3Selection Processes 1 Technology audit 2 Forecast the technology 3 Analyse and forecast the environment4 Analyse and forecast the market/user5 Analyse the organization6 Develop the mission7 Design organizational actions8 ImplementationStrategicanalysisStrategicchoiceExploitation
7Technological innovation process is a result of: Inventions, discoveriesCreativitySerendipitousA function of economic demand and growthComplex and long process
8The 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).
9Technology 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.
10Technological Discontinuity Competence enhancing Competence destroying VariationTechnological DiscontinuityCompetence enhancingCompetence destroyingRetentionEra of FermentSubstitutionDesign competitionCommunity-drivenTechnical changeEra of Incremental ChangeElaborate dominant designArchitectural innovationSelectionDominant DesignA technology cycle.(Source: Tushman and Andersen, 1997)
11Competence-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.
14Strategic 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)
15Technologies 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.
16Strategy steps Internal & external analysis Planning Execution MissionVisionValuesStrategic goalsStrategyExecutionEvaluation and control
17And select appropriate MissionVisionEvulationİnternal factorsEvulationexternal factorsFormulationLong-andShort-termobjectivesGenerate,evaluate,And select appropriatestrategyEstablish functionalUnits,organizationalStructures and policiesImplementationSet plans of actionAnd schedulesAllocateresourcesDevelop performanceMeasures and rewardsystemsEvaluationEvaluateresultsFeedback
18Mission 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.
19VisionVision: Creativity and foreseeing the position of the firm in near future.Nike: To beat AdidasWal-Mart: To become 150 billion $ worth of by year 2002General Electric: To be number one or two in all markets where it has production and services.
20ValuesValues: Expectations and norms that affect the behavior of employees as well as their relationshipsWalt Disney:Believe in peopleDevelop and diffuse American-way of lifeCreativityConsistency and detail-focused
21Strategy goals Strategy goals needs to be: clear measurable aggressive but reachablewithin time-perspective
23Example of strategyStrategic goal: To become the biggest distributor for beauty products in IstanbulStrategies:To construct centers in Asian and European side of IstanbulTo increase distributor contracts with producersTo increase imported beauty productsTo increase sales personnel
24Strategy implementation Operational plansShort, medium, and long-term plansPeriodically reviewed - revisied if neededWritten action plansDiffusion into the organization
25Strategy evaluation and measurement Comparison with the goalsFinding the differences and their reasonsUpdating the plan if needed
27Strategy 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.
28Core competenceNot only performance improvement but also opportunity creation.Performance improvement includes quality, costs, cycle time, logistics, and productivity, whileopportunity creation consists of growth, new business and market development, strategic direction.
29Core 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.
30Source: Prahalad and Hamel, 1990 23456789101112Business1Business2Business3Business4Core product 2Core product 1Competence1Competence2Competence3Competence4Source: Prahalad and Hamel, 1990
313 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.
32Embedded 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.
33Core 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.
35Environmental scanning Business GoalsObjectivesAndNeed-drivenExpectationsOngoingimprovement inthe innovationand technologymanagement processEnvironmental scanninginnovations andcompetitiveassessmentTechnologyawerenessofmarketableinventionsInterventionInternal and external veritableTrade-off analysisJustification for new ideasCorrective action loopsTechnologyobsolescenceManaging theindividual andorganizationalconsequencesof technologyBusinessstrategyand planningProduct strategyScienceIndustry analysisFunctional strategyMarket andmanufacturinganalysisProductivityEmploymentQuality of workinglifeOrganizationalimpactHuman factorsProduct qualityTechnologyforecastingandplanningAssessment oftechnologyoutcomedimensionsTechnologydesigndevelopmentandadvancementTechnologyimplementations,project monitoring,and controlTechnologyAdoption andintroduction
36Types 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.
37Types of strategyPerforming better than competitors on an already existing dimension of competitionEstablishing a new dimension on which to competeCreating a new product/market combination
38T 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
39Some possible technology strategies: (source: Chiesa, Giglioli and Manzini, 1999) Competence deepeningCompetence fertilizingCompetence complementingCompetence refreshingCompetence destroying
40Example of a Strategy Tool used in audits: S W O T Analysis StrenghtWeaknessOpportunityThreatInternalAnalysisExternalAnalysis
41External analysisFocuses 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.
42Internal 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
43SWOT (S) What are the strength areas? Where are the best performances? Be realisticConsider the views ofothers(W)What could be improved?What are the weaknesses?What could be prevented?Self-Assessment
44SWOT (O) (T) What is the position of competitiors? changing markets Changing technologychanging marketschanging government policieschanging life-styleWhat new opportunities arise?(T)What is the position of competitiors?What are the risks of change?
45STRENGTHS (S)188.8.131.52. List Strenghts184.108.40.206.WEAKNESSES (W)1.2.3.List Weaknesses220.127.116.11.Always leave BlankOPPRTUNITIES (O)1.2.3.List Opportunities18.104.22.168.SO STRATEGIES1.2.3.Use strengths totakeAdvantage of opportunities6.7.8.WO STRATEGIES1.2.OvercomeWeaknesses by takingAdvantage of opportunities6.7.8.THREATS1.2.3.List Threats22.214.171.124.ST STRATEGIES1.2.3.Use strengths to5. avold threats6.7.8.WT STRATEGIES1.2.3.Minimize weaknessesAnd avoid threats6.7.8.