being strategic and entrepreneurial: building capabilities and exploiting opportunities in a dynamic...
TRANSCRIPT
Michael A. Hitt
July 2012
Being Strategic and Entrepreneurial: Building Capabilities and Exploiting
Opportunities in a Dynamic Competitive Landscape
Competitive LandscapeEvery morning in Africa, a gazelle wakes upIt knows that it must run faster than the fastest lion or it
will be killedEvery morning a lion wakes upIt knows that it must outrun the slowest gazelle or it will
starve to deathIt doesn’t matter if you are a lion or gazelle, when the
sun comes up, you had better start running
(Friedman (2005)
The New Competitive Landscape
Extreme Emphasis on Price, Quality and Satisfaction
Blurring of Industry Boundaries
Hypercompetitive Markets
Global Economic and Political Discontinuities and Disequilibrium
Increasing Importance of Innovation and Continuous Learning
Lack of Entrepreneurial Mindset
Polaroid: Leader in “Instant Photography”
Blockbuster: Unchallenged Leader in Video Rental
Netflix and Redbox Satellite Rentals Stock Value Fell to Near Zero Filed Chapter 11
At One Time, Member of Top 50 Firms Digital Technology Disrupted the Industry Bankrupt; Dissolved Business
Lack of Entrepreneurial Mindset (cont’d)
Barnes & Noble: Unparalleled Leader in Large Bookstore Retail Sales
Amazon.com Electronic Books Major Reductions in Stock Price The Company Was Offered for Sale Microsoft Invested $300 million (Nook)
Lack of Strategic Mindset
Priceline.comStarted with a Unique Reverse-Auction System (patented)
Allowing the Customer to Name the Price and Companies Can Respond to Provide if Desired
In First Six Weeks, It Sold More than 10,000 Airline Tickets
Total Revenues Grew to Over $1 billion within 4 years of Operation
Lack of Strategic Mindset (cont’d)
Competitors:Microsoft Expedia—Almost Perfect Imitation of Priceline’s patented Reverse Auction System
Travelocity.com--Represents 420 Airlines Operated by SABRE
Hotwire—Alliance of Six Major Airlines
Orbitz.com—(Owned by American, Continental, Delta, Northwest and United)
Strategic and Entrepreneurial Leader
Strategic Leadership is the “ability to anticipate, envision, maintain flexibility, think strategically, and entrepreneurially and work with others to initiate changes that create a viable future for the organization.”
Vision
Continuous Development of Capabilities
Emphasizing Innovation
Building and Sustaining a Competitive Advantage
A Good Vision
Ambitious/Challenging
Inspirational (Enthusiasm)
Reflects Uniqueness/Distinctiveness
Emphasizes Excellence
Clear/Unambiguous
Building and Using Capabilities
Resource Portfolio
Building Capabilities
Leveraging the Capabilities for Competitive Advantage
Gaining a Competitive Advantage
Competitive Advantage: Providing Value to Customers that Is Superior to that Provided by Competitors
Having Capabilities that Are:
Valuable
Rare
Difficult to Imitate
Nonsubstitutable
Building Capabilities
To Gain a Competitive Advantage, Capabilities Must Have the Following Characteristics
Valuable
Rare
To Sustain a Competitive Advantage, Capabilities Must Have the Following Additional Characteristics
Difficult to Imitate
Nonsubstitutable
Building and Leveraging Capabilities
Using the Portfolio of ResourcesEnriching Current CapabilitiesDeveloping New Capabilities
Exploit Current ProductsInnovate and Enter New Markets
Leveraging Capabilities for Advantage
Managing Strategically
Know Your Firm’s Strengths and Acknowledge Its Weaknesses
Know Your Competitors Well
Continuously Seek to Gain and Maintain a Competitive Advantage
Act Entrepreneurially
Identify/Create New Business Opportunities and Exploit Them
Acting Entrepreneurially
Build Flexibility into Processes and SystemsOpen to ChangeRespond Rapidly
Be Proactive instead of Reactive
Be Creative and Promote Innovation
Seek External Input
Focus on Creating New Products and Markets While Simultaneously Exploiting Existing Ones
Identifying Opportunities
Entrepreneurial Alertness: Recognizing Opportunities that Others Do Not See
Competitive Advantage
Can Firms that Have Fewer Resources Win Competitive Battles against
Firms with More Resources?
If we know ourselves and our enemy, we
will win
(Sun Tzu, The Art of War)
Conclusion
“Champions do not become champions when they win the event, but in the hours, weeks, months and years they spend preparing for it. The victorious performance itself is merely the demonstration of their championship character.”
T. Alan Armstrong