& Strategy Tools

1. BPT 3113 – Management of Technology & Strategy Tools

2. Chapter Outline • Technology Planning • Appropriate Technology • Tools for Company - Technology Analysis • Tools for Industry - Technology Analysis • Trajectories of Technology

3. Lesson Outcomes • Explain the importance of planning for choosing appropriate technology • Describe the tools useful to analyze technology changes and relevance at firm and industry level

4. Technology Planning • Technology planning is a central component of corporate business planning • The strategic planning time horizon may vary according to the organization’s objectives • Technology planning involves top-down, bottom-up and sideways participation • The outcome is scenarios that identify the technologies needed to achieve business objectives

5. Technology Planning • Strategizing should be creative and revolutionary while planning is systematic and follows established methodologies. • Strategies determines the formula by which the firm intends to win, planning charts the procedures and actions to be followed. • Process used in planning: • Examining all points of view in the organization • Setting clear realistic objectives • Charting a paths toward achieving those objectives • Obtaining commitment for execution • Executing and following up on the plan

6. Technology Planning Framework Porter et al. (1991) • Forecast the technology • This is starting point of technology planning • Project both internally owned technology and that available in the marketplace over the planning period • Analyze and forecast: • The environment • Identify key factors in the organization’s environment, potential states of the environment, key uncertainties, major threats and opportunities. • The market / user • Analysis that identifies the current needs of major customers - make on the organization’s products or services • The organization • Delineate the major assets and problems; develop a catalog of available human and material resources and assess recent performance against stated objectives

7. Technology Planning Framework Porter et al. (1991) • Develop the mission • Specify critical assumptions; establish overall organizational objectives and specific target objectives for the planning period and specify criteria by which to measure the attainment of those objectives. • Design organizational actions • Create candidate actions; analyze and debate them; develop a consensus strategy limited to a few key actions, possibly attendant on several key contingencies. • Put the plan into operation • Develop timely sub-objectives, if appropriate specify action steps, schedule and budget; develop tracking mechanisms and specify control mechanisms in case performance falls below established standards.

8. Appropriate Technology • A technology is considered ‘appropriate’ when: • It is in accordance with the development objectives • It is suitable to the surroundings for which it has been developed • Indicate a good match between the technology utilized and the resources required for its optimal use • Could be of any level – low, medium or high • Results in better use of labor resources and production efficiency

9. Strategy Tools For Company

10. 1. Analysis of Products & Technologies Technology in a company (or in a product) consists of 3 layers: • Distinctive technologies • Gives an organization its unique competitive advantage in the marketplace • Basic technologies (facilitate operations) • Technologies widely available to many organizations, essential for the development of a product but do not give it a distinctive advantage • External technologies (products can be outsourced) • Provide a third level of technological need. Have lower impact on the company’s competitive standing. More economically supplied by an outside vendor Classification of technology as to its relative standing in a product

11. 2. Value Chain Analysis A company’s strategy to integrate is made according to the direction of integration desired. Backward integration – occurs when a company seeks ownership or control of its supplier Forward integration – occurs when a company seeks to control distribution, retailing and post manufacturing activities Horizontal integration – involves increased control over production competitors Vertical integration - may combine backward, forward and horizontal integration where it involves ownership / control of activities over the entire value chain – achieve through mergers, acquisitions and takeovers

12. 3. Core Competencies Analysis • Need to determine which internal skills and disciplines are essential to the growth and survival of the business • Emphasis should be given to those areas where strengthened technical capability leads to improved business performance • Types of capabilities: • Market-interface – advertising, selling, consulting • Infrastructure – MIS, training • Technological – design, manufacturing • Example : • Creation of a product with unique value to customers • Permits managing operations in a uniquely efficient and effective way • Human knowledge or skill of an organization’s employees

13. 4. Technology Audit • Technology Audit is an analysis performed to identify the strengths and weaknesses of the technological assets of an organization • Continuous process of assessment • Its aim is to assess the firm’s position in technology in relation to its competitors and develop a base upon which technology strategy and associated plans can be formulated • Objectives of Technology Audit Model (TAM) are: • To determine current technological status • To stress areas of opportunity • To take advantage of the firm’s strong capabilities 5. Market-Technology (M-T) Matrix • Analyze the technical and marketing competence necessary for strategic decision-making in product innovation.

14. 6. Buyer Utility Map • Helps innovators to think about 2 things: • The levers they can pull in delivering utility to customers • The various stages in the ‘buyer experience cycle’ 7. Technology Road Map • It provides: • An objective evaluation of firm’s capability in the technology • A comparison of firm’s capabilities and those of its competitors, today and in the future • A forecast of the progress of technology

15. Strategy Tools for Industry

16. TLC – Rival Technology & Substitution

17. TLC – Investment Mode

18. TLC – Investment Mode

19. TLC – Impact of Process Innovations

20. TLC – Multiple Generation Technologies

21. TLC – Competition Analysis

22. Trajectories of Technology • Border crossings (national and sectorial) • Increasing of science-technology articles with international co-authorship and also between academic and government • Emergence of complex technologies • Fit to and cause from diverse demands, perspectives, approaches and contexts • IT Developments and Impact • Network of knowledge – integration of knowledge from different sources and domains across space and time • Learning and intelligent systems - exploring the human behavior in collaboration with machines • Computing challenges - exploit the numeric barrier

23. Summary • Technology planning is needed both at the corporate level and at the strategic business unit (SBU) level • A variety of tools are available for analyzing technology needs of an organization • Environmental analysis can be carried out to find technology trajectories with the help of scanning, monitoring and forecasting techniques.