Growth Strategies and Challenges Lectures 1-4

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Questions and Answers

What is a key implication for business planning activities in the initial years?

Extensive market planning is essential.

Focus should be on establishing long-term goals.

Immediate execution without preparation is preferable.

Basic business planning activities are sufficient. (correct)

Hofstede’s cultural dimensions comprehensively address all aspects of cultural diversity.

False

Define the difference between causation and effectuation in entrepreneurial contexts.

Causation focuses on selecting means to achieve a given goal, while effectuation starts with given means to create possible effects.

The principle of 'Bird in hand' emphasizes that entrepreneurs should start with their given _______.

means Signup and view all the answers

Match the concepts with their corresponding definitions:

Causation = Selecting means to achieve a predefined goal Effectuation = Starting with given means to explore potential outcomes Bird in hand = Focusing on available resources to build ventures Affordable losses = Risk consideration based on what one can bear losing Signup and view all the answers

Which of the following is a financial driver?

Higher profit margin Signup and view all the answers

Spatially linked services focus on deepening relationships with customers.

False Signup and view all the answers

What is a primary motivation for temporal reconfiguration?

Companies are better at managing assets or performing business processes closely related to their core competencies. Signup and view all the answers

Nike sport camps are an example of leveraging a ______.

brand name Signup and view all the answers

Match the following drivers with their descriptions:

Higher profit margin = Financial driver Total cost of ownership = Marketing driver Differentiate manufacturing offerings = Strategic driver Service tends to induce repeat-sales = Marketing driver Signup and view all the answers

What is the focus of Lecture 1 in the series?

Business planning vs. effectuation strategies Signup and view all the answers

Causation strategies are primarily focused on entrepreneurial contingency.

False Signup and view all the answers

What perspective does the paper by Sapienza et al. (2006) provide on firm survival?

A capabilities perspective Signup and view all the answers

The _____ hypothesis pertains to international diversification and firm performance as discussed by Lu & Beamish (2004).

S-curve Signup and view all the answers

Match the following authors with their key contributions:

Brinckmann, J. = Business planning-performance relationship in small firms Sarasvathy, S.D. = Causation and effectuation Puranam, P. = Organic vs. non-organic growth Lu, J.W. = S-curve hypothesis in international diversification Signup and view all the answers

Which of the following best describes non-organic growth strategies?

Growth primarily through mergers and acquisitions. Signup and view all the answers

The concept of effectuation is unrelated to entrepreneurial decision-making.

False Signup and view all the answers

Identify one challenge organizations face in implementing growth strategies.

Market competition Signup and view all the answers

Which of the following papers focuses on the relationship between stakeholders and firm performance?

How applying instrumental stakeholder theory can provide sustainable competitive advantage Signup and view all the answers

Structural integration is always necessary for organizational success.

False Signup and view all the answers

What mechanism is used by firms to capture value from their innovations?

Formal and informal appropriation mechanisms Signup and view all the answers

The relationship between resources and type of diversification is discussed in the paper titled ______.

the link between resources and type of diversification: theory and evidence Signup and view all the answers

Match the following lectures with their main topics:

Lecture 4 = Growing through innovation or imitation Lecture 5 = Stakeholder- vs. shareholder-oriented growth Lecture 6 = Pyramid writing style Lecture 7 = Related vs. unrelated diversification strategies Signup and view all the answers

Which paper discusses customer preferences in self-service failure recovery?

Giving back the ‘self’ in self-service: customer preferences in self-service failure recovery Signup and view all the answers

Related and unrelated diversification strategies are discussed in the same lecture.

True Signup and view all the answers

Which authors discuss the value of self-service technology in maintaining customer retention?

Scherer, Wunderlich and Wangenheim Signup and view all the answers

Which establishment mode of choice is associated with knowledge-based resources?

Greenfield investment Signup and view all the answers

Experience-based resources are confirmed to lead to more greenfield establishment modes.

False Signup and view all the answers

What does the VRIN framework stand for?

Valuable, Rare, Inimitable, Non-substitutable Signup and view all the answers

The establishment mode choice can vary based on ________ differences.

cultural Signup and view all the answers

Match the following resource types with their corresponding establishment mode choice:

Knowledge-based resources = Greenfield investment Experience-based resources = Acquisition Signup and view all the answers

What aspect does H3b focus on in the research context?

Cultural distance decreases the effect of knowledge-based resources Signup and view all the answers

The research conducted a meta-analysis based on 31 eligible studies.

True Signup and view all the answers

What are the implications of the research for managers?

Managers should consider the firm's resources and cultural differences when choosing an establishment mode. Signup and view all the answers

Firms aim to either exploit existing resources or ________ new resources.

access Signup and view all the answers

Which of the following statements is correct regarding the research gaps identified?

Different types of resources are not adequately examined. Signup and view all the answers

Which firm size is most likely associated with resource constraints in business planning?

Small Signup and view all the answers

International diversification always improves firm performance.

False Signup and view all the answers

What are two primary factors affecting how economic rents from innovation are divided?

The strength of appropriability regimes and complementary asset positions. Signup and view all the answers

Firms must overcome certain liabilities when entering _______ markets.

foreign Signup and view all the answers

Match the following factors with their corresponding roles in international diversification:

Volume of intangible assets = Affects ability to leverage non-physical resources Volume of tangible assets = Provides physical presence in foreign markets Resource fungibility = Determines how resources can be utilized across different markets Signup and view all the answers

What is a common liability firms face when entering foreign markets?

Cultural barriers Signup and view all the answers

Name three different factors that may determine decision makers' preference for Intellectual Property Rights.

<ol> <li>Market potential 2. Competitive landscape 3. Legal framework.</li> </ol> Signup and view all the answers

The relationship between stakeholders and firm performance is unimportant in Instrumental Stakeholder Theories.

False Signup and view all the answers

What is the main argument of Brinckmann et al. regarding entrepreneurs and business planning?

Business planning positively impacts firm performance. Signup and view all the answers

Brinckmann et al. found statistical evidence for specific planning contexts that enhance firm performance.

True Signup and view all the answers

What does the 'storming the castle' metaphor imply regarding entrepreneurial behavior?

Impulsive action without a structured plan. Signup and view all the answers

According to Brinckmann et al., statistical evidence was found in two planning contexts, one of which is ________.

goal-oriented planning Signup and view all the answers

Which of the following is NOT a context hypothesis found in their study?

Crisis management planning Signup and view all the answers

Match the types of planning contexts with their descriptions:

Goal-oriented planning = Improves focus on outcomes Opportunistic planning = Adaptable to changing circumstances Resource-based planning = Focuses on internal capabilities Crisis management = Prepares for unexpected challenges Signup and view all the answers

What is the significance of the meta-analysis conducted by Brinckmann et al.?

It aggregates findings from multiple studies to identify patterns in business planning effectiveness. Signup and view all the answers

Entrepreneurs are advised to rely on a rigid business plan without considering market dynamics.

False Signup and view all the answers

What does VRIN stand for in the context of resources?

Valuable, Rare, Inimitable, Non-substitutable Signup and view all the answers

Firms always treat their stakeholders respectfully according to Instrumental Stakeholder Theory.

False Signup and view all the answers

Name one reason why stakeholder relationships can be difficult to imitate.

Uniqueness of relationships developed over time. Signup and view all the answers

In Scherer et al. (2015), the dependent variable of the conceptual model is customer __________.

retention Signup and view all the answers

Match the following stakeholders with their corresponding characteristics:

Customers = Primary users of services Employees = Internal contributors to firm operations Suppliers = Providers of necessary inputs Investors = Entities that fund the business Signup and view all the answers

Which type of diversification do firms with significant Intellectual Property typically prefer?

Related diversification Signup and view all the answers

Scherer et al. (2015) found that self-service technologies have no impact on customer retention.

False Signup and view all the answers

What is one moderator of the relationship between service proposition type and customer retention as discussed by Scherer et al. (2015)?

Service quality. Signup and view all the answers

Which argument is NOT used to explain a positive linear relationship between a firm's product and service portfolio and its overall financial performance?

Increasing coordination costs Signup and view all the answers

Amazon's expansion into logistics services is anticipated to be less profitable than its previous ventures in cloud computing.

False Signup and view all the answers

What term would Sawhney et al. (2004) use to describe Amazon's exploitation of its logistics services as a growth opportunity?

Service Opportunity Signup and view all the answers

Amazon may turn its logistics network into a __________ offering for off-Amazon merchants.

service Signup and view all the answers

Match the following categories of risk with their relevant mitigation strategies:

Market risk = Conduct thorough market research Capability risk = Invest in employee training Financial risk = Diversify revenue streams Signup and view all the answers

What is a likely outcome of Amazon's logistics service expansion?

Enhanced market share Signup and view all the answers

Companies do not face any risks when introducing new service offerings.

False Signup and view all the answers

Name one way companies mitigate financial risks associated with new service offerings.

Diversifying revenue streams Signup and view all the answers

Study Notes

Business Planning vs. Effectuation Strategies

Business planning in small firms emphasizes resource allocation for information gathering and reducing uncertainty.
Long-term planning without market feedback can hinder performance.
Adjustability in business plans is vital; entrepreneurs should prioritize affordable losses over risks.

Causation vs. Effectuation

Causation involves setting a specific goal and selecting means to achieve that effect.
Effectuation focuses on what means are available and derives possible outcomes from those means.
Effectuation principles include:
- Starting with "what do I know?" to explore potential opportunities through available means.

Establishment Mode Choice

The choice between acquisitions and greenfield investments is influenced by resource allocation.
Current research lacks comprehensive analyses across multiple types of resources, often focusing on single resource aspects.

Resource-Based View (RBV)

Unique resources confer sustainable competitive advantage and enhance long-term performance.
The VRIN framework categorizes valuable, rare, inimitable, and non-substitutable resources.
Cultural differences can shape the significance of specific resources in new environments.

Meta-Analysis Insights

Study included 31 studies analyzing over 13,000 establishment mode choices.
Confirmed findings:
- Knowledge-based resources tend to favor greenfield investments.
- Experience-based resources are more likely to result in acquisitions.
- Cultural distance negatively impacts the effectiveness of knowledge-based resources on establishment modes.

Strategic Drivers

Strategic drivers for business growth include:
- Differentiated manufacturing offerings to achieve competitive advantage.
- Greater profit margins through less sensitivity to price competition.

Service Opportunity Matrix

Connection between spatial and temporal services can enhance customer relationships.
Temporal reconfiguration in service delivery can improve efficiency and customer satisfaction.
Companies can leverage existing customer relationships by optimizing the service delivery process.

Motivations for Reconfiguration

Companies excel at managing processes related to their core competencies and achieving economies of scale for the benefit of customers.
Knowledge sharing and application from industry best practices contribute to service efficiency.

Limitations of Current Research

Limited number of studies in some resource categories may skew results.
The differentiation between full versus partial acquisitions in existing research is insufficient.
Focus on only two resource types without broader contextual considerations.

Exam Overview

Course: Growth Strategies & Organizational Challenges at Vrije Universiteit Amsterdam
Exam Date: October 26, 2023
Duration: 2 hours and 45 minutes
Type of Questions: Open and multiple-choice, totaling 7 questions
Credit Score: 90 credits equivalent to a grade of 10
Grades Release: November 9, 2023

Business Planning Impact

Entrepreneurship planning analyzed by Brinckmann et al. (2010).
"Storming the castle" refers to a spontaneous, unplanned approach by entrepreneurs.
Meta-analysis identifies two planning contexts with statistical evidence for better performance: specific industries and startup phases.
Acknowledges that business planning generates value despite resource constraints of small firms.

International Diversification

The relationship between international diversification and firm performance is non-linear.
Firms face liabilities such as cultural differences and regulatory barriers when entering foreign markets.
Key moderator factors: volume of intangible assets influences performance.

Innovation vs. Imitation

Key challenge: Innovators must capture potential from innovations effectively.
Economic rents are divided based on appropriability regimes:
- Strong regimes favor innovators; weak regimes favor asset owners.
- Freely available assets lead to more divided rents compared to tightly held assets.
Factors determining preference for Intellectual Property Rights:
- Value of exclusivity
- Cost effectiveness of protection measures
- Need for market control

Stakeholder vs. Shareholder Growth

VRIN resources (Valuable, Rare, Inimitable, Non-substitutable) defined by the Resource-Based View.
Close stakeholder relationships are valuable resources that contribute to sustainable competitive advantage.
Challenges in imitating stakeholder relationships stem from:
- Unique relationship histories
- Deep-rooted trust and reputational factors
- Organizational culture specificities
Distrust in stakeholders can arise from short-term profit focus and lack of stakeholder engagement.

Technology-Enabled Growth

Self-service technologies present viable growth strategies amidst labor market challenges.
The conceptual model emphasizes customer retention as a dependent variable influenced by service delivery mechanisms.
Proposed service theory posits that value emerges from customer self-efficacy in service experiences.
Moderating factors in service propositions include:
- Service customization
- Customer engagement strategies
Conclusions drawn from Scherer et al. (2015): Well-implemented self-service improves retention, analyzed through statistical inquiry.

Relationship between resource flexibility and investment into diversification types discussed: primarily an inverted U-shape.
Firms with significant Intellectual Property tend to invest in related diversification due to leverage of existing patents and trademarks.
Misused arguments against positive relationships include coordination costs, often overlooked in favorable conditions.

Growth through New Services

Amazon's expansion into logistics reflects strategy outlined in the Service Opportunity Matrix by Sawhney et al. (2004).
Sawhney identifies this as exploitation of service opportunity, transforming costs into profit centers.
Risk mitigation strategies for market risks include:
- Incremental service deployment
- Strategic partnerships
Companies address various risks through Design Strategies by introducing phased service rollouts that allow for feedback and adjustments.

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This quiz covers the key concepts from the first four lectures on Growth Strategies and Organizational Challenges at Vrije Universiteit Amsterdam. Test your understanding of growth strategies and the various challenges organizations face today. Ideal for students looking to reinforce their knowledge in this field.