An economic model of strategic entrepreneurship

Abstract

Research Summary How do new entrants create and capture value in established industries? Starting from the foundations of neoclassical economics, we model entrepreneurial entry and competition as occurring simultaneously in production technology space and product attribute space. Our model's central feature is to disaggregate entrepreneurial rents into four components: arbitrage, innovation, organization, and uncertainty‐bearing. This permits us to model the nature of value creation from a common analytical platform, and to measure value capture as a set of distinct rent streams available to multiple stakeholders over time. Managerial Summary Although there is broad consensus that the essence of entrepreneurship is the creation and capture of new value, both scholars and practitioners have struggled to connect this basic exhortation to the entrepreneurial process. This paper argues that returns to entrepreneurial action can be generated through four main mechanisms: innovation, uncertainty‐bearing, new business models, or inter‐industry arbitrage—either uniquely, or in combination. Examining these mechanisms for value creation together reveals implications for how best to organize and manage the entrepreneurial process so that that returns to entrepreneurial action can be appropriated equitably.

Building competitive advantage with sustainable products – A case study perspective of stakeholders

“…Previous research theories were reported by Porter (2008) and Westgren & Wuebker (2019) that sustainable product innovators may require different business models. For example, electric cars may require distinctive charging stations and different business strategies.…”

“…Sustainable product innovators may require a different business model. For example, electric cars, may require distinctive charging stations and different business plans (Porter, 2008;Westgren & Wuebker, 2019). Some previous literature has focused strongly on the psychological, political and logistical phases of business execution (Michael E. & James E., 2015;Tukker, 2015;Westgren & Wuebker, 2019;Witjes & Lozano, 2016).…”

“…For example, electric cars, may require distinctive charging stations and different business plans (Porter, 2008;Westgren & Wuebker, 2019). Some previous literature has focused strongly on the psychological, political and logistical phases of business execution (Michael E. & James E., 2015;Tukker, 2015;Westgren & Wuebker, 2019;Witjes & Lozano, 2016). Most studies are supporting the importance of sustainable products in terms of their design when compared to the implementation of waste management strategies (Andrews, 2015;Lieder & Rashid, 2016;Park et al, 2010).…”

“…While other studies are reflecting business collaboration and stakeholder engagement as key (Bocken et al, 2014). Some authors argue that sustainable products and circular economy related technologies will need new policy paradigms as much as new business models to flourish (Preston, 2012;Westgren & Wuebker, 2019;Ying & Li-jun, 2012).…”

Getting Nothing from Something: Unfulfilled Promises of Current Dominant Approaches to Entrepreneurial Decision-Making

“…We define entrepreneurial decision-making as choices made in the pursuit of differential value creation, appropriation and defense, necessarily against competing forces and beliefs (e.g., Westgren and Wuebker 2019). We see entrepreneurship research as the study of new value generation, often under conditions of relative uncertainty and resource scarcity, often through new products, processes and structures that address an ex post identifiable failure in a past market (Venkataraman 1997).…”