TECHNOLOGY TECHNOLOGY MANAGEMENT 5a: MANAGEMENT 5a: MANAGEMENT CONCEPTS 1MANAGEMENT CONCEPTS 1Technological Competitive Technological Competitive PositionPosition

CP BeukmanCP Beukman

Engineering Management ProgrammeEngineering Management Programme

University of CanterburyUniversity of Canterbury

Issue 1.0 April 1999Issue 1.0 April 1999

The right thing to doThe right thing to do

Managing technology strategically Managing technology strategically means doing three things right:means doing three things right:

Doing the right thing 1Doing the right thing 1

Recognising important Recognising important technologies for the business and technologies for the business and the corporation - the corporation -

• by their maturitiesby their maturities

• by their competitive impactby their competitive impact

Doing the right thing 2Doing the right thing 2

Mastering these important Mastering these important technologies to gain sustainable technologies to gain sustainable competitive advantagecompetitive advantage

Doing things right 3Doing things right 3

Using these technologies Using these technologies effectively by integrating them effectively by integrating them with the other success factors in with the other success factors in the businessthe business

MaturityMaturity

Maturity places technology along a Maturity places technology along a continuum and helps one to continuum and helps one to understand the possibilities for understand the possibilities for additional advances in the additional advances in the technologytechnology

Competitive ImpactCompetitive Impact

Competitive impact of a Competitive impact of a technology is an indicator of the technology is an indicator of the difference such additional difference such additional advances make for the businessadvances make for the business

Technological competitive Technological competitive positionposition

Means the ability of a particular Means the ability of a particular company to gain sustainable company to gain sustainable advantage through technology advantage through technology (and R&D) in competition with (and R&D) in competition with other companies which are also other companies which are also working toward the same objectiveworking toward the same objective

Competitive strengthCompetitive strength

Technological competitive strength Technological competitive strength in the business is a measure of in the business is a measure of the degree to which a company the degree to which a company masters important technologies masters important technologies relative to its competitorsrelative to its competitors

Template to assess competitive strengthTemplate to assess competitive strength

Descriptor Characteristics

Dominant

Powerful technological leader High commitment, funds, manpower, creativity Well recognised in industry Sets pace and direction for technological development Competitors consistently seek to catch up

Strong

Able to express independent technical action, set new directions Technological commitment and effectiveness consistently high Technological accomplishments distinguish its strategic business units from lesser

competitors

Favourable

Able to sustain the technological competitiveness of the SBU it serves Has strengths that can be exploited to improve technological competitive position Not a technological leader except in developing niches

Tenable

In a catch-up mode Unable to set independent course Can maintain competitiveness of the SBU, but unable to differentiate it from

competitors’

Weak

Declining quality of technical output versus competitors Short-term, firefighting focus Products, processes, costs, slipping relative to competitors’ Difficult, but not impossible to turn around

Choice of approachChoice of approach

The maturity of critical technologies The maturity of critical technologies will have a choice (together with the will have a choice (together with the enterprise’s competitive position) enterprise’s competitive position) on the choice of strategy to develop on the choice of strategy to develop those technologies.those technologies.• Embryonic - yes invest in developmentEmbryonic - yes invest in development• mature - more participants etc; think mature - more participants etc; think

againagain

Ignoring competitorsIgnoring competitors

Even worse than undertaking an Even worse than undertaking an R&D objective from an inferior R&D objective from an inferior technological position in the face technological position in the face of known strong R&D competitors,of known strong R&D competitors,

is undertaking the work in is undertaking the work in ignorance of competitors’ ignorance of competitors’ technological competitive positiontechnological competitive position

Policy instrumentsPolicy instruments

Technological maturityTechnological maturity Competitive positionCompetitive position

are key instruments in setting R&D are key instruments in setting R&D policypolicy

ProductsProducts

The primary outcomes of a The primary outcomes of a technology based strategy are technology based strategy are products and servicesproducts and services

Product design is fundamental to Product design is fundamental to commercial successcommercial success

LeadershipLeadership

Leadership requires excellence in Leadership requires excellence in all functions that contribute to all functions that contribute to success - this includes R&D.success - this includes R&D.

R&D excellence requires R&D excellence requires • clear market visionclear market vision• knowledge of competitors’ strengthsknowledge of competitors’ strengths• ability to assemble and focus R&D ability to assemble and focus R&D

resourcesresources

SME successSME success

Successes of many SMEs is due in Successes of many SMEs is due in part to an almost single-minded part to an almost single-minded dedication of R&D strength to a dedication of R&D strength to a single technical area, focused on a single technical area, focused on a single business opportunitysingle business opportunity

The ParadoxThe Paradox

How to maintain intellectual How to maintain intellectual vitality and creativity of an R&D vitality and creativity of an R&D organization while denying organization while denying resources for intellectually resources for intellectually attractive ideas in favour of attractive ideas in favour of strategically more important strategically more important alternativesalternatives

Measurement IssuesMeasurement Issues

Using lack of sales as a way to Using lack of sales as a way to uncover poor design choices is uncover poor design choices is akin to using aircraft crashes as a akin to using aircraft crashes as a method to determine design method to determine design design flaws.design flaws.

What can be measured early to What can be measured early to find out if the product will work?find out if the product will work?

SummarySummary

The evaluation of technological The evaluation of technological competitive position is a vital, if often competitive position is a vital, if often neglected, tool of effective R&D neglected, tool of effective R&D planning.planning.

The company that apply the concept The company that apply the concept effectively will always possess effectively will always possess significant advantages over companies significant advantages over companies that do not.that do not.