Management-Of-Technology
Copyright  2001 Alex Coman
The ARENA Genome: Harmonic Strategic Planning
Refinement Stages:
Arena, Focus, Action
Create Strategy
Arena Layers:
Corporate,
Business
FunctionDefine Hierarchy
Corporate Layer:
Portfolio Businesses
Maximize Value
Business Layer:
Positioning Products by
Market Strategy
Business
ACTION
Function Layer:
Process, Project and Product
Agile value drive
Dynamic Vectors:
Change, Vision, Scenario.
Leader Navigates
Prof. Jacob A. Frankel, Chairman of Sovereign Advisory Group and Global Financial Institutions Group,
Merrill Lynch: JIT inventory management will help quick recovery.
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Skimming (Type I disruptive Innovation)
Focus: Returning R&D investment, Constrained production capacity, Limited demand
P III
486
Cost
Athlon P IV
$819->$352
Power PC
Diversification,
Cow Cannibalization
Adoption Rate
Utility
Capacity
Learning Curve
Moor’s Law
Gillette
Costs-4%/Y
Time/
Quantity
D
Sony
Beta
Chasm
Ampex
$50K
Skim
Niche Distributors
Cost
$
D
Niche
Products Satellite
Beeper Iridium`
Pelephone
Advantage
Cyrix K6
Celeron
$
Cellcom
D
Cell Phone
Orange
$
VCRs
Matsushita
VHS
PC Processors
Mass
Market
Follower
IBM
Leader
Effect
Hong Kong
Effect
Time/
Quantity
Hedged Skimming:
Tang, RDC, Velcro
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Storming
Focus: Maximizing revenues during patent duration; Rigid demand
Storming
Pharmaceutical
$
D
Divide
2.
Generic
Storming
Storming
$
D
$
D 2.Follower: IBM effect
3.
Open Architecture
Sensor
Me
Too:No
Name
Mach3
Outsourcing
Excel
1.
Hong
Kong
Effect
Compaq
+35%
Ethical (+60%)
Devoted Follower
Viagra
Prozak Atra
1.Leader: Apple
Closed Architecture
Self sufficient
Price
Motorola
Intel
Patent
1st
50%
2nd
50%
Time
Mac OS
Apple
Apple
SW
Computer Peripherals
Apple
Distributors
MS, Lotus
IBM
DOS/SW Computer Peripherals
Digital
HP
IBM++ Compaq
Dealers
IBM Cluster
Education
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Business
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Flooding
Focus: Market share leadership (Eyeballs, Hits); Lock-in+Oligopoly+Value added
Flooding
Ford
Levittown
Diners’
Zara
IKEA
McDonalds
2.Toyota
Honda
$
D
Sony: $279+
RealNetworks Dumping
Nintendo: Dolphin $
D
IBM+3D by ArtX
MS Xbox
$299.99
($125)
Launch:
800K games,
1.5M@2001
$500M marketing budget
Hybrid Car
Dumping
$
D
Leveraged
Dumping
$
D
1. Server
Navigator
Acrobat
Economies of Scale
Utility/User
Total Cost
Bob Metcalf’s
1.IBM
White planes
1. Client
Navigator
2.
Explorer
NT
Sony
Users
Network Externalities
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Market consolidation
# Competitors
1918
Model T
March 1999, 50B Mins: 11 sites (60%=110)
March 2001, 73B Mins: 4 sites (60%= 14)
32% America Online Time Warner
7.5% Microsoft
7.2% Yahoo
3.6% Napster
Disk drive Market
Competitors
10
0
80
Oil Foreign
Crisis
1/3
Web surfing in US, 50% of time:
60
40
20
1980
1982
1984
1986
1988
1990 1991
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Low Cost Positive Loop
Differentiation Low
Cost
Market Demand:
3
Price Elasticity
Price
Cost/unit
Production Function:
Economies of Scale
2
1:Skimming
5
Dumping
Quantity
Sold
4
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Quantity
Manufactured
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Piercing / Guerilla (Type II disruptive Innovation)
Focus: Penetrating through niche, transforming non-entity into recognized brand
S.E. Asian Guerilla
Linux Guerilla
$
D
$
D
2.Red Hat
1.Shareware
Copy Left: Gnu, Ada
Komatsu
Toyota, Korean
Dependable-Quality Earth-Moving-Equipment
Strong service and Support
Worldwide Availability
Strong, Loyal
Full Line of
Dealer Network Quality Products
High
Retail Margins
R&D
Investment
Low
Dividends
Local
Assembly
High Plant
Investment
Low
Debt High
Margins
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Global Premium
Volume
Price
Low
Cost
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ARENA
Management-Of-Technology
Copyright  2001 Alex Coman
Business Action: Komatsu’s strategic Roll-out – Skinning the Cat
Maru-C: “Encircle Caterpillar”
Protect home market against Caterpillar (’81:50% world earth-moving equipment vs.16%)
Licensing deals with: Cummins Engine, International Harvester.
Acquire technology and establish benchmarks.
Project Ace: Advance quality of small and medium-sized bulldozers above Caterpillar’s
Quality Circles companywide to provide training for all employees
Reduce cost while maintaining quality
Cost Down
Total Cost Down
Make Komatsu an international enterprise and build export markets
Develop Eastern bloc countries
Komatsu Europe marketing subsidiary established
Komatsu America established
Project B to improve durability and reliability and reduce cost of large bulldozers
Project C to improve payloaders
Project D to improve Hydraulic excavators
Establish presale and service department to assist construction projects in newly
industrializing countries
Respond to external shocks that threaten markets
V-10 program to reduce costs by 10%; reduce parts by 20%.
¥180 program to budget companywide for ¥180/$ when exchange rate was ¥240/$
Response to Oil Crisis: Project E establish teams to redouble cost and quality efforts.
Create new products and markets
Accelerate product development to expand line.
Future and Frontiers program to identify new businesses based on society’s needs
and company know-how.
EPOCHS: reconcile greater product variety with improved production efficiencies.
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ARENA
(’84:Caterpillar=43%
world earth-moving
equipment vs.Komatsu=25%)
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action
How Has Compaq Stayed on Top of the Server Industry?, HBR
High
ProLiant 1000 ProLiant 1000
ProSignia
Rack Mountable
SystemPro
Relative
Level
Low
1990
1991
1992
1993
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1994
Time
Security
Servicability
Storability
Price
Performance
File and Print Compatibility
Application Compatibility
Expandability
Manageability
Configurability
Reliability
Price
Performance
File and Print Compatibility
Application Compatibility
Expandability
1989
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Strategic Grid
US Office of Patents commissioner: “Everything that can be invented has been invented”,
1899 recommendation that his office be abolished.
High
Factory
Strategic
Present
ATM, Airline
Strategic
Impact of
Support
Technology Low Restaurant, Municipality,
Strategic Grid
Turnover
Hospital
Bookstore, Insurance,
Broker
Low
High
Future
Strategic Impact of Technology
Window of
Opportunity
Importance
Importance
Strategic
Support
Bank
Time
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Time
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Qualcomm 1999 annual Report p. 23
Mobile-Station-Modem Phone Chipsets
Features
6th Generation MSM
50% Smaller; 300Hrs Sand by
Mixed signal; USB data interface
MSM3100
MSM5000
2x voice capacity
Faster data rates<153.6kbps
iMSM Family
High Data Rate technology<2.4Mbps
Internet; support3rd party OS/Apps
1st Generation MSM
R&D begins
90
91
5th Generation MSM
200 hours standby
Faster data rates<86kbps
IS-95A/95B Compliant
MSM3000
4th Generation MSM
Highly cost effective
MSM2300
3rd Generation MSM
Used in QCP800 phone
MSM2
2nd Generation MSM
Chipset Developed
MSM1
92
93
94
95
96
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97
98
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Time/
99 Release
ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Wave PLM
Features/
Function Points
NT: Most Demanding Tasks
User/Info Dir, Intelli-mirror
NT4.0: Large Data Proc.
Windows CE
1997 update: Cluster
1.6M copies
NT3.51: Web Server
No need for special SW
NT3.5: Faster, Stable
2000: Premium,
SOHO
Professional,
93 NT3.1: 32 bit
Small Business
29K copies
98: HTML editor
95: TCP/IP
Apr 92: Win 3.1: Screensaver,
TrueType
Mar 93:MS-DOS 6
5
Disk
Backup & Compression
4.1
88: DOS 4
92
93
94
95
96
97
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98
99
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00 Time/Release
ARENA
Management-Of-Technology
Copyright  2001 Alex Coman
Business Action: Float-glass process substitution W.Europe
%
%
%
%
%
%
%
%
%
%
%
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ARENA
Copyright  2001 Alex Coman
Management-Of-Technology
Business Action: Supply/Demand Chasm
Development Cycle (years)
20Typical Time Horizons by Industry, Mid-to-Late 1980s
Transportation
Systems
Communications
Systems
16
12
Military
Weapons
Forestry, Oil &
Gas Reserves
Pharmaceuticals
Biotechnology
Chemicals,
Mining
8
Paper
Photographic
Metal Products
Automobile
Medical&Dental
Lodging
4
Computers
Hotels
Fashion &Electronics Publishing
Foods
TextilesSoftware
Silicon
Retailing&EntertainmentTobacco
Foundries
00
8
16
4
12
20
Financial
Approximate
Life
Cycle
of
Products
(years)
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ARENA