Chapter Summary
Every new venture has a strategy or approach to achieve its goals. This strategy is in response to its plan to implement a solution to an important problem or opportunity. With sound vision and mission statements and an initial business model, the entrepreneur examines the political and economic context of the industry, along with its growth rate and typical profit margins. Once the industry is understood, the entrepreneur continues to describe the firm's strength's and weaknesses and its opportunities and threats (SWOT). Based on this information, the entrepreneur refines his or her vision, mission, and business model and creates a strategy to achieve a sustainable competitive advantage.

WebEx Communications (A): Navigating Through a Turbulent Market WebEx Communications, founded in 1996 by Min Zhu and Subrah Iyar, was an Internet-based, carrier-class communications services provider of web conferences and meetings. The company's early performance was impressive, but analysts had recently pointed out that the revenue growth rate was slowing. WebEx was considering a number of strategies to boost sales: expand the product line vertically to target specific end-user groups like health care or finance; increase partnering agreements with resellers; focus more on enterprise customers, which had the potential for hub-and-spoke acquisition of additional customers; or expand internationally (international sales accounted for about 4% of revenues in 2002).
Joint Juice This case focuses on Joint Juice, a start-up in the new-age beverage category. The company has a patented formula for producing a glucosamine beverage, the only one on the market. (Glucosamine is a nutritional supplement believed to help rejuvenate joints and treat arthritis.) The company has made slow progress in its initial phase, but as the case ends, it has an opportunity to go national with two of the nation's largest grocery chains. Teaching Purpose: To explore the alternative growth strategies of young companies and the challenges presented by rapid growth. The questions that present themselves are: Does Joint Juice know enough to go national? What investments would be required for this strategy? What alternative strategies are available?
eBay, Inc. eBay was the world's largest and most popular person-to-person trading community on the Internet. In early 1999, the company was doing very well and seemed to have solved many of its early problems. However, on March 30, 1999, Amazon.com announced that it was entering the online auction arena. This powerful firm could prove to be eBay's strongest competitor to date. Teaching Purpose: What should eBay do in light of the entry of its most recent and serious competitor to date.
David Neeleman: Execution of Strategy is Key Execution of the strategy is key. You must, as a leader, be able to expose yourself to your employees and ask for feedback. You must be able to answer when you are wrong, or don't know the answer. These are very simple concepts, but are very difficult to execute on an every day basis.
Lynn Reedy: Develop the Right Strategy Another principle instilled in the people at eBay is to develop and execute the right strategy at the right time.
Lynn Reedy: Strategy: Growth of eBay Lynn explains how a company goes from 3 billion to 30 billion. eBay has less that 1% of the retail market in most cases. Management believes that eBay should do more of the stuff that they are already doing. eBay will expand to new countries and work at categories like business and industrial. eBay plans to achieve this goals of 30 billion using its platform and by learning from the buyers and sellers.
Michael Porter: What is Strategy? Today's dynamic markets and technologies have called into question the sustainability of competitive advantage. Under pressure to improve productivity, quality, and speed, managers have embraced tools such as TQM, benchmarking, and reengineering. Dramatic operational improvements have resulted, but rarely have these gains translated into sustainable profitability. And gradually, the tools have taken the place of strategy. As managers push to improve on all fronts, they move further away from viable competitive positions. Michael Porter argues that operational effectiveness, although necessary to superior performance, is not sufficient, because its techniques are easy to imitate. In contrast, the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match.