Presentation by management professor Michael Hitt at the 2012 Mays Summer Learning Seminar.

1. Being Strategic and Entrepreneurial:
Building Capabilities and Exploiting
Opportunities in a Dynamic
Competitive Landscape
Michael A. Hitt
July 2012

2. Competitive Landscape
Every morning in Africa, a gazelle wakes up
It knows that it must run faster than the fastest lion or it
will be killed
Every morning a lion wakes up
It knows that it must outrun the slowest gazelle or it will
starve to death
It doesn’t matter if you are a lion or gazelle, when the
sun comes up, you had better start running
(Friedman (2005)

3. The New Competitive Landscape
Global Economic and Political Discontinuities and Disequilibrium
Blurring of Industry Boundaries
Hypercompetitive Markets
Extreme Emphasis on Price, Quality and Satisfaction
Increasing Importance of Innovation and Continuous Learning

4. Lack of Entrepreneurial Mindset
Polaroid: Leader in “Instant Photography”
 At One Time, Member of Top 50 Firms
 Digital Technology Disrupted the Industry
 Bankrupt; Dissolved Business
Blockbuster: Unchallenged Leader in Video Rental
 Netflix and Redbox
 Satellite Rentals
 Stock Value Fell to Near Zero
 Filed Chapter 11

5. Lack of Entrepreneurial Mindset
(cont’d)
Barnes & Noble: Unparalleled Leader in Large
Bookstore Retail Sales
 Amazon.com
 Electronic Books
 Major Reductions in Stock Price
 The Company Was Offered for Sale
 Microsoft Invested $300 million (Nook)

6. Lack of Strategic Mindset
Started with a Unique Reverse-Auction System (patented)
Allowing the Customer to Name the Price and Companies
Can Respond to Provide if Desired
In First Six Weeks, It Sold More than 10,000 Airline Tickets
Total Revenues Grew to Over $1 billion within 4 years of
Operation

7. Lack of Strategic Mindset (cont’d)
Microsoft Expedia—Almost Perfect Imitation of
Priceline’s patented Reverse Auction System
Travelocity.com--Represents 420 Airlines Operated
by SABRE
Hotwire—Alliance of Six Major Airlines
Orbitz.com—(Owned by American, Continental,
Delta, Northwest and United)

8. Strategic and Entrepreneurial
Leader
Strategic Leadership is the “ability to anticipate, envision,
maintain flexibility, think strategically, and entrepreneurially
and work with others to initiate changes that create a viable
future for the organization.”
Vision
Continuous Development of Capabilities
Emphasizing Innovation
Building and Sustaining a Competitive Advantage

9. A Good Vision
Ambitious/Challenging
Reflects Uniqueness/Distinctiveness
Emphasizes Excellence
Inspirational (Enthusiasm)
Clear/Unambiguous

10. Building and Using Capabilities
Resource Portfolio
Building Capabilities
Leveraging the Capabilities for
Competitive Advantage

11. Gaining a Competitive
Advantage
Competitive Advantage: Providing Value to Customers
that Is Superior to that Provided by Competitors
Having Capabilities that Are:
Valuable
Rare
Difficult to Imitate
Nonsubstitutable

12. Building Capabilities
To Gain a Competitive Advantage, Capabilities Must Have
the Following Characteristics
 Valuable
 Rare
To Sustain a Competitive Advantage, Capabilities Must
Have the Following Additional Characteristics
 Difficult to Imitate
 Nonsubstitutable

13. Building and Leveraging
Capabilities
Using the Portfolio of Resources
Enriching Current Capabilities
Developing New Capabilities
Leveraging Capabilities for Advantage
Exploit Current Products
Innovate and Enter New Markets

14. Managing Strategically
Know Your Firm’s Strengths and Acknowledge Its Weaknesses
Know Your Competitors Well
Continuously Seek to Gain and Maintain a Competitive
Advantage
Act Entrepreneurially
Identify/Create New Business Opportunities and Exploit Them

15. Acting Entrepreneurially
Build Flexibility into Processes and Systems
Open to Change
Respond Rapidly
Be Proactive instead of Reactive
Be Creative and Promote Innovation
Seek External Input
Focus on Creating New Products and Markets While
Simultaneously Exploiting Existing Ones

18. If we know ourselves
and our enemy, we
will win

19. Conclusion
“Champions do not become champions when they
win the event, but in the hours, weeks, months and
years they spend preparing for it. The victorious
performance itself is merely the demonstration of
their championship character.”
T. Alan Armstrong