Entrepreneurship can be defined as the recognition of opportunities and the use of creation of resources to implement innovative ideas for new, thoughtfully planed ventures. The essential characteristic of an entrepreneur is identifying the opportunity and elaborating that opportunity into a formal but it is also important to have an entry strategy while setting up a startup. So, today in this article we are going to learn the entry strategies and risk reduction strategies that are applied by every entrepreneur is explained clearly.


Entrepreneurial strategy involves identifying and choosing among a set of distinct choices that define a company as it translates an idea into a meaningful value proposition. So, setting up a strategy clearly describes ” what not to do? ” that is, a strategy act as a back bone for an entrepreneurship. The four strategies that can be explored for an idea are as follows:



Entrepreneurs who pursue intellectual property strategy for their ideas choose to invest in control over their underlying innovation in order to construct a value chain through collaboration with incumbent firms in industry to create value for the final end consumers.

  • This type of startups focuses on idea generation and development to avoid the cost of down stream, customer facing activities. because cooperation requires alignment with incumbent activities. Simply, the startup which use this strategy probably choose technological investments with existing systems.


This type of strategy highlights about decision to compete directly with incumbents emphasizing commercialization of idea and rapid growth of market share rather than control on ideas of development. Disruption entrepreneur aims to redefine established value chain.

  • Therefore, a disruption startup chose the competition orientation against established firms in the industry by choosing to compete through execution. Disruption strategy founders will inevitably face threat of imitative competition from incumbents and new entrants alike because of choosing invest in execution than in getting control over their idea.
  • Even value chain strategy is also similar to the disruption strategy where entrepreneurs choose to invest in execution rather than control but the only difference is that, they create value with the cooperation of industry incumbents.


The final strategy in the entrepreneurial strategy framework is architectural strategy. Unlike the other type of strategies , architectural strategy is about architecting an entire new value chain in the market place rather than boosting the performance of an existing value chain.

  • This type of strategy requires entrepreneurs to figure out how to build a new and integrated value chain that delivers value to customers while also building an economic support by maintaining control over their idea as they compete directly against incumbents.
  • Architectural entrepreneurs establish competitive advantage through the traditional strategic approaches. Compared to other strategies, architectural strategy used entrepreneurs must be committed to their vision and plan.


The situation that threatens the capability of the startup or a company to achieve its financial goals is considered as a risk to the business. There may be ma strategies in order to manage and reduce the financial loss to the company. The three type of risk reduction strategies are as follows:

1 NARROW SCOPE STRATEGY: Narrow-scope strategy offers a small product range to a small number of customer groups to satisfy a particular need. The narrow scope can reduce the risk that the firm will face competition with larger firms. A narrow-scope strategy is vulnerable to the risk that market demand does not materialize as expected. Having a narrow-scope strategy is like putting all your eggs in one basket that is, it reduces some competition-related risks but also increases the risks associated with market uncertainties.

2 BROAD SCOPE STRATEGY: Broad scope strategy highlights portfolio approach dealing with uncertainties about attractiveness of different market segments. By offering a range of products the entrepreneur gains knowledge on whole market through a process of trial and error. A broad-scope strategy reduces risks from market uncertainties, but it increases the exposure of competition. When the risk of competition is great and market uncertainties are minimal, a narrow-scope strategy is more effective at reducing risk but when a new firm entered into market with same sort of creation then, a broad-scope strategy reduces the major risk of uncertainties over customer preferences.

3 IMITATION STRATEGY: Imitation strategy copy’s the best practices of other firms in order to minimize the risk of downside loss associated with new entry in to the market. An imitation strategy has the potential of reducing the entrepreneur’s costs associated with R&D and also reduces the customer uncertainty over the firm. Imitation strategy makes the new entry to look legitimate from day one onwards. This imitation strategy is also known as me too strategy.