& Strategy Tools
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Technology Planning
Appropriate Technology
Tools for Company - Technology Analysis
Tools for Industry - Technology Analysis
Trajectories of Technology
• Explain the importance of planning for choosing
appropriate technology
• Describe the tools useful to analyze technology
changes and relevance at firm and industry level
• 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
• 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:
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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
Porter et al. (1991)
1. 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
2. Analyze and forecast:
a. The environment
 Identify key factors in the organization’s environment,
potential states of the environment, key uncertainties, major
threats and opportunities.
b. The market / user
 Analysis that identifies the current needs of major customers make on the organization’s products or services
c. The organization
 Delineate the major assets and problems; develop a catalog of
available human and material resources and assess recent
performance against stated objectives
Porter et al. (1991)
3. 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.
4. 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.
5. 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.
• 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
Distinctive
Technologies
Basic
Technologies
External
Technologies
Classification of technology as to
its relative standing in a product
Technology in a company (or in a product)
consists of 3 layers:
1. Distinctive technologies
– Gives an organization its unique
competitive
advantage
in
the
marketplace
2. 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
3. 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
A company’s strategy to integrate is made according to the direction of
integration desired.
a. Backward integration – occurs when a company seeks ownership or control of
its supplier
b. Forward integration – occurs when a company seeks to control distribution,
retailing and post manufacturing activities
c. Horizontal integration – involves increased control over production
competitors
d. 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
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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:
a.
Market-interface – advertising, selling, consulting
b. Infrastructure – MIS, training
c.
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
Company
Example
Honda
Motors
NEC
Telecommunications, semiconductors and mainframes
Motorola
Wireless communications
Boeing
Large-scale system integration, efficient design & manufacturing
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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:
1.
To determine current technological status
2. To stress areas of opportunity
3.
To take advantage of the firm’s strong capabilities
Analyze the technical and marketing competence necessary for strategic decisionmaking in product innovation.
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Helps innovators to think about 2 things:
i.
The levers they can pull in delivering utility to customers
ii.
The various stages in the ‘buyer experience cycle’
It provides:
i.
An objective evaluation of firm’s capability in the technology
ii.
A comparison of firm’s capabilities and those of its competitors, today and in
the future
iii. A forecast of the progress of technology
1. Technology Life Cycle
• Rival Technology and Substitution
• Investment Mode
• Impact of Process Innovations
• Multiple-Generation Technologies
• Competition Analysis
2. Product Life Cycle
Stage
Description
Embryonic
Technology has not yet demonstrated potential for creating a
new business or competition in the future (emerging)
Companies interested in this technology sector should monitor
emerging technologies
Growth
The new technology progresses demonstrating its potential for
changing the basis of competition (pacing)
Companies interested in being players in the technology arena
should consider investing selectively in pacing technologies
Maturity
Technologies that have a strong impact on the value-added
stream of performance, cost and quality (key)
Allow a company to develop a proprietary position in products
or processes
Aging
Technologies are considered commodities, usually available to
all competitors (base)
Companies should start divesting selectively while harvesting
the benefits – company must plan for innovations to survive
a.
Border crossings (national and sectorial)
– Increasing of science-technology articles with international coauthorship and also between academic and government
b. Emergence of complex technologies
– Fit to and cause from diverse demands, perspectives, approaches
and contexts
c.
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
• 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.