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Types and mechanisms of entrepreneurial learning.

Street knowledge and university knowledge. Learn because there is a necessity or just a motivation to improve abilities. Tacit knowledge (can’t be transferred to anyone) - the ability to speak a language, use algebra, or design and use complex equipment requires all sorts of knowledge that is not always known explicitly. Learn inside the organization with the organization. Most of the largest computer companies started in small garages, they didn’t know how to be a corporation, they learned in the process.

Types of knowledge: behavioral (based on trial and error, by repeating successful behaviors and avoiding the failed ones), cognitive (knowledge that firms enquire to improve creativity, opportunity recognition and etc), situative/action (individuals situated experience with others).

66. Benefits and drawbacks of family engagement in business.

Benefits: One of the main benefits of a family business is that owners can feel more assurance by working with people they trust. Family members are more likely to sustain loyalty and dedication to the success of the company. Scheduling may be easier, since you'll be more in tune with potential conflicts. There are also usually more leniencies throughout the company when mistakes occur between family members. People can also work for free and understand lower incomes.

Drawbacks: Business owners may promote other family members, even if they are not qualified for the position. A family member may also feel a sense of entitlement and take advantage of lax company policies. Problems with wealth distribution, conflicts. Someone may abuse loyalty- it will lead to slump in productivity. Problems with ownership. Business issues may destroy personal relationships between family members.

67. Dimensions and measures of intrapreneurship.

Forms of Intrapreneurship; Creation of a new entity within an existing organization; Creation of a new entity outside of an existing organization; Transformation of an existing organization

Dimensions: Proactivity (an active seeking to create value); Creativity (ability to conjure new ideas), Invention (putting together something new); Innovation (successful implementation of creations and inventions); Generation (deriving profits from innovation).

Example: 3M (you may develop an innovative solution and receive the major part of revenues generated by that solution).

68. Sources of competitive advantage.

External sources: 1) Change in customer demand; 2) Change in prices; 3) Technological change. Some firms are faster and more effective in exploiting change.

Internal sources: greater creativity and capability.

Talk about sustainability. Those who are one step ahead in terms of environmental legislation may improve their market positions if law changes.

Cost Advantage, Differentiation advantage.

69. Michael Porter’s five competitive forces that shape the strategy.

Five forces that determine the competitive intensity and therefore attractiveness of a market.



- The threat of the entry of new competitors (barriers to entry, brand

equity, sunk costs, customer loyalty, access to distribution channels)

 

- The intensity of competitive rivalry (competitive advantage through innovations, strategy, level of advertisements)

 

- The threat of substitute products or services (propensity to substitute, demand elasticity, sustainable products, environmental awareness)

 

- The bargaining power of customers (buyers) - Degree of dependency upon existing channels of distribution, Buyer volume, info, price sensibility

 

- The bargaining power of suppliers (number of suppliers, their conditions, substitutes, distribution channels, suppliers competition).

70. Resource-based approach to strategy.

According to that approach each company is unique and the results come from the resources and capabilities of a particular company, not from the nature of the industry they operate in.

Why: 1) resources are different; 2) unique capabilities; 3) difference in competitive advantages.

Criticism: Companies usually follow the leader and imitate its strategies. Weak companies don't enter attractive strategies, they should have enough resources to sustain before they can get eaten up by competitors.

71. SWOT & PEST analyses: their components and role for strategy.

Strengths (advantages), Weaknesses (relative to other firms), Opportunities (external chances to make greater sales), and Threats (environment can cause troubles for business) involved in a project or in a business venture.

SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. Examples include: non-profit organizations, governmental units, and individuals.

When: Environmental scanning, analysis of existing strategies, strategic issues, development, establishment, preparation, monitoring.

PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.

Political (degree a government intervenes in the economy, taxes, laws, tariffs). Economic (GDP growth, inflation rate, exchange rate). Social (cultural aspects, traditions, religions). Technological (R&D, automation). Environmental (climate change and all the consequential reactions). Legal (consumer law, antitrust law, health and safety etc). When carrying out a PEST analysis it is important to show how and how much the factors that the firm picks out influence the nature of competition. When analyzing PEST factors in the present, it is required to make it plain why the present is different from the past, and how the industry may need to change.

72. Strategic intent: mission, vision and goals.

A mission statement is a formal, short, written statement of the purpose of a company or organization. The mission statement should guide the actions of the organization, spell out its overall goal, provide a sense of direction, and guide decision-making. (reasons, key markets, product benefits, attitude to employees and community). Mission describes what the company does to achieve its Vision.

Vision: Defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. Vision is a long-term view, sometimes describing how the organization would like the world to be in which it operates. For example, a charity working with the poor might have a vision statement which reads "A World without Poverty."

Goals: short-term, long-term. What is the focus of the company? A goal is an observable and measurable end result having one or more objectives to be achieved within a more or less fixed timeframe.

73. Balanced scorecard & its use for strategy.

Managers uses these to control current performance of the company, to check whether it is achieving its strategic objectives. It includes financial and nonfinancial measures. Example: the system in investment banking, where employees with lowest rankings leave the company to make the way for new talented personnel.

It’s like transforming company vision into operational goals. Monitor business performance against strategic goals. The balance scorecard measures four aspects of organization: 1) learns growth perspective; 2) business process perspective; 3) customer satisfaction; 4) financial health.

Perspective, Objective, Measure, Target, Initiative

74. How to avoid destructive price wars?

Define the market you are in. If it’s a competitive market, price wars won’t have any result. In monopolistic competition it is more difficult. In Oligopoly models kinked demand curve defines that companies won’t be increasing their prices above the kinked point (where demand is less elastic) and will follow the one who sets the price below the kinked point.

Avoiding price wars:

Be Careful about misreading your competitors’ actions. The results can be a downward spiral in prices that ruins profitability.

Selectively communicate your strategy.

Have good information about your customer’s level of price sensitivity

Be consistent in your response and move quickly

Manage your company’s capacity carefully

75. Operational excellence: benchmarking & reengineering, cost cutting and downsizing.

Operational excellence is the concentration on continuous improvements of business operations. The final goal is to undertake only those operations that create value for the consumer. Effectiveness and efficiency.

Benchmarking is a tool to achieve operational excellence. For instance, in Japan government defines the most effective enterprise in a particular industry and mandates other companies to catch up with the leader. Internal (between departments), External.

Reengineering - improvements of something. Interesting - the bulb was developed long before energy plants, transportation wires and lamps were created. But the benefits of innovations outweighed costs of infrastructure and the money were provided.

Cost Cutting - continuous process of looking for opportunities reviewing own business processes. More waste - higher purchases. Waste is always associated with a loss of money - disposal costs, costs of climate change and et. It is better to eradicate reasons for these problems than deal with them later on.

Downsizing: reduction in the number of employees and sometimes companies scope in terms of products produced or market served. It immediately decreases operating costs.

76. Strategic mistakes and what can we learn from them.

The key to business success is to look carefully at your mistakes – and stop repeating them. But extraordinarily, some companies never seem to learn. They pay too much for acquisitions or pursue strategies that have been overtaken by the market. Many business owners have no exit strategy. Some start out in a niche and then expand and end up do nothing well.

1. No strategy; 2. Incongruence; 3. Getting tactics mixed up with strategy; 4. Sticking to the strategy when it's not working. 5. Not planning for problems; 6.Doing to much; 7. No exit strategy. 8. No documentation - no relationships, agreements; 9. Poor employee choice; 10. Work in the business, not on it.


Date: 2015-02-03; view: 633


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