Entrepreneurial Strategies 117New Product or Service. A new product or service is one of the most potent entry
wedges. Truly new products and services are relatively rare. If they include a new tech-
nology as well, they may be hard to imitate. Typically, new products have a lower failure
rate than new services, primarily because most service organizations face lower entry
barriers. Firms that do use the new-service wedge are likely to offer or introduce a relat-
ed product if they gain a foothold in the industry. Ventures that initially offer a new
product sometimes follow up with a related service, but this is less common.^9
The new product or new service wedge is what Drucker called the “being first with
the most” strategy.
10
This strategy is used to achieve a permanent leadership position
either within an existing industry or by creating a new industry. Success with this strat-
egy requires a concentrated effort at being comprehensive and innovative. “Being first,”
like the first-mover advantage, gives the firm a head start and possibly an insur-
mountable lead in market share, in low-cost manufacture and supply, and in public
awareness and recognition. “With the most” requires that the product or service be
comprehensive. If it is missing something (for example, service, warranty, delivery, or
functional components that customers require), the door is left open for competitors.
This is the high-risk, high-reward entry wedge. Table 4.2 below illustrates some of the
types of new products that have been introduced in recent times and are considered
award winners. (Students might want to research these companies to see what particu-
lar uniqueness they have brought to market.)
Parallel Competition. Parallel competition is a “me too” strategy that introduces com-
petitive duplications into the market. These duplications are parallel, not identical, to
existing products or services. They represent an attempt to fill a niche, a small hole in
the market. This can be done with a small innovation or a variation in an already well-
accepted and well-understood product line or service system. An entrepreneur who
notes that a firm’s current customers are unhappy and who conceives of a strategy to
make them happy would be entering with a parallel wedge strategy. Marginal firms
always risk being replaced by others that do basically the same things but do them bet-
ter.
Most retailing start-ups, for example, enter with the parallel competition wedge. The
difference between one retail operation and another might only be location or minor
variations in merchandising and marketing. The typical retail store carries the same or
similar products from the same suppliers and charges approximately the same markups
as its competitors. This type of entry is fairly easy, because entry barriers are low. Firms
of this type can produce stable income and profits over a long time if they possess some
distinctive competence. More likely, though, these firms are low-sales, low-profit opera-
tions. For the entrepreneur, they are alternatives to other jobs and replace income from
other employment. Without a distinctive competence, these small retailers quickly
become marginal and risk being replaced by another firm using the parallel wedge strat-
egy.
However, if used with creativity and vision, the parallel wedge strategy can lead to
superior payoffs. Drucker calls this form of the parallel strategy creative imitation.^11
Creative imitation combines the common business configuration of the competition
(the imitation part) with a new twist or variation (the creative part). Two types of com-