2 intro to technology management

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1Management of Technology

Management of Technology

Introduction to Technology and

Innovation Management


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Contents

1.Terms and Definitions

2.Technology and Strategy

3. Assessing Innovative Capabilities


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Terms and Definitions


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Definition of Terms

Invention versus discovery:

We discover what before existed, though to usunknown; we invent what did not before exist. Webster

Basic versus applied research:

Basic research refers to activities involved ingenerating new knowledge; applied research isgeared to solving particular technological problems


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Definition of Terms

Technology:

This refers to the theoretical and practicalknowledge, skills and artifacts that can be used todevelop products and services as well as their

production and delivery systems. Technology canbe embodied in people, materials, cognitive andphysical processes, plant, equipment and tools

Technological Innovation:

This can be technology-based or facilitated bytechnology. We define successful technologicalinnovation as that which returns the originalinvestment plus some additional returns


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Definition of Terms

Innovation process:

This can be defined as the combined activitiesleading to new, marketable products and servicesand/or new production and delivery systems


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Definition of Terms

Types of technological innovation:

Incremental innovation: adaptation, refinement andenhancement of existing products or services

Radical innovation: entirely new product andservice categories

Architectural innovation: reconfigurations of thesystems or components that constitute the product


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Definition of Terms

Network effects (network externalities):

Value depends on number of users (Strong getstronger, weak get weaker Winner take allmarkets)

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 oneproduct/technology to another one

Example: Stereos and LPsCostly switch to CDs

Systems lock-in: durable complements

Hardware, software, and wetware

Individual, organizational, and societal


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Technology and Strategy


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Porters 5-forces model


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Porters generic strategies concept is awidely used framework for classifyingcompetitive strategies. The generic strategiesare:

Industrywide differentiation

Focused differentiation

Industrywide cost leadership

Focused cost leadership


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Technology and StrategyGeneric strategy

Overall cost

leadership

Overall differentiation Focus-segment cost

leadership

Focus-segment

differentiation

Technological policies

Product technologicalchange

Product development toreduce product costby loweringmaterials content,facilitating ease ofmanufacture,simplifyinglogisticalrequirements, etc.

Product development toenhance productquality, features,deliverability, orswitching costs

Product development todesign only enoughperformance for thesegment's needs

Product design to meetexactly the needsof the particularbusiness segmentapplication

Process technologicalchange

Learning curve processimprovementProcessdevelopment to

enhance economiesof scale

Process development tosupport hightolerances, greaterquality control,

more reliablescheduling, fasterresponse time toorders, and other

dimensions that improvethe ability to perform

Process development totune productionand deliverysystem to segment

needs in order tolower cost

Process development totune the productionand deliverysystem to segment

need in order toimproveperformance


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Technology and Product-Market Strategy

A firms strategy is expressed in the products andservices it brings to market. One way to get at theintegration of a firms technology and product-

market strategy is:

Decompose each product or service into itsconstituting technologies and assess the relativestrengththe degree of distinctive competence

the firm has with respect to that technology


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Technology Portfolio

Harris, Shaw, and Somers suggest:

Once various technologies have been identified,they can be classified in terms of their importancefor competitive advantage

Next, the firms position relative to its competitorscan be assessed


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Bet Draw

Cash in Fold

High

Low

Techn

ologyimpo

rtance

Relative technology position

High Low


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Personal Introduction

Technology & Business Portfolio

Couples Technology portfolio with McKinsey (BCG)framework for business portfolio based oncompetitive position and attractiveness...


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High

Low

Attrativ

eness

Competitive position

High Low

High

Low

Techn

ologyimportance

Relative technology position

High Low

A A

B

B


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Personal Introduction

Technology Forecasting

It is the capacity to perform systematictechnological forecasting. Some useful techniquesfor 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 ofexisting innovative capabilities:

How has the firm been innovative inproduct/service offerings and/orproductin/delivery systems?

How good is the fit between current business andcorporate strategies and innovative capabilities?

What are the needs in terms of innovativecapabilities to support long-term business andcorporate competitive strategies?


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Assessment

Innovative capabilities:

Comprehensive set of characteristics of anorganization that facilitate and support innovationstrategies


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Business Unit Level Audit

This framework measures five important categoriesof variables that influence the innovation strategiesof a business:

Resources available for innovative activity

Capacity to understand competitors strategiesand industry evolution with respect to innovation

Capacity to understand technologicaldevelopments relevant to the business unit

Structural and cultural context of the businessunit affecting internal entrepreneurial behavior

Strategic management capacity to deal withinternal entrepreneurial initiatives


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Business Unit Level Audit

Business unit

innovative

strategy

Resource

availability

Understanding

competitors

innovative

strategies and

industry evolution

Understandingbusiness 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 andhow the innovative capabilities of the corporationare larger than the sum of those at the individual

business units. Five key categories are: Resource availability and allocation

Capacity to understand multi-industrycompetitive strategies and evolution

Capacity to understand technologicaldevelopments

Corporate structural and cultural context

Corporate strategic management capability


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Corporate Level Audit

Corporate

innovative

strategies

Resource

availability

and allocation

Understanding

competitors

innovativestrategies and

multi-industry

evolution

Understanding

corporatetechnological

environment

Corporate structural

and cultural context

Corporate strategic

management capacity

2 intro to technology management

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