Technological Environment

[ABB-PBS Joint Venture Operations]

What is Technological Environment ?

External factors in technology that impact business operations.

That part of the firm's external environment in which changes in technology affect the firm's marketing effort

Consists of those factors related to knowledge applied and material and machines used in the production of goods.

Features of Technology
Its change and then more change, forces change on people whether they are prepared for it or not Its effects are widespread, reaching far beyond the immediate point of technological impact.

Technology is self reinforcing, Technology feeds on itself. Technology makes more technology possible

Technology is complete set of knowledge, ideas and methods

Impact of Technology
Technology has its impact through various dimensions;
Impact on Society
Social Change System Complexity High expectations of consumers

Impact on Economy

Product Differentiation Jobs becomeProductivity Increased Budget on research & development Increase in intellectual

Impact on Firm

New Markets Telecommunication E-Commerce Resistance Risk Factor to change Change in Organisation Structure

Modes of Technology Acquisition

Internal Acquisition
External Acquisition
Licensing. Purchasing Joint Venture Acquisition of technology of rich firm

Combined source

Benefits of Joint Venture

Provide the opportunity to obtain new capacity and proficiency.

Makes new geographical markets accessible to the company.

Because of its short life span, do not represent a long term commitment. Offer a creative way to exit from non-core businesses

Case Study: ABB-PBS Joint venture in operations

ABB-PBS Joint Venture started operations in April 15,1993 ABB had a 67% stake and PBS had a 33% stake. Business of joint venture in its first two years was good in most aspects 2.3% increase in return of assets and 4.5% on sales. Also showed 12% increase in exports Started external service business in1995 which did not meet expectations. Dominated the boiler business in 1995 with 70% market share.

Case Study: ABB-PBS Joint venture in operations

Market Share was hit due to change in environmental laws.
With Joint efforts of the concern the restructuring took place in plant logistics , information systems and other physical capital improvements.

Resulted in 50% increase in labor productivity.

The technology leadership was not realized because due to the lack of corporate intent and loss of efficient staff. Major achievement of the concern was development of new steam turbine line . This technology transfer helped in establishing the benchmark for other ABB companies on variables like productivity, inventory and receivables

CONCLUSION
(Case Analysis)

Case Analysis
The joint venture met the needs of both the partners in:
Labor Productivity. Profitability due to return on sales & assets

Exports
Development of new engine

The joint venture failed in:

Technology Leadership External Service and Revenue Performance.

Case Analysis
The company failed in achieving technological leadership
Due to lack of Corporate intent Due to lack of talent management

inefficient human resource management

Flourishing of domestic business

Lessons drawn from this incident

Presence of corporate intent and exceeding in it.
Company should focus on knowledge management and talent retention management. Company should be ready to adapt to the technological change.