Frameworks

Customers: who are our customers and what job do we solve for them? Value proposition: what value do we create for our customers, and for our partners?

Offer: what is our offering? Distribution architecture: how do we reach our customers? Value chain: what are our value-creating steps? Core capabilities: what capabilities do we need? Partners: which partners do we need?

Cost structure: defined by the value architecture. Sources of revenue: with what do we earn money?

Leadership style: what leadership style do we have? Relationship style: how do we interact with each other and the customer? Values: what values do we pursue?

The firm internalises some transactions and uses hierarchical authority as its mechanism of governance.

Scarce resources push INVs to use alternative approaches, rather than owning everything, to plan for and manage crucial assets.

INVs develop competitive advantage by synthesising resources across national borders.

Proprietary knowledge matters most, especially in knowledge-based INVs.

Technology that local rivals do not have.

Relationships and networks that give access to opportunities.

Skills and knowledge of the firm’s people.

Lower unit costs from producing at larger volume.

Benefits from being located in a cluster of related firms.

Mission statement (why the business exists and what its model should accomplish), product/market scope (the products and markets it concentrates on, projected 3–5 years ahead) and basis for differentiation (why customers prefer it — through cost leadership on price or through differentiation of products and services).

Example — Etsy’s mission: “To keep human connection at the heart of commerce.” (Forbes, 2023)

Core competencies (capabilities that are a unique strength, difficult to imitate and integral to success) and strategic assets (anything rare and valuable the firm owns: plant, location, brands, patents, customer data, highly qualified staff, distinctive partnerships). New ventures combine the two to create a sustainable competitive advantage.

Example — Toyota’s hybrid and electric vehicles and its worldwide dealer and spare-parts locations.

Suppliers (to insource products), partners (to outsource products) and other key relationships such as logistics firms. New ventures usually lack the resources to perform every role, and most tasks are not core to their advantage.

Example — Dell differentiated through assembling computers but bought chips mainly from Intel and relied on UPS and FedEx for delivery.

How the firm interacts with customers before, during and after the sale, traditionally or digitally: its target (often niche) customer, fulfilment and support (channels and service levels) and pricing model (for example instalments, deposits, interest-free credit; charging directly or through a service provider).

Example — Amazon and eBay sell over the Internet; Ryman sells through traditional stores and online.

The family acts together around a shared purpose for the business.

Decisions are judged over generations, not quarters.

Example — Frescobaldi practised sustainable agriculture long before it was fashionable because it manages for future generations.

The firm carries a history and a name that the family wants to pass on.

Owner-managers see themselves as guardians of the business assets for the next generation.

Staff are treated as part of a long-term community rather than a cost to cut.

Example — Miele invested even more in training its loyal, Germany-based staff when the trend was to downsize and cut costs.

Renewal is needed to keep the business alive across generations.

Honest discussion inside the family keeps conflict manageable and ideas flowing.

Vision, Entrepreneurial Drive, Business Skills, Employees, Ethics, Succession Process, Adaptability. Succession works best when treated as part of business strategy, not as a head-hunting transaction.

Pride, Mutual Support, Strong Values, Social Engagement, Fairness, Ability to Handle Conflict, Strength in Unity. High-performing families do not avoid conflict; they discuss it openly and respectfully.

Trust, Control, the Equal/Unequal concept, Voting Rights, Responsible Ownership, Equity Concentration. The most able person leads, not the one with the most shares.

Separation of Issues, Formal Processes, Stewardship, Governance Structures, Role of the Family. Just enough structure to support business and family without bureaucracy.

Overcome poverty or one or more problems that threaten people and society (education, health, technology access, environment and so on) — not profit maximisation.

The business must be financially and economically sustainable.

Investors get back their investment amount only; no dividend is paid beyond it.

Once the investment is repaid, profit stays with the company for expansion and improvement.

The business is environmentally conscious.

Employees receive a market wage with better working conditions.

“Do it with joy.”

A new solution or approach to a social problem that will change the pattern in a field — a transformational innovation, not a tweak.

Creative both as a goal-setting visionary and as a problem solver able to engineer the vision into reality.

Driven by the vision of solving the problem; will not rest until the idea is the new pattern for society, while grappling with practical “how to” challenges.

The idea has the potential to change the field significantly and trigger nationwide impact.

The entrepreneur must be trusted, because major structural change needs support across many stakeholder groups.

Intense competition and demanding foreign customers force the venture to improve its products and processes. Exposure to new technologies and industry ecosystems lets it access or accumulate resources it lacked at home.

Selling in several countries raises sales volume, so fixed costs such as R&D are recovered over more units. This lifts profitability, the capacity to innovate and competitiveness.

Example — Airbnb and Uber push this to the extreme: homes and cars are supplied by users, so a new city adds few fixed costs.

Offering products or services that are clearly distinct from what local rivals provide.

Example — Airbnb met the old need for somewhere to stay in a completely new way; the Copenhagen study calls differentiation its single most important strategy.

International activity opens access to partners and networks that bring resources, knowledge and customers.

Example — Airbnb acquired the German competitor Accoleo, which let it enter the German market aggressively.

Entering a new market first lets the business build brand presence and a customer base before competitors arrive (Week 6 tutorial).

Example — Airbnb entered Russia early to discourage copycat rivals, ahead of more obviously lucrative markets.

An international entrepreneurial orientation, usually built through international business experience or education.

Example — Uber’s founders had already built internet businesses serving users across countries: Kalanick with Scour and Red Swoosh, Camp with StumbleUpon.

This combination makes founders alert to international opportunities and ready to exploit them.

Example — Chesky and Gebbia quit their jobs before they had a firm idea, then kept Airbnb alive by selling election-themed cereal boxes.

The ability to learn quickly about unfamiliar markets, customers and ways of managing.

Example — Chesky lived for months in homes rented through Airbnb and repeatedly asked leading executives for advice, “going to the source”.

Knowledge of different institutional and cultural environments, which lets the founder work across them.

The ability to form social and business networks that can be used and built upon during internationalisation.

Example — The study argues that Airbnb’s founders drew on the international experience of their first investor, Paul Graham, and the Y Combinator team.

The function and features of a good or service, including quality, design, after-sales service and branding.

Example — JD sells lifestyle sportswear, and its buying power leads manufacturers to make ranges exclusive to JD, such as adidas Forest Hills.

Depends on cost, required profit, competitor prices and what consumers will pay. Price directly generates income, so it must be seen as value for money relative to quality.

Example — JD keeps prices in line with rivals for branded goods and uses bulk buying to keep unit costs low.

Making products available to the customer in the most convenient way: locations, channels and the shopping experience.

Example — JD sells on the high street, in out-of-town locations, in shopping centres and online.

Creating awareness, interest and desire to buy; it can also create or change a brand image and maintain market share.

Example — JD mixes paid advertising with direct, below-the-line promotions such as email, competitions and celebrity events.

Identifies the product and where it comes from.

Promises a consistent quality to buyers.

Advertises the product; the mark comes to represent the product.

Creates an image of the product in the minds of consumers and prospective consumers.

Being comfortable choosing and using digital tools such as websites, apps, online payments, data and social media. In the Lebanon chapter, an expert interviewee lists search engine marketing, content marketing, social media marketing and social selling as the skills employees need, and says that without them “you may not be the right person to go into digital entrepreneurship”.

Example — LebMall’s founder built his own websites: “I know how to develop Web sites through my personal education and curiosity.”

Turning new and imaginative ideas into reality. Digital technologies widen the options: a shop can become a poster, and a product launch can become a community event.

Example — Tesco put “virtual stores” (displays of scannable product codes) in South Korean subway stations and bus stops.

Questioning your own assumptions instead of trusting them. The case collection warns that founders fall into confirmation bias, overconfidence and escalation of commitment, and recommends testing the riskiest assumptions before scaling up (Göcke and Weninger, 2021).

Example — Before building anything, kawaloo surveyed both landlords and tenants and invited them to test mock-ups of the platform.

Reaching and persuading customers, partners and investors, online and face to face. Digital channels make this cheaper, but trust still has to be earned.

Example — Jolla asked its community which extra features they wanted and turned the answers into crowdfunding stretch goals. WIB combined social media with selling in person at events.

The platform must create value for at least two groups at once, such as guests and hosts on Airbnb. Each side has to be won and kept separately.

Example — Anyyogi connects yoga teachers, students and the spaces where classes take place.

The platform becomes more valuable as more people use it. Same-side effects: more users attract more users of the same kind, as in a social network. Cross-side effects: more users on one side attract the other side, as when more sellers on eBay attract more buyers.

Example — kawaloo judged that storage supply was the side that would start the network effect.

At launch, neither side wants to join an empty platform. The founder must reach a critical mass on both sides before the network effects start working in the platform’s favour.

Example — LogCorp kept drivers available through professional driver agencies so that business customers always found a courier.

Strong network effects can lock users in, so one or a few platforms dominate. This is most likely when users single-home (use only one platform, as with Google search) rather than multi-home (use several, as in fashion e-commerce).

Example — Whether users single- or multi-home affects how much capital a platform needs, its market entry strategy and its competitive position.