Strategic Entrepreneurship is integration of two disciplines: Entrepreneurship (Identifying opportunities through Innovation) and Strategic Management (Manage the firm’s resources/innovation efforts). So we can define strategic entrepreneurship as a firm’s efforts to exploit its today’s competitive advantages while exploring for the innovations that will be the foundation of tomorrow’s competitive advantages.
Identifying opportunities to exploit through innovation is entrepreneurship dimension of strategic entrepreneurship, while determining the best way to manage the firm’s innovation efforts is the strategic dimension.
Entrepreneur is a word derived from French language which means: “One who undertakes” and entrepreneurial capabilities are conditions in which new good or services can be launched to satisfy a need in the market. These opportunities exist because of the competitive imperfections in markets and among the factors of production and to produce them and when information about these imperfections is distributed asymmetrically among individuals. As a process, entrepreneurship results in creative destruction of existing products or methods of producing them and replaces them with new products and production method.
Peter Ducker said that “Innovation is the specific function of entrepreneurship, whether in an examining business, a public service institution, or a new venture started by a lone individual.” Moreover, it is the means by which the entrepreneur either creates new wealth producing resources or uses existing resources for creating wealth. Innovation is the key outcome firms seek through entrepreneurship and is often the source of competitive success in the dynamic environment.
The key to success of entrepreneurship is innovation and acceptance in the market. Innovation is the process of creating a commercial product from an invention that brings something new into being or into use. A firm may go for strategic entrepreneurship due to many reasons like to improve the organizational profitability or to increase its competitive position or renewal of existing businesses. When individuals within well established organizations go for it, it’s called as corporate entrepreneurs. Corporate entrepreneurship is the concept of use and application of innovation and entrepreneurship within established organisations. An important part of entrepreneurship, corporate entrepreneurship increasingly is thought to be linked to survival and success of established organisations.
Its found that inside board directors with equity positions favor internal innovation while outside directors with equity positions prefer acquired innovation. Also, in the global competitive landscape, then long term success of new ventures and established firms is a function of the ability to meld entrepreneurship with strategic management.
Creating Value through Strategic Entrepreneurship
Being effective in identifying opportunities is the thumb rule for success in entrepreneurial activities. Flexible and willing to take risks is also needed for creating value through strategic entrepreneurship. As compared to large established firms, newer organizations are more effective in the identification of entrepreneurial opportunities. As a result entrepreneurial ventures produce more radical and innovative products than their well established. But conversely, larger and well maintained organizations because of the resources have an edge in this context. In today’s competitive world, firms not only have to make an upper hand in opportunities, but they also need to do this while achieving competitive advantage and sustaining that. The newer entrepreneurial firms need to learn how to identify opportunity-seeking skill. The firms need to be entrepreneurial along with the managers and employees, by developing a entrepreneurial mind set amongst the employees.
A firm practicing strategic entrepreneurship also contributes to country’s economic development. Certain countries have changed the institutional rule for operating in the county, owing to the reason of its economic motives and individual motive.