Introduction Definition of Strategy Linking Technology & Business Strategies Significance of Strategy Formulating Technology Strategy Technology Innovation Leader

Appreciate technology as a strategy component of organizations Know how to develop a technology strategy Identify advantages and disadvantages being a leader in technology innovation

Effective technology management is based on successfully linking business and technology strategies The two strategies must be closely intertwined and highly integrated Technology – core of system designed to satisfy societal / customer needs Business – to gain a sustainable economic advantage that provides a competitive edge Blurred visions of the future Well-coordinated and focused organizations are more competitive

 Strategy o Plan that needs to be followed to compete and win – long term objectives o A broad formula of how an organization intends to succeed  Strategic Management – consisting of 3 important and interrelated components o Strategic planning o Strategic implementations o Strategic evaluation

First step toward integrating business and technology strategies is to get the business and technical sides of corporate management to agree on a common set of priorities. Integrating technology strategy and business strategy can be thought of as two sides of a coin: Either side is worthless without the other Framework for Formulation of Business and Technology Strategies

A number of generic questions that should be addressed by strategic planners on both the business and the technical sides: 1.To what extent is technology relevant to business? 2.Which business strategies require technology? 3.Where will we get it (the technology)? 4.What are our core technologies for the business? 5.In which technologies should we focus our research effort? 6.What new strategic options will technologies provide? Product AProduct B...Product N Required Technology 1 Relative Strength Required Technology 2 Relative Strength Required Technology 3 Relative Strength Product Technology Matrix To identify the relationship between products / services and the underlying technology

The Wheel of Competitive Strategy [Porter, 1980]A Model For Strategy Development

1.Identify the mission, vision and goals 2.Know the firm’s posture 3.Make aggregate project plan 4.Decide an acquisitions and organization 5.Make resource allocation 6.Lead the innovative effort 7.Set-up evaluation methods 8.Choose market entry strategy

1.Identify the Mission, Vision and Goals – Survive in competitive markets – efficient, competent and offer uniqueness  innovation – Organization without a strategy is like a body with a dead brain while an organization with poor strategy is like a sick patient – Core of the strategy is based on the vision, the mission and the objectives and goals that need to be realized ProfitabilityInnovationManager Performance and Development Physical and Financial Resources ProductivityMarket StandingWorker Performance and Attitude Public Responsibility

2.Know the Firm’s Posture – Examine the opportunities – within the firm, external to the firm, trajectories of technology ActionPostureRisk Continue with ExistingInactiveHigh ImitationReactiveLow IncrementalActiveMedium RadicalProactiveHigh Context in Which Competitive Strategy is Formulated

3.Make Aggregate Project Plan – Basic steps in constructing such a plan: a.Mapping the varying kind of development projects b.Making capacity decisions c.Make provision for gaining critical skills and capabilities 4.Acquisitions and Organization – Sources of technology available to business operation a.Within the business operation b.From the corporate or other company laboratories c.From outside the corporation

5.Make Resource Allocation – Size of resources allocation and approaches vary from firm to firm (budget for a new product development, NPD) a.Some company may encourage more number of projects with a hope to hit one or two (open end budget) b.Some companies may decide the frequency of new product introductions and work back (objective – task method) c.Some companies may relate the investment to their sales

6.Lead the Innovative Effort – Consideration in leading for innovation are: a.Innovation climate b.Innovation culture c.Right people d.Research as a team effort e.Product champions f.Performance appraisals 7.Set-Up Evaluation Methods – Measurable criteria are essential to assure benefits from innovation effort: a.Time – product or process introduction b.Cost

8.Make Market Entry Decisions – Divided into 3 categories: a.First movers (pioneer / leader) b.Early followers c.Late entrants (laggard) – To be first entrant – firm must posses the core capabilities required to produce the technology when needed – Intends to beat the earlier entrant to market with new version of this technology, it must have fast-cycle development processes

Advantages Brand loyalty and technological leadership Preemption of scarce assets Exploiting buyer switching costs Reaping increasing returns advantages Disadvantages Research and development expenses Undeveloped supply and distribution channels Immature enabling technologies and complements Uncertainty of customer requirements

Advantages Name recognition Large market share A chance to define the industry standard A head start on the learning curve Protective barriers High profit Delayed customer switching Favorable response by outsiders Disadvantages Huge costs Inflexibility Pricing problem Threat of competition