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Selection: Understanding Technology Evolution and Technology Strategy

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Presentation on theme: "Selection: Understanding Technology Evolution and Technology Strategy"— Presentation transcript:

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, 1990
2 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

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