Understanding Technology Development and Innovation: A Strategic Approach, Study notes of Business Management and Analysis

Download Understanding Technology Development and Innovation: A Strategic Approach and more Study notes Business Management and Analysis in PDF only on Docsity! 1 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 1 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 2 Chapter 17 ManagingTechnology and Innovation McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 3 Learning Objectives l After studying Chapter 17, you will know: l the process involved in the development of new technologies l how technologies proceed through a life cycle l how to manage technology for competitive advantage l how to assess technology needs l where new technologies originate and the best strategies for acquiring them l how people play a role in managing technology l how to develop an innovative organization l the key characteristics of successful development projects 2 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 4 Technology And Innovation l Technology l the methods, processes, systems, and skills used to transform resources into products l systematic application of scientific knowledge to a new product, process, or service l Innovation l a change in technology l process innovations - changes that affect the methods of producing outputs l product innovations - changes in the actual outputs themselves McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 5Steps In Technology Emergence, Development, And Replacement Demand for the technology Entrepreneurial initiative needed to pull elements togetherRequired resources are available Able to convert the knowledge into practice Knowledge to meet the demand is available McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 6 Technology And Innovation l The technology life cycle l a predictable pattern followed by a technological innovation starting from its inception and development to market saturation and replacement l cycle begins with the recognition that applied science can satis fy a need l knowledge and ideas brought together, culminating in a technological innovation l rate of product innovation tends to be highest in early years l dominant design emerges when early problems are solved l technology reaches upper limits of performance capabilities l the technology remains in mature stage until it is replaced 5 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 13Dynamic Forces Of A Technology’s Competitive Impact Innovation/dynamic competitive impact Ongoing development Complementary innovations Gradual diffusion McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 14 Assessing Technology Needs l Measuring current technologies l technology audit - process of clarifying the key technologies upon which an organization depends l most important dimension of a new technology is its competitive value l emerging technologies - still under development and unproven l may alter rules of competition in the future l pacing technologies - yet to prove full value l have potential to alter the rules of competition l key technologies - proven effective and offer strategic advantage l base technologies - are commonplace in the industry l offer little competitive advantage McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 15 Assessing Technology Needs (cont.) l Assessing external technological trends l several techniques used to better understand how technology is changing within an industry l benchmarking - process of comparing the organization’s technologies with those of other companies l important to consider practices of overseas competitors l focus is what is currently being done l scanning - focus is what can be done and what is being developed l emphasizes identifying and monitoring the sources of new technologies in an industry l extent of scanning determined by the importance of staying at the cutting edge of technology 6 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 16Framing Decisions About Technological Innovation l Anticipated market receptiveness l in the short run, there should be an immediate application that demonstrates the value of the new technology l in the long run, a set of applications must show the technology is the proven means to satisfy a market need l Technological feasibility l visions can stay unrealized for a long time l technical obstacles may represent barriers to progress l Economic viability l must be a good financial incentive for the new technology l development results in costs patents help to recoup the costs McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 17Framing Decisions About Technological Innovation (cont.) l Anticipated competency development l technological innovations are the tangible product of intangible knowledge and capabilities that make up the organization’s core competencies l firm’s must have (or develop) the internal competencies needed to execute their technology strategy l Organizational suitability l assess the fit of technological innovation with the organization’s culture and managerial systems l proactive” technology-push” innovators l defender - have a more circumspect posture toward innovation l analyzer - allow others to prove the viability of the technology McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 18Framing Decisions About Technological Innovation (cont.) Market Receptiveness - Assess external demand for the technology. Technological Feasibility - Evaluate technical barriers to progress. Economic Viability - Examine any cost considerations and forecast profitability. Competency Development - Determine if current competencies are sufficient. Organizational Suitability - Assess the fit with culture and managed systems. Cell phones, MP3, personal digital assistants (PDAs), HDTV, etc. Deep-sea oil exploration, physical size of PC microprocessors Solar fusion, fuel cell for automobiles, missile defense system Information technology in hospitals, digital technology in cameras Steel companies focusing on creativity and innovation Considerations Examples 7 McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 19Sourcing And Acquiring New Technologies l Each industry usually has specific sources for most of its new technologies l in many industries, however, the primary sources of new technology are the organizations that use the technology l make-or-buy decision l the question an organization asks itself about whether to acquire new technology from an outside source or develop it itself l Internal development - potentially advantageous to keep the technology proprietary l Purchase - most technology is available in products or processes that can be openly purchased McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 20Sourcing And Acquiring New Technologies (cont.) l Contracted development - contract development to an outside source l e.g., other companies, independent research laboratories l Licensing - when technology is not easily purchased, may be able to license it for a fee l Technology trading - may be used between rival companies l becoming increasingly common because of the high cost of developing advanced technologies independently l Research partnerships - each member enters the partnership with different skills or resources needed for successful new- technology development McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. 17 - 21Sourcing And Acquiring New Technologies (cont.) l Joint venture - have greater permanence l outcomes result in entirely new companies l Acquisition of an owner of the technology l outright purchase of the company that owns the technology l acquiring a minority interest to gain access to the technology