Entrepreneurial Strategy: Generating and Exploiting New Entries
One of the essential acts of entrepreneurship is new entry—entry based on a new product, a new market, and/or a new organization. Entrepreneurial strategies represent the set of decisions, actions, and reactions that first generate, and then exploit over time, a new entry in a way that maximizes the benefits of newness and minimizes its costs. The creation of resource bundles is the basis for new entry opportunities. A resource bundle is created from the entrepreneur's market knowledge, technological knowledge, and other resources. The new entry has the potential of being a source of sustained superior firm performance if the resource bundle underlying the new entry is valuable, rare, and difficult for others to imitate. Therefore, those wishing to generate an innovation need to look to the unique experiences and knowledge within themselves and their team.
Having created a new resource combination, the entrepreneur needs to determine whether it is in fact valuable, rare, and inimitable by assessing whether this new product and/or new market is sufficiently attractive to be worth exploiting and then acting on that decision. The decision to exploit or not to exploit the new entry opportunity depends on whether the entrepreneur has what she or he believes to be sufficient information to make a decision and on whether the window is still open for this new entry opportunity. The entrepreneur's determination of sufficient information depends on the stock of information and the entrepreneur's level of comfort in making such a decision without perfect information.
Successful new entry requires that the entrepreneur's firm have an advantage over competitors. Entrepreneurs often claim that their competitive advantage arises from being first to market. Being first can result in a number of advantages that can…...