Strategic thinking by entrepreneurs

Strategic Thinking by Entrepreneurs

Lecture by Prof. Jorge Saguinsin

at the

Ateneo Graduate School of Business

Makati Philippines

Question:

Entrepreneurs do not practice/understand

strategy?

Strategy as ordinarily understood

Small entrpereneurial businesses must

necessarily be strategic!

Three characteristics of entrepreneurial business:

Growth

Differentiation

Strategic Direction

A business that lacks any one or all of the three is a “me too” business. It is a business, but not an entrepreneurial business. It is where thousands of small enterprise are.

And is bound to die early…

Definition of Strategy:

“A concept of how objective/s are met

with available resources.”

A new enterprise does not have much

resources; resources are meager; the

entrepreneur is the RESOURCE!

The entrepreneur: the means to success!

Machiavelli

“The end justifies the means”

-The Prince

The ends and the means…

Speaking of capital:

The start up money of the entrepreneur is his savings and some money borrowed from relatives and friends.

The real capital is capito – head!

Capital – capito - Head

Process in strategic planning:

1. Allocation of resource

2. Scanning the relevant environment

3. To reach desired goals/objectives

Small amounts as start up capital

Rev. Butch Salvador started his Car Magic business with ten pesos to photo copy brochures!

Wellington Soong of the Jaguar franchise started his business with one hundred pesos to print brochures!

Toby’s Peanuts started with P3t pesos!

Starting with very little capital

Cellphones are more expensive than their

start up capital!

Objectives for the entrepreneur

To survive

To thrive

To dominate competition

To win over competitors

Military Strategy

“Strategy is practical adaptation of means

placed at general’s disposal for the attainment of object of war”

(Helmuth Karl Berhard Graf Von Molkte, 1800-189l)

Von Molkte

Military Strategy

“Tactics is the art of using troops in battle;”

“Strategy is the art of using battles to win war”

(Carl Von Clausewitz 1780- 1731)

Clausewitz

Liddell Hart – the strategy of indirect approach

Sun Tzu – The Art of War

Sun Tzu

Strategic Thinking Practices of

Entrepreneurs

Business Strategy

“Competitive strategy is about being different. It means deliberately choosing a set of activities that deliver a unique set of values…”

(Michael Porter, 1947)

Michael Porter

Value chain

Answering a set of questions

1. Where are we now?

2. Where are we going?

3. How do we get there?

(-Peter Edelman, SVP of Voith Turbo)

Interplay of C’s

CUSTOMERS

COMPANY

COMPETITORS

(-Kenichi Ohmae, 1943)

Kenichi Ohmae – Mind of the Strategist

Mental Model

“Deeply ingrained assumptions, generalizations, pictures, images, that influence how we view the world and take action…”

(Peter Senge, The Fifth Discipline, l992)

Peter Senge – The Fifth Discipline

The Five Disciplines

Vision/Point of View

Importance of well articulated sense of purpose for the business enterprise.

Purpose precedes products and other activities. The purpose dictate

how to achieve the objectives,

Vision and My Vision Board

A perfect fit:

Competency - where you are good at

Passion

Economic engine

(Jim Collins, Good to Great)

Good to Great - Jim Collins

Being goal oriented:

SMART“Begin with the end in mind”

(Stephen Covey) “Running a business is the opposite

of reading a book. You begin with end in mind “ (Harold Geneen, fmr

chairman of ITT from Managing)

Begin with the end in mind..

Managing by Harold Geneen

Business is unlike reading a book; you begin with the end and then you go back

to the beginning…

Opportunity seeking, screening, seizing

Whenever enterprises practice these, they are engaged in

strategic management!

Quotations:

“ In order to predict the future, you have to invent it” - Ronald Pineda, owner of Folded and Hung.

“ There are three types of people: those who do not know what happened, those who watch things happen, and those who make things happen.”

“Predicting rain does not matter’; building the ark does.”

“ In order to succeed, you have to know what you want” – Tom Dizon, St. Catherine Realty

Ronald Pineda – Folded and Hung

Who now says that entrepreneur do not practice/understand

strategy?

Lecture for Ateneo Entrepreneurship

Students

Presented by:

Prof Jorge Saguinsin

Profjorge.entrep@gmail .com

Acknowledgement:

Images were taken from Google images The other ideas are taken from existing

literature on strategy and entrepreneurship; Quotations are from the entrepreneur guest

of the presenter in his entrepreneurship class