Define strategic entrepreneurship and

MAN302 Week Five Managing innovation and fostering corporate entrepreneurship 1 Copyright Notice COPYRIGHT COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by or on behalf of Kaplan Higher Education pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice 2 Week 5 Objectives 1. Define strategic entrepreneurship and cooperative entrepreneurship 2. Identify the types of innovative activities and the relationship between each of them 3. Describe the entrepreneurial mindset and the importance it has within companies to be innovative 4. Describe how firms internally develop innovations 3 Entrepreneurship Process by which individuals, teams or organisations identify and pursue opportunities without being immediately constrained by the resources they currently control The entrepreneurial opportunities are conditions in which new good and services can satisfy a need in the market Economic engine driving many nations economies 4 Entrepreneurship Mindset Company leaders need to embrace the entrepreneurial mindset to remain competitive Person who values uncertainty in the marketplace and seeks to continuously identify opportunities with the potential to lead to important innovations Fostered and supported when knowledge is readily available throughout the firm Examples of entrepreneurial culture: Apple, Google, Alibaba, Instagram, 3M 5 Entrepreneurial Mindset The New Face of Business Watch this video about the entrepreneurial mindset. After watching, has it changed your attitude about being an employee (e.g. employee mindset)? If so, how? Jones, D. 2012 December 12. The Entrepreneurial Mindset. ONLINE: https://www.youtube.com/watch?v=Z5glndBr-cE Strategic Entrepreneurship Taking entrepreneurial actions using a strategic perspective Organisation tries to find opportunities to exploit through innovation 7 Corporate Entrepreneurship Refers to the development of new ideas and opportunities within large or established businesses, directly leading to the improvement of organisational profitability and an enhancement of competitive position or the strategic renewal of an existing business (Business Dictionary) Use or application of entrepreneurship within an established firm Critical to the survival and success of established organisations 8 Corporate Entrepreneurship 9 Reference: Birkinshaw, J. 2003 February 13. The Paradox of Corporate Entrepreneurship. Strategy + business. ONLINE: https://www.strategy-business.com/article/8276?gko=8c782 Activity Corporate entrepreneurship vs start-up entrepreneurship What are the major differences between becoming a start-up entrepreneur and doing entrepreneurship within a company with existing business? Consider career, risks, money involved, funding, resources, etc. Scott Kirsner argues that there is no such thing as an entrepreneur. What do you think are his reasons? 10 Innovation Specific function of entrepreneurship Means by which an entrepreneur either creates new wealth-producing resources or uses existing resources with enhanced potential for creating new wealth either for him/herself or the company (Peter Drucker) Generates internal change and a key outcome that firms seek and often the source of competitive success 11 Strategy and Innovation in Companies 12 IESE Business School. 2 July 2015. Strategy and Innovation in Companies: Building an Entrepreneurship Spirit. Alex Osterwalder. ONLINE https://www.youtube.com/watch?v=lXsOm2aH-7c Activity: Watch the video. Answer the questions. What, according to Osterwalder, is innovation? Does innovation cost a lot of money? Explain. What is the dual culture Osterwalder highlights? What do organisations need to focus on for its customers? What, according to Osterwalder, is innovation? Types of Innovative Activities Invention Act of creating or developing a new product or process Innovation The process of creating a commercial product from an invention Imitation The adoption of an innovation by similar firms 13 Internal Innovation Comes from Research and Development efforts within the organisation R & D may be the most critical factor in gaining and sustaining a competitive advantage in some industries Two types Incremental innovations Radical innovations 14 Incremental Innovations Build on existing knowledge bases and provide small improvements in the current product lines Cheaper, easier and faster to produce than radical innovations Involve less risk Evolutionary and linear in nature markets are well defined Product characteristics are well understood Profit margins tend to be lower Production technologies are efficient Competition based on price e.g. adding improvement to televisions 15 Incremental Innovations 16 Reference: Chopra, A. 2017 June 16. Surprising Truths about Incremental Innovations. ONLINE: ACTIVITY: Watch the video After watching the video, what are some other examples of incremental innovations that are impacting the world and business? Highlight specific companies. Radical Innovations Usually provide significant technological breakthroughs and create new knowledge Revolutionary and non-linear Use new technologies to serve newly created markets Strong potential to lead to significant growth in revenue and profits Rare due to the difficulty and risk involved in developing them Value of the technology and market opportunities highly uncertain Examples: the original personal computer, cochlear implant 17 Radical Innovations Example: Blockbuster vs Netflix 18 Reference: Kryscynski, D. 2015 January 5. Radical Innovation Strategies. ONLINE: https://youtu.be/KBMZjX5TLmQ ACTIVITY: Watch the video to 2:11 After watching the video, what are some other examples of radical innovations that have / are impacting the world and business? Highlight specific companies. Implementing Internal Innovations Need entrepreneurial mindset Have processes and structures in place to implement outcomes and commercialise the innovations Allocate appropriate resources Effectively integrate the various functions involved in the innovative process Includes cross-functional teams 19 Fostering an Innovative Environment 20 Nichols, J., 2012 December 19. Competition. Cooperation. Innovation. ONLINE: https://www.youtube.com/watch?v=sVjK1b6eGMw ACTIVITY: Watch the video What is one of the key principles that foster innovation within an organisation? Innovations Through Cooperative Strategies Most companies do not have the resources to support innovations; therefore must form strategic alliances with other firms Provide information on new business and how to exploit them Firms can use cooperative strategies to align what they believe are complimentary assets with the potential to lead future innovations 21 Innovations Through Acquisitions Acquiring a company to gain access to their innovations and to their innovative capabilities e.g. Google has constant stream of innovation-related organisations Still need to have a strategic rationale Key risk firm may substitute an ability to buy innovations for an ability to produce innovations internally 22 Googles Acquisitions 23 Do you see any theme in Googles acquisitions? Reference: Analytics India Magazine. 2017 October 15. A Complete list of Googles AI Acquisitions. ONLINE: https://www.youtube.com/watch?v=ULclqxUG_rE Summary Strategic entrepreneurship is taking entrepreneurial actions using a strategic perspective while corporate entrepreneurship refers to the development of new ideas and opportunities within large or established businesses. There are three types of innovative activities: (1) invention, (2) innovation and (3) Imitation. There are two types of internal innovations: (1) incremental innovations, and (2) radical innovations. Companies can innovate by using cooperative strategies and by acquiring companies with the potential to create innovation. 24 Review Assessment #1 25 Any Questions? 26

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