Management of Technology Introduction to Technology and Innovation Management

Management of Technology

Contents
1. Terms and Definitions 2. Technology and Strategy 3. Assessing Innovative Capabilities

Management of Technology

Terms and Definitions

Management of Technology

Definition of Terms

Invention versus discovery: We discover what before existed, though to us unknown; we invent what did not before exist. Webster Basic versus applied research: Basic research refers to activities involved in generating new knowledge; applied research is geared to solving particular technological problems

Management of Technology

Definition of Terms
Technology: This refers to the theoretical and practical knowledge, skills and artifacts that can be used to develop products and services as well as their production and delivery systems. Technology can be embodied in people, materials, cognitive and physical processes, plant, equipment and tools Technological Innovation: This can be technology-based or facilitated by technology. We define successful technological innovation as that which returns the original investment plus some additional returns
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Definition of Terms
Innovation process: This can be defined as the combined activities leading to new, marketable products and services and/or new production and delivery systems

Management of Technology

Definition of Terms
Types of technological innovation: Incremental innovation: adaptation, refinement and enhancement of existing products or services Radical innovation: entirely new product and service categories Architectural innovation: reconfigurations of the systems or components that constitute the product

Management of Technology

Definition of Terms
Network effects (network externalities): Value depends on number of users (Strong get stronger, weak get weaker Winner take all markets) Positive feedback Telefon, Internet,... Indirect network effects Software Expectations management Competitive pre-announcements Google permanent beta
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Definition of Terms
Lock-in and switching costs: Costs necessary to switch from one product/technology to another one Example: Stereos and LPs Costly switch to CDs Systems lock-in: durable complements Hardware, software, and wetware Individual, organizational, and societal

Management of Technology

Technology and Strategy

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Technology and Strategy

Porters 5-forces model

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Technology and Strategy

Porters generic strategies concept is a widely used framework for classifying competitive strategies. The generic strategies are: Industrywide differentiation Focused differentiation Industrywide cost leadership Focused cost leadership

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Technology and Strategy

Generic strategy Overall cost leadership Technological policies Product technological change Product development to reduce product cost by lowering materials content, facilitating ease of manufacture, simplifying logistical requirements, etc. Product development to enhance product quality, features, deliverability, or switching costs Product development to design only enough performance for the segment's needs Product design to meet exactly the needs of the particular business segment application Overall differentiation Focus-segment cost leadership Focus-segment differentiation

Process technological change

Learning curve process improvement Process development to enhance economies of scale

Process development to support high tolerances, greater quality control, more reliable scheduling, faster response time to orders, and other dimensions that improve the ability to perform

Process development to tune production and delivery system to segment needs in order to lower cost

Process development to tune the production and delivery system to segment need in order to improve performance

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Technology and Strategy

Technology and Product-Market Strategy A firms strategy is expressed in the products and services it brings to market. One way to get at the integration of a firms technology and productmarket strategy is: Decompose each product or service into its constituting technologies and assess the relative strengththe degree of distinctive competence the firm has with respect to that technology

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Technology and Strategy

Technology Portfolio Harris, Shaw, and Somers suggest: Once various technologies have been identified, they can be classified in terms of their importance for competitive advantage Next, the firms position relative to its competitors can be assessed

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Technology and Strategy

High

Bet

Draw

Cash in

Fold

ec nat r op m i ygo l onhce T

Low High Low

Relative technology position

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Personal Introduction
Technology & Business Portfolio Couples Technology portfolio with McKinsey (BCG) framework for business portfolio based on competitive position and attractiveness...

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Technology and Strategy

High

B A

High

ss e ne v it artt A

Low High Competitive position Low

ec nat r op m i ygo l onhce T

Low High Low

Relative technology position

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Personal Introduction
Technology Forecasting It is the capacity to perform systematic technological forecasting. Some useful techniques for forecasting are: Technological progress functions (S-curves) Trend extrapolation The Delphi method Scenario development

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Assessing Innovative Capabilities

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Assessment
Helps general manager assess to potential of existing innovative capabilities: How has the firm been innovative in product/service offerings and/or productin/delivery systems? How good is the fit between current business and corporate strategies and innovative capabilities? What are the needs in terms of innovative capabilities to support long-term business and corporate competitive strategies?

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Assessment
Innovative capabilities: Comprehensive set of characteristics of an organization that facilitate and support innovation strategies

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Business Unit Level Audit

This framework measures five important categories of variables that influence the innovation strategies of a business: Resources available for innovative activity Capacity to understand competitors strategies and industry evolution with respect to innovation Capacity to understand technological developments relevant to the business unit Structural and cultural context of the business unit affecting internal entrepreneurial behavior Strategic management capacity to deal with internal entrepreneurial initiatives
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Business Unit Level Audit

Resource availability Understanding competitors innovative strategies and industry evolution

Business unit innovative strategy

Understanding business unit technological environment

Business unit structural and cultural context

Business unit strategic management capacity

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Corporate Level Audit

At this level, the audit investigates whether and how the innovative capabilities of the corporation are larger than the sum of those at the individual business units. Five key categories are: Resource availability and allocation Capacity to understand multi-industry competitive strategies and evolution Capacity to understand technological developments Corporate structural and cultural context Corporate strategic management capability
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Corporate Level Audit

Resource availability and allocation Understanding competitors innovative strategies and multi-industry evolution

Corporate innovative strategies

Understanding corporate technological environment

Corporate structural and cultural context

Corporate strategic management capacity

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