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
TM framework and Strategy
The major TM processes
Technological innovation process is a result of: Inventions, discoveries Creativity Serendipitous A function of economic demand and growth Complex and long process
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).
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.
Retention Variation Selection Technological Discontinuity Competence enhancing Competence destroying Era of Incremental Change Elaborate dominant design Architectural innovation Substitution Design competition Community-driven Technical change Dominant Design A technology cycle. (Source: Tushman and Andersen, 1997) Era of Ferment
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.
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)
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.
Mission Vision Evulation İnternal factors Formulation Evulation external factors 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
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.
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.
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
Strategy goals Strategy goals needs to be: clear measurable aggressive but reachable within time-perspective
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
Strategy implementation Operational plans Short, medium, and long-term plans Periodically reviewed - revisied if needed Written action plans Diffusion into the organization
Strategy evaluation and measurement Comparison with the goals Finding the differences and their reasons Updating the plan if needed
Strategy is the art of creating value (Source: Normann and Ramirez, 1993) Strategy is the art of creating value (Source: Normann and Ramirez, 1993) It allows a companys managers to identify opportunities for bringing value to customers and for delivering that value at a profit. 2 resources that matter in todays economy: * competence and * relationships (customer and supplier) Innovate: Not just add value but reinvent it.
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.
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.
123 Business 1 Core product 2 Core product 1 Competence 1 Competence 2 Competence 3 Competence Business Business Business 4 Source: Prahalad and Hamel, 1990
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.
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.
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.
Business Goals Objectives And Need-driven Expectations Business Goals Objectives And Need-driven Expectations Environmental scanning innovations and competitive assessment Environmental scanning innovations and competitive assessment Technology awereness of marketable inventions Technology awereness of marketable inventions Business strategy and planning Business strategy and planning Technology forecasting and planning Technology forecasting and planning Technology design development and advancement Technology design development and advancement Technology Adoption and introduction Technology Adoption and introduction Ongoing improvement in the innovation and technology management process Ongoing improvement in the innovation and technology management process Technology obsolescence Technology obsolescence Managing the individual and organizational consequences of technology Managing the individual and organizational consequences of technology Assessment of technology outcome dimensions Assessment of technology outcome dimensions Technology implementations, project monitoring, and control Technology implementations, project monitoring, and control Intervention Internal and external veritable Trade-off analysis Justification for new ideas Corrective action loops Intervention Internal and external veritable Trade-off analysis Justification for new ideas Corrective action loops Product strategy Science Industry analysis Functional strategy Market and manufacturing analysis Product strategy Science Industry analysis Functional strategy Market and manufacturing analysis Productivity Employment Quality of working life Organizational impact Human factors Product quality Productivity Employment Quality of working life Organizational impact Human factors Product quality
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.
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
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
Some possible technology strategies: (source: Chiesa, Giglioli and Manzini, 1999) Competence deepening Competence fertilizing Competence complementing Competence refreshing Competence destroying
Example of a Strategy Tool used in audits: S W O T Analysis Internal Analysis External Analysis S trenght W eakness O pportunity T hreat
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.
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
(S) (S) What are the strength areas? Where are the best performances? (W) What could be improved? What are the weaknesses? What could be prevented? Be realistic Consider the views of others Self-AssessmentSelf-Assessment SWOT
(O) Changing technology changing markets changing government policies changing life-style What new opportunities arise? (T) (T) What is the position of competitiors ? What are the risks of change? SWOT
Always leave Blank STRENGTHS (S) List Strenghts WEAKNESSES (W) List Weaknesses OPPRTUNITIES (O) List Opportunities SO STRATEGIES Use strengths totake 5.Advantage of opportunities WO STRATEGIES Overcome 4.Weaknesses by taking 5.Advantage of opportunities THREATS List Threats ST STRATEGIES Use strengths to 5.avold threats WT STRATEGIES Minimize weaknesses 5.And avoid threats
Identification Operations plan Development Plan Production plan Acquisition plan Exploitation plan Marketing plan Financial plan Implementation Measurement and evaluation Gap analysis/ Value analysis Selection: Strategic choices Outputs Business strategy Learning Protection plan