Michael_A._Hitt,_R._Duane_Ireland,_Robert_E._Hosk

436 Part 3: Strategic Actions: Strategy Implementation

■ Acquisitions are another means firms use to obtain innovation.

Innovation can be acquired through direct acquisition, or firms

can learn new capabilities from an acquisition, thereby enrich-

ing their internal innovation abilities.

■ The practice of strategic entrepreneurship by all types of firms,

large and small, new and more established, creates value for

all stakeholders, especially for shareholders and customers.

Strategic entrepreneurship also contributes to the economic

development of countries.

corporate entrepreneurship 419

entrepreneurship 419

entrepreneurial opportunities 419

entrepreneurs 420

entrepreneurial mind-set 421

invention 420

innovation 420

imitation 420

international entrepreneurship 421

strategic entrepreneurship 418

1. What is strategic entrepreneurship? What is corporate entre-
   preneurship?


2. What is entrepreneurship, and what are entrepreneurial
   opportunities? Why are they important aspects of the strategic
   management process?


3. What are invention, innovation, and imitation? How are these
   concepts interrelated?


4. What is an entrepreneur, and what is an entrepreneurial
   mind-set?
   5. What is international entrepreneurship? Why is it important?
   6. How do firms develop innovations internally?
   7. How do firms use cooperative strategies to innovate and to
   have access to innovative capabilities?
   8. How does a firm acquire other companies to increase the
   number of innovations it produces and improve its capability
   to innovate?
   9. How does strategic entrepreneurship help firms create value?

KEY TERMS

REVIEW QUESTIONS

Mini-Case

An Innovation Failure at JCPenney: Its Causes and Consequences

Former CEO Ron Johnson designed and tried to implement
a new strategy for JCPenney (JCP). However, the firm’s tar-
get “middle market” customers did not respond well to the
new strategy and the innovations associated with it. In fact,
some say that Johnson’s innovations and strategy alienated
what had historically been the firm’s target customers.
Johnson came to JCP after successful stints at Target
and Apple. At Apple, he was admired for the major role
he played in developing that firm’s wildly successful
Apple Stores, which a number of analysts say brought
about “a new world order in retailing.” It was Johnson’s
ability to establish what some viewed as path-breaking
visions and to develop innovations to reach them that
appealed to JCP’s board when he was hired.
Comparing JCP to the Titanic, Johnson came to the
CEO position believing that innovation was the key to

shaking up the firm. Moreover, he reminded analysts,

employees, and others that he came to JCP to “transform”

the firm, not to marginally improve its performance.

Describing what he intended to do at JCP, Johnson said

that “in the U.S., the department store has a chance to

regain its status as the leader in style, the leader in excite-

ment. It will be a period of true innovation for this com-

p a n y.”

The essence of Johnson’s vision for JCP was twofold.

First, he eliminated the firm’s practice of marking up

prices on goods and then offering discounts, heavy pro-

motions, and coupons to entice its bargain-hunting tar-

get customers. Instead, Johnson introduced a three-tiered

pricing structure that focused on what were labelled

“everyday low prices.” To customers though, the pricing

structure was confusing and failed to convince them that