1. Design and Implementation of Technology Strategy: An Evolutionary Perspective

2. Technology Strategy Helps Answer Questions
Which distinctive technological competences and capabilities are necessary to establish and maintain competitive advantage ?
Which technologies should be used to implement core product design concept and how should these technologies embodied in products?
What should be the investment level in technology development?
How should various technologies be sourced—internally or externally?
When and how should new technology be introduced to the market?
How should technology and innovation be organized and managed ?
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3. Capabilities-Based Organizational Learning Framework of Technology Strategy
Exhibit 1
Technological
capabilities
Technology
strategy
Experience
Technology is a resource.
Technology strategy making
 an evolutionary organizational learning process
First
Next
Finally
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4. Technological Competence and Capability
Core competence
The collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies.
Three tests:
Potential access to a wide variety of markets.
Contribute to customer benefits.
Difficult to imitate.
Core competence vs. capability

5. Substance of Technology Strategy
Competitive strategy stance
Value chain stance
Resource commitment stance
Management stance
the deployment of technology
To position itself

6. 1. Competitive Strategy Stance
Technology choice
Design concepts
Physical implementation
Components
Architecture
Ex: fans, sports cars
Technology leadership / technology entry timing
Timing of commercial use
First mover / follower
Appropriability regimes
Control of specialized assets
儘管發展core competence花錢費力但還是應該做

7. 1. Competitive Strategy Stance
Technology licensing
Firms have to decide to market their technologies themselves or license out
5 reasons for technology license:
Not all technologies generated by a firm’s R&D efforts fit into its lines of business and corporate strategy.
Companies may need to consider licensing their technology to maximize the returns on their R&D investments, because patents provide only limited protection against imitation by competitors.
Smaller firms may be unable to exploit their technologies on their own because of the lack of money or complementary assets.
International market development for the technology may require licensing local firms because of local government regulation.
Antitrust legislation may sometimes prevent a company from fully exploiting its technological advantage on its own.
儘管發展core competence花錢費力但還是應該做

8. 2. Value Chain Stance Decide the scope of technology strategy
Firms should decide “make” or “buy” (outsourcing)
Core technology / peripheral
Make the decision based on its scale and its business focus
Economies of scale / scope, learning effects, synergies
Ex: GE
分工合作的概念

9. 3. Resource Commitment Stance
Depth of technology strategy
Depth of technology strategy can be expressed in terms of the number of technological options that the firm has available
Resource commitment determines the depth of technology strategy
The more resource, the more technological options the firm has
Ex: Cell phone 2G-3G

10. 4. Management Stance Organization fit
A science-based firm that has decided to be a technology leader for the long run probably needs to create a central R&D organization
Japanese firms use multiple layers of contractors and subcontractors in an external network to foster extreme forms of specialization in particular skills
已有既定策略，來決定分工的程度

11. Evolutionary Force Shaping Technology Strategy
Exhibit Determinants of technology strategy
Internal environment
External environment
Integrative mechanisms
Generative mechanisms
Strategic
action
Organizational
context
Industry
Technology
evolution
strategy
Evolutionary theory: variation-selection-retention
四個象限上面各打上一些重要的項目
Technology Evolution: (1)~(6)
Industry Context: (1)~(8) industry structure, complementary assets;
Strategic Action: inertia autonomous strategic action
Organizational Context: industry context exerts strong external selection pressures on the incumbent firms and their strategies; however, a key feature of established firms is that they have an organizational context that allows them, to some extent, to substitute internal for external selection. organizational context serves as an internal environment. organization culture and structure
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12. Technology Evolution Technology strategy Technology capabilities
Endogenous and exogenous effects
Different aspects of technology evolution have been discussed in the literature:
S-Curve
Dominant design
Product-process interplays
Technological change
competence enhancing
competence destroying
De-maturity
Disruptive technologies

13. Industry Context Industry structure (Porter’s five major forces )
Appropriability regime
Complementary assets
Increasing returns to adoption
Industry standards
Social systems aspects of industry development
Non-market forces: government

14. Strategic Action
Induced strategic action
Autonomous strategic action

15. Organizational Context
Organizational context serves as an internal selection environment
1.Induced process (sustaining innovation)
2.Autonomous process (disruptive innovation)
3.Balance 1 & 2
Organizational context takes shape over time and reflects the administrative approaches and dominant culture of the firm
The founders have lasting impact on the firm’s organizational context.
Ex: Foxconn (Hon Hai)

16. Applying the Framework: Research
Disruptive technologies (called substitutes in Economics)
Cannibalize existing technologies and undermine the strategic position of incumbent company
Ex: transistor, PC, magnetic disk drive
Organization rejection and recalcitrance
New entrepreneurial firm will find and pursue new customers

17. Applying the Framework: Practice
Consistency of strategic behavior:
Ex1: Crown Cork and Seal (CC &S)
Competencies / capabilities:
Technology evolution:
Strategic action:
Organizational context:
Industry context:
Experience
Ex2: Marks and Spencer (M&S)
Ex3: Banc One Corporation
Internal environment
Strategic
action
Organizational
context
Integrative mechanisms
Generative mechanisms
Technology
strategy
Technology
evolution
Industry
context
External environment

18. Applying the Framework: Practice
Problems arising when a change in study is not matched.
Ex1: National Cash Register Company (NCR)
EDP vs. Microelectronics

19. Experience through Enactment of Technology Strategy
Technology sourcing
Product and process development
Technical support
Technological
capabilities
Technology
strategy
Experience

20. Technology Sourcing Internal sourcing External sourcing
Depend on the firm’s R&D capacity
Ex: IBM (high-temperature superconductivity)
External sourcing
Through exclusive or preferential licensing contracts or through strategic alliances

21. Product and Process Development
Product and process development activities embody important aspects of the dimensions of technology strategy
Strike the delicate balance between
letting technology drive product development
allowing product development and/or market development to drive technology

22. Technical Support Two way flows of information are relevant
The function commonly termed field service creates the interface between
Firm’s technical function
The users of the firm’s product or services

23. Enactment Reveals Substance of Technology Strategy
Interactions among
Components of substance
Enactment in technology strategy making
Two conjectures
The substance of technology strategy should be comprehensive
Technology strategy should be integrated

24. Enactment Reveals Substance of Technology Strategy
Enactment (Modes of Experience)
Substance
External Technology Sourcing
Internal
Technology Sourcing
Product
Development
Process
Technical
Support
Competitive Strategy Stance
(Choice / leadership /
Entry timing / licensing)
Value chain stance
(Scope)
Resource commitment stance
(Depth)
Management stance
(Organizational fit)
Exhibit 3
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25. Conclusions
A capabilities-based organizational learning frame work of technology strategy
Determinants of technology strategy
Substance and enactment in technology strategy
Answer
Exhibit 1
Exhibit 2
Exhibit 3
Questions