The Individual-Opportunity Nexus
Chapter 9: Entrepreneurial Strategy
In this chapter, I explore the strategies by which entrepreneurs exploit new venture opportunities. I define entrepreneurial strategy as those efforts to obtain and preserve private value from the exploitation of opportunities. Entrepreneurial strategy involves two major issues: first, how does the entrepreneur develop a competitive advantage that precludes the dissipation of the opportunity to competitors once she has begun to exploit it? Second, how does the entrepreneur manage the uncertainty and information asymmetry inherent in the exploitation of an opportunity when she seeks to generate value from the opportunity? This chapter will be divided into two sections, each of which explores one of these questions. ENTREPRENEURSHIP, STRATEGY AND ENTREPRENEURIAL STRATEGY Before turning to a discussion of these two issues, however, I would like to clarify the relationship between entrepreneurship and strategic management, thereby locating entrepreneurial strategy in intellectual space. I do this given the confusion that has emerged in the entrepreneurship field about the relationship between these two areas (see Zahra and Dess, 2001 and Shane and Venkataraman, 2001 for a discussion). As Figure 9.1 indicates, entrepreneurial strategy is the intersection between all strategic actions and all activity to exploit opportunities. Entrepreneurial strategy does not consider the nonstrategic activities undertaken to discover and exploit opportunities, such as the organizing processes, the individual level characteristics that promote the decision to exploit opportunities, and the resource acquisition processes that are the subject of other chapters of this book. Similarly entrepreneurial strategy does not consider strategic action to engage in activities other...
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