Chapter 7 of SBD
Chapter 1 of MTI
Technology
Is a complex term that includes art, science, engineering,
devices, methods, and know-how thet are applies in a
beneficial manner.
It usually take the form of product and processes that
can be used to create solutions.
In particulary it is true for hardware and software
applications.
Technology innovation
Is a subset of strategic technology management and the
systematic creation of new-to-the-world technologies
that are superior to their predecessors and the
improvements of exisisting technology platforms and
portfolios.
Strategic Technology Management
 Technological innovation is an important strategic issue today.
 Recently,
extensive analyses of automotive suppliers and industrial
manufacturers. The findings suggest there are considerable strategic risks
associated with the management of new technologies.
 Patented technologies and the ability to create value-added features using
those technologies are valuable differentiators which contribute to high profit
margins. However, technology that remains static can not maintain a premium
position in the marketplace.
example: As seen with anti-lock brake systems and airbags, even the most
advanced technologies will eventually become commodity items.
The market entry phase
New-technology suppliers should reinvest profits
from the current technology into the nextgeneration technologies.
In the innovation phase, suppliers should
strategically reposition the current technology to
focus on the emerging low-cost commodity phase.
Those who fail to recognize the different phases and
adjust their management approach over time will
suffer the consequences.
 Over the last five years, some well-known suppliers sold or spun-off
their automotive business units in the face of general underperformance, compared to non-automotive operations.
 Among them are A. O. Smith, Rockwell, Allied-Signal, ITT, United
Technologies and Cooper Industries.
 For conglomerates, divestiture of an unprofitable business is a luxury
that other suppliers do not have.
 These suppliers have no alternative: to improve or to die.
 If the 1990s was the decade of turmoil in the automotive industry, the
first decade of the twenty-first century will be one of survival.
 This is not a doomsday prophecy but simply a stricter application of the
Darwinian theory. As the competition extends and intensifies globally,
automotive suppliers should be more aware of the changes in the
environment in which they operate; accurately assess the implications
of those changes; and position themselves accordingly.
 The window of opportunity for a new technology is
considered to be about 10 years, depending on the
technology. Within this ten year window, there are
three product phases, namely:
 Phase 1 - Market Entry phase - rapid market
penetration to gain economies of scale
 Phase 2 - Innovation phase - technological change
to drive down cost while adding features
 Phase 3 - Commodity phase - process driven phase
where manufacturing cost control is essential for
survival
Strategic technology management
Managing technological change
Technology: couse or solution?
Technological forecasting and assessment
Stability or change?
Strategy for innovation
Technological innovation
Technology life cycle:
Is a time based theory of
technological change that
use the S curve to depict the
development and growt of a
technology
P
E
R
F
O
R
M
A
N
C
E
leveling
Exponential growth
introduction
TIME
Overview
Construct for managing change
Type of development projects
…changes…
Innovative strategic action
Creative strategic actions
Hierarchy of innovation and
integration
Convergence of balanced technological and
product attributes
Value
Quality
Low costs
Performance
Durability
Reliability
Comfort
Aesthetics
Esteem
Market
attributes
Market
Social
Technological
Economic
Environmental
Innovation
attributes
Ultra Clean
No Waste
Redploy
High Efficiency
Love Noise
Conservation
Recyclable
Lean
Stakeholder
attributes
What is
management of
technological
innovation and why
is it important?
MTI
R&D
EFFECTIVENESS
TECHNICAL
INVESTIMENT
NEW
PRODUCT
DEVELOPMENT
COLLABORATION
OPERATIONS
AND PROCESS
EFFICIENCY
BUSINESS
UNCERTAINTY
COMMERCIALIZATION
PROCESS
…
…see you next lesson!