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Global Innovation Management Toolbox Workout #6. GOAL Define an entry strategy METHOD Building up a vision, business plan, milestones and identifying your customers and combatants. Setup for your task. Pick a specific consumer product:
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Global Innovation Management Toolbox Workout #6
GOAL Define an entry strategy METHOD Building up a vision, business plan, milestones and identifying your customers and combatants
Setup for your task • Pick a specific consumer product: • Choose a product where you have a thorough knowledge of the market and competitors • This is likely to be something that would be involved in a sport, hobby, job or other personal interest • Quickly think through: • Why customers buy this product (be honest) • How customers buy this product (i.e., the consumption chain) • Complementary products required to market this product • Competences your firm needs to compete
Setup for your task (2) • Assume your company is going to produce its own brand of the product you have chosen • Formulate an entrance strategy which … • Anticipates competitive behavior and response • Plans to learn when uncertainty is high • Make sure your strategy assesses your project as it unfolds rather than meeting objectives set in advance
Don’t forget… • You can’t be sure that your competitors will react as you expect • You can’t be sure that technology, markets, etc. will pan out as you hope (or promise) • You don’t want to be responsible for meeting ‘the numbers’ where you have extreme uncertainty
Your 1st task: State your vision • The first step in creating an entrance strategy is stating your vision • Your vision is your assessment of what the competitive future will look like – ie: • What will this market look like in 6 months, 1 year, 5 years, 10 years? • What will this product look like in 6 months, 1 year, 5 years, 10 years?
Your 2nd task: Describe the business model Your business model should • Tell the story of how this product becomes a profitable business • Set target revenue and cost numbers for 6 months, 1 year, 5 years and 10 years • State how your business / product is different from everyone else’s
Your 3rd task List your major assumptions • In any highly uncertain venture, you make considerable numbers of assumptions: • List what assumptions you will make about your market • Explain how you will test your assumptions • Your business plan should be organized around converting the maximum number of assumptions to knowledge at minimumcost
Your 4th task: Specify your major milestones Definition of a milestone • Milestones are points in time at which products are delivered and key assumptions are tested • Usually these are events, e.g. complete design • They should be sequenced to minimize cash burn and corporate expectations while you are learning • No milestone should occur without triggering a test of assumptions Task • Specify your milestones (ie deliverables) in 6 months, 1 year, 5 years and 10 years
Past is indicator of Future Future is Volatile Hint • Remember that sustainability is industry-specific: different industries display different rates of change in the market
Your 5th task: Choose your first three customers • Specify your first three customers – your lead-steer customers. They should be: • Opinion leaders in their industries • Highly regarded by peers • Customers with blogs, reviews or other interactive site feedback • These will help you to test your assumptions about attribute maps and consumption chains
Your 6th task: Identify your combatants • Identify your combatants (or sleeping dogs, bystanders and skirmishers) by name • State why you categorize them as such • (Usually this will be because of their market power, the coreness of the product to their capabilities, and their interest in this market)
Your 7th task Choose your entry tactics • Choose one (only) of the tactics from the following list (more detailed information on each is given on the next slide): • Offensive • Defensive • Deception • Explain why this is the best tactic for you and your product to enter the market
Quick revision session:Entry tactics Offensive tactics • Rapid dominance • Planned attack / frontal assault • Flanking maneuver • Pincer movement • Double envelopment • Attrition warfare • Interdiction / control of lines of communication and supply • Preemptive attack • Raiding • Divide and conquer • Guerrilla warfare Defensive tactics • Mutual support • Scorched earth policy • Booby traps • Center peel • Trench warfare • Hedgehog defense Deception tactics • Stealth and camouflage • Disinformation • Feint • Force multiplication
Hints • Avoid debilitating competitive interaction by using speed, skill and surprise • Use your imagination, innovation and creativity to outmaneuver your competitors, rather than your scarce resources • Assets should be bought only as a last resort • Fixed commitments should be kept variable by paying per use, or by subcontracting
Presentation • Prepare a 5- to 10-minute presentation of your conclusions on tasks 1 to 7. • Describe your product, its current competitors, its history and its future on 1 slide • Present a maximum of 1-2 handwritten slides per task • For the sake of time, do not include anything else