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Entrepreneurial strategy

Entrepreneurial strategy. HEMBA February 18, 2012. Basic strategy categories are:. Differentiation Low cost Niche. The “First Mover Advantage”. Conventional wisdom would have us believe that it is always beneficial to be first – first in, first to market, first in class.

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Entrepreneurial strategy

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  1. Entrepreneurial strategy HEMBA February 18, 2012

  2. Basic strategy categories are: Differentiation Low cost Niche

  3. The “First Mover Advantage” • Conventional wisdom would have us believe that it is always beneficial to be first – first in, first to market, first in class. • Examples based on the “Jack Welch school of business strategy” • The advantages accorded to those who are first to market defines the concept of First Mover Advantage (FMA).

  4. The case for FMA – supply side • Creates economies of scale (economic benefits that accrue with increasing volume to both period costs and unit costs of production) • Creates learning curve gains based on cumulative units of production • Provides first-mover with control over important, possibly scarce input factors

  5. The case for FMA – demand side Four types of switching costs • Contractual costs (“sticky” accounts) • Initial investment (time & $) • Habit formation (learning period, familiarity) • Brand strength based on relevance, awareness, esteem

  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

  7. Attributes of winning strategies

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

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