushing you to the best case and those pulling you toward catastrophe

5. Pit each condition against its opposite on the continuum by specifying its push and pull powers.

Assessing Competitive Response

After you’ve assessed your first few buyers

… decide how aggressively you want to move

Competitor’s propensity to respond

3 Questions Is this area important to them? Have they been increasing their commitment here? Have they invested heavily in this area?

This is where The Porter framework

Is useful

Competitive ResponsesHere’s where the book lapses into Military jargon

Capacity HighCapacity High Capacity LowCapacity Low

Commitment LowCommitment Low Sleeping Dogs(track them)

Bystanders(monitor)

Commitment Commitment HighHigh

Combatants(Your main focus)

Skirmishers(selective in their responses due to resource limits; monitor)

Tactics

feint (fānt) noun

1. A feigned attack designed to draw defensive action away from an intended target.

2. A deceptive action calculated to divert attention from one's real purpose. See synonyms at artifice.

gam·bit (gămʹbĭt) noun

1. Games. An opening in chess in which a minor piece, or pieces, usually a pawn, is offered in exchange for a favorable position.

2. A maneuver, stratagem, or ploy, especially one used at an initial stage. 3. A remark intended to open a conversation.

on·slaught (ŏnʹslôt´, ônʹ-) noun

1. A violent attack. 2. An overwhelming outpouring: an onslaught of third-class mail.

Who will feed Fluffy?

PETCO Case on pp. 213-214

Theory & Practice

Our theory provides you an inventory of techniques and concepts required for success The necessary conditions

Practice is more complex, and requires a complete strategy (and even then is not sufficient)

Practice in Competitive Positioning

1. Identify your first few customers and learn from them2. Develop your strategy3. Identify each customer arena you intend to pursue4. Assess Corporate Support5. Assess Motivation and Capacity of the Competition6. Map Arena Attractiveness7. Map Competitive Positions of each player8. Decide on your firm’s preferred strategy9. Assess strategy of each competitor10. Map each competitor's business position against your own

Ralston +

Developing positions in seven sub-segments of the pet food business

pp. 217 on

The Competitors

Commitments

Categories and Products

Competitive Positions

Ralston vs. Mars (importance)

Ralston vs. Mars (Attractiveness)