Chapter 13: Strategic Entrepreneurship 419
Thus, firms using strategic entrepreneurship integrate their actions to find opportunities,
innovate, and then implement strategies for the purpose of appropriating value from the
innovations they have developed to pursue identified opportunities.^6
We consider several topics to explain strategic entrepreneurship. First, we examine
entrepreneurship and innovation in a strategic context. Definitions of entrepreneurship,
entrepreneurial opportunities, and entrepreneurs (those who engage in entrepreneurship
to pursue entrepreneurial opportunities) are presented. We then describe international
entrepreneurship, a process through which firms take entrepreneurial actions outside of
their home market. After this discussion, the chapter shifts to descriptions of the three
ways firms innovate—internally, through cooperative strategies, and by acquiring other
companies.^7 We discuss these methods separately. Not surprisingly, most large firms use
all three methods to innovate. The chapter closes with summary comments about how
firms use strategic entrepreneurship to create value.
Before turning to the chapter’s topics, we note that a major portion of the material in
this chapter deals with entrepreneurship and innovation that takes place in established
organizations. This phenomenon is called corporate entrepreneurship, and it is the use
or application of entrepreneurship within an established firm.^8 Corporate entrepreneur-
ship is critical to the survival and success of for-profit organizations^9 as well as public
agencies.^10 Of course, innovation and entrepreneurship play a critical role in the degree of
success achieved by startup entrepreneurial ventures as well. Because of this, a significant
portion of the content examined in this chapter is equally important in both entrepre-
neurial ventures and established organizations.
13-1 Entrepreneurship and Entrepreneurial Opportunities
Entrepreneurship is the process by which individuals, teams, or organizations identify
and pursue entrepreneurial opportunities without being immediately constrained by the
resources they currently control.^11 Entrepreneurial opportunities are conditions in which
new goods or services can satisfy a need in the market. These opportunities exist because
of competitive imperfections in markets and among the factors of production used to
produce them or because they were independently developed by entrepreneurs.^12
Entrepreneurial opportunities come in many forms, such as the chance to develop and
sell a new product and the chance to sell an existing product in a new market.^13 Firms
should be receptive to pursuing entrepreneurial opportunities whenever and wherever
they may surface.
As these two definitions suggest, the essence of entrepreneurship is to identify and
exploit entrepreneurial opportunities—that is, opportunities others do not see or for
which they do not recognize the commercial potential—and manage risks appropriately
as they arise.^14 As a process, entrepreneurship results in the “creative destruction” of exist-
ing products (goods or services) or methods of producing them and replaces them with
new products and production methods.^15 Thus, firms committed to entrepreneurship
place high value on individual innovations as well as the ability to continuously innovate
across time.^16
We study entrepreneurship at the level of the individual firm. However, evidence sug-
gests that entrepreneurship is the economic engine driving many nations’ economies in
the global competitive landscape.^17 Thus, entrepreneurship and the innovation it spawns
are important for companies competing in the global economy and for countries seeking
to stimulate economic climates with the potential to enhance the living standard of their
citizens.
Corporate
entrepreneurship is
the use or application of
entrepreneurship within an
established firm.
Entrepreneurship is the
process by which individuals,
teams, or organizations
identify and pursue
entrepreneurial opportunities
without being immediately
constrained by the resources
they currently control.
Entrepreneurial
opportunities are
conditions in which new
goods or services can satisfy a
need in the market.
