Integrating Technology and Strategy A General Management Perspective

Outline Introduction Key concepts concerning technological innovation and their interrelations The integration of technology with business and corporate strategy A framework for auditing and assessing the firm’s innovation capabilities Conclusion

Introduction To deal with issues of technology and innovation Key task of the general manager Acquire, develop, and allocate an organization’s resources Develop and exploit the firm’s capacity for innovation

Outline Introduction Key concepts concerning technological innovation and their interrelations The integration of technology with business and corporate strategy A framework for auditing and assessing the firm’s innovation capabilities Conclusion

Definitions Discovery and invention Technology Technical innovation We discover what before existed, though to us unknown; we invent what did not before exist. (Is it true/real?) Technology The theoretical and practical knowledge, skills, and artifacts that can be used to develop products and services as well as their production and delivery system. (Can it do the job?) Technical innovation Using technology to develop commercial products and services. (Can it do the job profitably?)

Technological Entrepreneurship Entrepreneurship is a fundamental driver of the technological innovation process. Technological entrepreneurship refers to activities that create new resource combinations to make innovation possible, bringing together the technical and commercial worlds in a profitable way. Technological entrepreneurship can involve one individual (individual entrepreneurship) or the combined activities of multiple participants in an organization (corporate entrepreneurship)

The Relationships among Key Concepts Concerning Technological Innovation Technical world Technological entrepreneurship Commercial world Administrative capabilities Invention/discoveries/technologies Technological innovation Research activities Development Product/process development Market Tinkering/ experimenting ＋ ＝ Results Activities

Outline Introduction Key concepts concerning technological innovation and their interrelations The integration of technology with business and corporate strategy A framework for auditing and assessing the firm’s innovation capabilities Conclusion

Integrating Technology and Strategy Perspectives on strategy Positive view --Actuarial strategy reflects management beliefs Normative view -- what the firm’s strategy should do Product-market view-- how the firm competes with its product Resource-based view -- how the firm secure the factors needs

Generic Strategy Overall cost leadership Overall differentiation Focus-segment cost leadership Focus-segment differentiation focus The areas of competition The way of creating the value

Technological policies Generic Strategy Overall cost leadership Overall differentiation Focus-segment cost leadership Focus-segment differentiation Technological policies Product technological change Product development to reduce product cost Product development to enhance quality Product development to support only enough performance Product design to meet exactly the needs of particular segment Process technological change Process development to enhance economies of scale Process development to support high tolerances Process development to tune production to segment needs Process development to tune production to segment need IBM Benetton

The Product / Technology Matrix Product A Product B ‧‧‧ Product N Technology 1 (*) Technology 2 Technology 3 ‧ ‧ ‧ Technology K

Developing the Technology Portfolio Bet Draw Warrant the firm’s full commitment Be positioned ambiguously Technology importance Cash in Fold Should be examined carefully Reconsider its investments Relative technology position

Matching Business & Technology Portfolios Attractiveness Importance B A A B Competitive position Position

Representative Technologies in a Firm’s Value Chain Transportation technology Material handling Basic product Machine tool Packaging Media Audio & video recording Diagnostic and testing Information system Inbound logistics Operations Outbound logistics Marketing sales Service

Technology Life Cycle & Competitive Advantages Importance of Technologies for Competitive Advantages Emerging Technologies Have not yet demonstrated potential for changing the basis of competition. Packing Technologies Have demonstrated potential for changing the basis of competition. Key Technologies Are embedded in and enable product/process. Have major impact on value-added stream. Allow proprietary/patented positions. Base Technologies Have minor impact on value-added stream; common to all competitors; commodity.

Outline Introduction Key concepts concerning technological innovation and their interrelations The integration of technology with business and corporate strategy A framework for auditing and assessing the firm’s innovation capabilities Conclusion

Innovative Capabilities Audit Framework The comprehensive set of characteristics of an organization that facilitate and support innovation strategies. Business Unit Corporate

Business unit structural Business unit strategic Business Unit Level Resource availability Understanding competitors’ innovative strategies and industry evolution Understanding business unit technological environment Business unit innovative strategies Business unit structural and cultural context Business unit strategic management capacity 8

Corporate Level Resource availability and allocation Understanding competitors’ innovative strategies and multi-industry evolution Understanding corporate technological environment Corporate innovative strategies Corporate structural and cultural context Corporate strategic management capacity

Outline Introduction Key concepts concerning technological innovation and their interrelations The integration of technology with business and corporate strategy A framework for auditing and assessing the firm’s innovation capabilities Conclusion

Conclusions Leadership