Every new venture has its commitment towards its own goals and ideas. But just having ideas is not enough. Right direction, strategies to turn those ideas into reality is essential.
Many entrepreneurs without following any strategy flow their products or services in the market on the basis of their believes. This approach sometimes works and other times backfires.
In order to guide and help both the established and new entrepreneurs in choosing the right path, a framework called Entrepreneurial strategy compass was formed. This framework is divided into two dimensions:
- Compete or collaborate and
- Build a moat or storm a hill
The former one is related to the attitude towards incumbents while the latter one describes the attitude towards innovation. This framework further reveals four different strategies which assist an entrepreneur in deciding entrepreneurial strategy, its users, identity, technology and competitive space.
The entrepreneurial strategy compass further involves four strategies:
Intellectual property strategy: In this quadrant of the compass, the company tries to retain ownership in the market. In simple words, the company retains control of its services and products. The company collaborates with the already established incumbents. This approach can also be considered as a partner-driven approach.
Disruption strategy: This is the complete opposite of the first strategy. This strategy involves a company competing with competitors. As the name implies, disruption, this strategy aims to shake up the market. Disruption literally does not mean chaos but it means the entrepreneur aims at not poking the beast and provoking strong feedback.
The value chain strategy: This strategy involves competition but not an aggressive one. For example, Foxconn, the Chinese electronics manufacturer can bring new products from Apple in the market. So, such companies make their identity through competence than aggressive competition. In simple words, by using this strategy, the company becomes a new member in the market which works to eke out its share.
The architectural strategy: This strategy probably is risky and almost out of reach for many entrepreneurs and companies. This is because this strategy allows the start-ups to both compete and control but it is not possible all at once for new companies. The companies design a new chain out of an existing one and then control the market. For example, the social media industry perfectly suits under this arm of the compass.
For successful entrepreneurship, one should not completely depend on the above strategies. The strategy does not help in eliminating uncertainties that may arise but yes it surely gives a crystal clear framework of solutions to the problems.