Strategy in the entrepreneurial sense refers to a stream of actions to achieve some longer term goals. Strategies have a contingent or emergent aspect, which means that they are not a rational act but the result of an up down process. An emerging market refers to a transitioning economy with business activity in the process of rapid growth. Peng in the chapter ‘Strategies of Entrepreneurial Start-Ups’ suggests that transition featured a new class of smaller entrepreneurial firms, that competed with State owned firms and privatized reformed firms.
The characteristic of sheer entrepreneurial energy permeated in all these smaller firms. Peng raises three main questions which are how the entrepreneurs rose in the traditionally business hostile environment, who the entrepreneurs were and what strategies were adopted by them.
Peng specifies three perspectives that made a combination of factors for someone to be an entrepreneur ranging from the psychological perspective to social and cultural backgrounds and their social networks. The psychological perspective specifies the personality traits of a person and his willingness to work under someone or be self-employed. The larger business environment affected the rise of entrepreneurs as well. Economic transition provided powerful incentives for all sorts of entrepreneurs to mushroom, ranging from farmers and gray individuals to former cadres to professionals. Different entrepreneurs tended to specialize in different fields in an effort to take advantage of their particular strengths. Collectively there was a creation of an entrepreneurial movement that gave a kick start to transform the economies. Smaller entrepreneurial start-ups adopted some strategies that distinguished them from larger and more established competitors such as the SOEs or other already established private firms.
However some strategies of smaller firms would converge with those of other organizational firms. Peng discusses 3 different strategies which are; prospector, networking and boundary blurring. ‘Prospector’ shows how many private start-ups had distinct and dynamic strategies that were not employed by other firms in transition. The essence of this strategy is speed, stealth and sound execution.