What is a broad scope strategy?

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b.A narrow-scope strategy requires theentrepreneur to be certain about the market.c.A broad-scope strategy opens the firm up tomany different “fronts” of competition.d.A narrow-scope strategy reduces somecompetition-related risks but increases the risks associated withmarket uncertainties.e.A broad-scope strategy reduces risks frommarket uncertainties, but increases exposure to competition.f.When the risk of competition is great andmarket uncertainties are minimal, a narrow-scope strategy is moreeffective at reducing risk.g.But if new entry involves creation of a new market, a broad-scopestrategy reduces the major risk–uncertainties over customerpreferences.C.Imitation Strategies1.Why Do It?a.Imitation strategyis another strategy forminimizing risk.b.In this strategy, a successful new entry doesnot need to be valuable, rare, and inimitable on every aspect.c.Imitation of others’ practices that are peripheralto the competitive advantage of the firm offers a number ofadvantages.d.Entrepreneurs may simply find it easier toimitate the practices of a successful firm than conduct a systematicand expensive search.e.Imitating some of the practices of establishedsuccessful firms can help the entrepreneur develop the skillsnecessary to be successful in the industry.f.Imitationalsoprovidesorganizationallegitimacy and is a means of gaining status and prestige.2.Types of Imitation Strategies.

a.Franchising is a type of new entry that focuseson imitation to reduce the risk of downside loss for the franchisee.i.A franchisee gets the use of a “provenformula” for new entry from a franchisor.ii.The entrepreneur benefits from anestablished market demand, intellectual property-protected nameand products, and access to expertise.iii.The text uses the example of aMcDonald’s franchise model.b.New entry can involve copying products thatalready exist and attempting to build an advantage through minorvariations: a“me-too” strategy.i.Variations can take the form of makingminor changes to the product, taking an existing product to a newmarket, or delivering the product to customers in a different way.ii.Ice cream shops are an example of a“me-too”imitation strategy.iii.A“me-too”imitation strategy might bedifficult to implement successfully.c.An imitation strategy has the potential to:

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1.The creation of a new organization offers someliabilities of newness.

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2.If these liabilities can be overcome, then the entrepreneur can benefit fromsomeassets of newness, the advantages that a new organization hasover a mature one.a.Established routines, systems, and processescan be a liability when the firm needs to adapt to changes in itsenvironment.

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