1. Selection: Understanding Technology Evolution and Technology Strategy
Technology Management
Activities and Tools

2. Contents Definition Contextualizing “selection” within:
The TM framework
Technological evolution
Strategy approaches / concepts
Technology strategy

3. Selection Processes 1 Technology audit 2 Forecast the technology
3 Analyse and forecast the environment
4 Analyse and forecast the market/user
5 Analyse the organization
6 Develop the mission
7 Design organizational actions
8 Implementation
Strategic
analysis
Strategic
choice
Exploitation

4. TM framework and Strategy

5. The major TM processes

6. Technology Evolution

7. Technological innovation process is a result of:
Inventions, discoveries
Creativity
Serendipitous
A function of economic demand and growth
Complex and long process

8. The process of technological advance:
the combination of chance events and inventions (variation),
direct social and political action of organizations in selecting between rival technical regimes (selection),
as well as by incremental, competence-enhancing, puzzle-solving actions of many organizations learning-by-doing (retention).

9. Technology develops in response to the interplay of history, individuals, and market demand. Function of both variety and chance as well as structure and patterns.
SO:
Technological progress constitutes an evolutionary system.

10. Technological Discontinuity Competence enhancing Competence destroying
Variation
Technological Discontinuity
Competence enhancing
Competence destroying
Retention
Era of Ferment
Substitution
Design competition
Community-driven
Technical change
Era of Incremental Change
Elaborate dominant design
Architectural innovation
Selection
Dominant Design
A technology cycle.
(Source: Tushman and Andersen, 1997)

11. Competence-enhancing discontinuities significantly advance the state of the art yet build on, or permit the transfer of, existing know-how and knowledge.
Competence-destroying discontinuities significantly advance the technological frontier, but with a knowledge, skill, and competence base that is inconsistent with prior know-how.

12. Technology life cycle/ S-curves
Stage 1. Technology development
Stage 2. Technology application
Stage 3. Application launch
Stage 4. Application growth
Stage 5. Technology maturity
Stage 6. Degraded technology

13. Strategy concepts

14. Strategic thinking Where are we? Where do we want to go?
How will we reach to our goal?
If a ship does not know where to go, none of the winds can be helpful.
(Chinese proverb)

15. Technologies are occasionally included explicitly in typical corporate strategy reviews and corporate planning, since:
Most managers are not trained in science or engineering.
Little knowledge on the process of technological change.
Limited experience and lack of adequate frameworks.
Technological change proceeds slowly: significant change requires 5-10 years.
Most firms are organized around the production process not the technological innovation process.

16. Strategy steps Internal & external analysis Planning Execution
Mission
Vision
Values
Strategic goals
Strategy
Execution
Evaluation and control

17. And select appropriate
Mission
Vision
Evulation
İnternal factors
Evulation
external factors
Formulation
Long-and
Short-term
objectives
Generate,evaluate,
And select appropriate
strategy
Establish functional
Units,organizational
Structures and policies
Implementation
Set plans of action
And schedules
Allocate
resources
Develop performance
Measures and reward
systems
Evaluation
Evaluate
results
Feedback

18. Mission Mission: The reason behind the existence of a firm.
HP: Technical support to the advancement and welfare of mankind.
Merck: To protect human life.
Walt Disney: To make people happy.

19. Vision
Vision: Creativity and foreseeing the position of the firm in near future.
Nike: To beat Adidas
Wal-Mart: To become 150 billion $ worth of by year 2002
General Electric: To be number one or two in all markets where it has production and services.

20. Values
Values: Expectations and norms that affect the behavior of employees as well as their relationships
Walt Disney:
Believe in people
Develop and diffuse American-way of life
Creativity
Consistency and detail-focused

21. Strategy goals Strategy goals needs to be: clear measurable
aggressive but reachable
within time-perspective

22. Strategy Institutional Strategy: growth (revenue, ….)
sustainability (market share,…)
Operational strategies:
cost leadership
differentiation
focus (market, region, product)

23. Example of strategy
Strategic goal: To become the biggest distributor for beauty products in Istanbul
Strategies:
To construct centers in Asian and European side of Istanbul
To increase distributor contracts with producers
To increase imported beauty products
To increase sales personnel

24. Strategy implementation
Operational plans
Short, medium, and long-term plans
Periodically reviewed - revisied if needed
Written action plans
Diffusion into the organization

25. Strategy evaluation and measurement
Comparison with the goals
Finding the differences and their reasons
Updating the plan if needed

26. Resource-based view/ Capabilities view & strategy

27. Strategy is the art of creating value (Source: Normann and Ramirez, 1993) It allows a company’s managers to identify opportunities for bringing value to customers and for delivering that value at a profit. 2 resources that matter in today’s economy: * competence and * relationships (customer and supplier) Innovate: Not just add value but reinvent it.

28. Core competence
Not only performance improvement but also opportunity creation.
Performance improvement includes quality, costs, cycle time, logistics, and productivity, while
opportunity creation consists of growth, new business and market development, strategic direction.

29. Core competencies are:
The collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies.
The organization of work and the delivery of value.
Communication, involvement and a deep commitment to working across organizational boundaries.
Does not diminish with use.

30. Source: Prahalad and Hamel, 19902 3 4 5 6 7 8 9 10 11 12
Business 1
Business 2
Business 3
Business 4
Core product 2
Core product 1
Competence 1
Competence 2
Competence 3
Competence 4
Source: Prahalad and Hamel, 1990

31. 3 Tests to identify core competencies
3 Tests to identify core competencies. Core competence (Source: Prahalad and Hamel 1990)
1) provides potential access to a wide variety of markets.
2) should make a significant contribution to the perceived customer benefits of the end product.
3) should be difficult for competitors to imitate.

32. Embedded skills that give rise to the next generation of competitive products cannot be rented in by outsourcing and original equipment manufacturer supply relationships.
the costs of losing a core competence can be only partly calculated in advance.
core competencies take time.

33. Core products are the components or subassemblies that actually contribute to the value of the end products.
Well-targeted core products can lead to economies of scale and scope.

34. Technology strategy

35. Environmental scanning
Business Goals
Objectives
And
Need-driven
Expectations
Ongoing
improvement in
the innovation
and technology
management process
Environmental scanning
innovations and
competitive
assessment
Technology
awereness of
marketable
inventions
Intervention
Internal and external veritable
Trade-off analysis
Justification for new ideas
Corrective action loops
Technology
obsolescence
Managing the
individual and
organizational
consequences
of technology
Business
strategy
and planning
Product strategy
Science
Industry analysis
Functional strategy
Market and
manufacturing
analysis
Productivity
Employment
Quality of working
life
Organizational
impact
Human factors
Product quality
Technology
forecasting
and
planning
Assessment of
technology
outcome
dimensions
Technology
design
development
and
advancement
Technology
implementations,
project monitoring,
and control
Technology
Adoption and
introduction

36. Types of industries
(1) well defined boundaries & competition by price and the perceived quality is stable over time
(2) well defined boundaries & competition by price and perceived quality changes over time
(3) weakly defined boundaries & competition by the ability to generate new product/market combination.

37. Types of strategy
Performing better than competitors on an already existing dimension of competition
Establishing a new dimension on which to compete
Creating a new product/market combination

38. T Strategy for dynamic competition
** Take into consideration the constituent technologies embodied into the product and the production process used to manufacture it
** Extend the technology analysis to the whole value chain.
** Formulating a technology strategy means defining the 'trajectory' by which technological resources are accumulated, acquired and used

39. Some possible technology strategies: (source: Chiesa, Giglioli and Manzini, 1999)
Competence deepening
Competence fertilizing
Competence complementing
Competence refreshing
Competence destroying

40. Example of a Strategy Tool used in audits: S W O T Analysis
Strenght
Weakness
Opportunity
Threat
Internal
Analysis
External
Analysis

41. External analysis
Focuses on the identification of the value perceived by the customer and its evolution.
Demands could be not only the satisfaction of existing needs but also the creation or the explicitation of latent or non-articulated needs.

42. Internal analysis Identifying the competence and skill base
Benchmarking skills against other firms
(the breadth addresses the range of applicability of a certain skill, whereas the depth addresses the degree of appropriability of a skill)
Identifying the critical skills

43. SWOT (S) What are the strength areas? Where are the best performances?
Be realistic
Consider the views of
others
(W)
What could be improved?
What are the weaknesses?
What could be prevented?
Self-Assessment

44. SWOT (O) (T) What is the position of competitiors? changing markets
Changing technology
changing markets
changing government policies
changing life-style
What new opportunities arise?
(T)
What is the position of competitiors?
What are the risks of change?

45. STRENGTHS (S) 1. 2. 3.
4. List Strenghts 5. 6. 7. 8.
WEAKNESSES (W) 1. 2. 3.
List Weaknesses 5. 6. 7. 8.
Always leave Blank
OPPRTUNITIES (O) 1. 2. 3.
List Opportunities 5. 6. 7. 8.
SO STRATEGIES 1. 2. 3.
Use strengths totake
Advantage of opportunities 6. 7. 8.
WO STRATEGIES 1. 2.
Overcome
Weaknesses by taking
Advantage of opportunities 6. 7. 8.
THREATS 1. 2. 3.
List Threats 5. 6. 7. 8.
ST STRATEGIES 1. 2. 3.
Use strengths to
5. avold threats 6. 7. 8.
WT STRATEGIES 1. 2. 3.
Minimize weaknesses
And avoid threats 6. 7. 8.

46. Selection: Strategic choices
Identification
Gap analysis/
Value analysis
Business
strategy
Selection: Strategic choices
Operations plan
Development
Plan
Production plan
Exploitation plan
Acquisition plan
Marketing plan
Protection plan
Financial plan
Outputs
Implementation
Measurement and
evaluation
Learning