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Introduction
Definition of Strategy
Linking Technology & Business Strategies
Significance of Strategy
Formulating Technology Strategy
Technology Innovation Leader
• Appreciate technology as a strategy component
of organizations
• Know how to develop a technology strategy
• Identify advantages and disadvantages being a
leader in technology innovation
• Effective technology management is based on successfully
linking business and technology strategies
• The two strategies must be closely intertwined and highly
integrated
 Technology – core of system designed to satisfy societal /
customer needs
 Business – to gain a sustainable economic advantage that
provides a competitive edge
Blurred visions of the
future
Well-coordinated and focused
organizations are more competitive
 Strategy
o Plan that needs to be followed to compete and win – long term
objectives
o A broad formula of how an organization intends to succeed
 Strategic Management – consisting of 3 important and
interrelated components
o Strategic planning
o Strategic implementations
o Strategic evaluation
• First step toward integrating business and technology strategies
is to get the business and technical sides of corporate
management to agree on a common set of priorities.
• Integrating technology strategy and business strategy can be
thought of as two sides of a coin: Either side is worthless
without the other
Framework for
Formulation of
Business and
Technology
Strategies
A number of generic questions that should be addressed by strategic
planners on both the business and the technical sides:
1. To what extent is technology relevant to business?
2. Which business strategies require technology?
3. Where will we get it (the technology)?
4. What are our core technologies for the business?
5. In which technologies should we focus our research effort?
6. What new strategic options will technologies provide?
Product A
Required
Technology 1
Product B
Relative
Strength
...
Product N
Relative
Strength
Required
Technology 2
Relative
Strength
Required
Technology 3
Relative
Strength
Relative
Strength
Product Technology Matrix
To identify the relationship
between products / services
and the underlying
technology
Realizing Mission and Vision
Focus on Right Technology
To Keep Abreast of Changes
To Take Advantage of Technological Innovation
Design &
Manufacturing
Purchasing &
Outsourcing
Human
Resources
Strategies of
Competition
R&D
Financial
Support
Distribution
Sales
Marketing
The Wheel of Competitive Strategy [Porter, 1980]
A Model For Strategy Development
1.
2.
3.
4.
5.
6.
7.
8.
Identify the mission, vision and goals
Know the firm’s posture
Make aggregate project plan
Decide an acquisitions and organization
Make resource allocation
Lead the innovative effort
Set-up evaluation methods
Choose market entry strategy
1. Identify the Mission, Vision and Goals
– Survive in competitive markets – efficient, competent and offer
uniqueness  innovation
– Organization without a strategy is like a body with a dead brain
while an organization with poor strategy is like a sick patient
– Core of the strategy is based on the vision, the mission and the
objectives and goals that need to be realized
Profitability
Innovation
Manager Performance
and Development
Physical and
Financial Resources
Productivity
Market Standing
Worker Performance
and Attitude
Public
Responsibility
2. Know the Firm’s Posture
– Examine the opportunities – within the firm, external to the
firm, trajectories of technology
Action
Posture
Risk
Continue with Existing
Inactive
High
Imitation
Reactive
Low
Incremental
Active
Medium
Radical
Proactive
High
Context in Which
Competitive Strategy is
Formulated
3. Make Aggregate Project Plan
– Basic steps in constructing such a plan:
a. Mapping the varying kind of development projects
b. Making capacity decisions
c. Make provision for gaining critical skills and capabilities
4. Acquisitions and Organization
– Sources of technology available to business operation
a. Within the business operation
b. From the corporate or other company laboratories
c. From outside the corporation
5. Make Resource Allocation
– Size of resources allocation and approaches vary from firm to
firm (budget for a new product development, NPD)
a. Some company may encourage more number of projects
with a hope to hit one or two (open end budget)
b. Some companies may decide the frequency of new product
introductions and work back (objective – task method)
c. Some companies may relate the investment to their sales
6. Lead the Innovative Effort
– Consideration in leading for innovation are:
a. Innovation climate
b. Innovation culture
c. Right people
d. Research as a team effort
e. Product champions
f. Performance appraisals
7. Set-Up Evaluation Methods
– Measurable criteria are essential to assure benefits from
innovation effort:
a. Time – product or process introduction
b. Cost
8. Make Market Entry Decisions
– Divided into 3 categories:
a. First movers (pioneer / leader)
b. Early followers
c. Late entrants (laggard)
– To be first entrant – firm must posses the core capabilities
required to produce the technology when needed
– Intends to beat the earlier entrant to market with new version of
this technology, it must have fast-cycle development processes
Advantages
Disadvantages
• Brand loyalty and
technological leadership
• Preemption of scarce assets
• Exploiting buyer switching
costs
• Reaping increasing returns
advantages
• Research and development
expenses
• Undeveloped supply and
distribution channels
• Immature enabling
technologies and complements
• Uncertainty of customer
requirements
Advantages
Disadvantages
• Name recognition
• Large market share
• A chance to define the
industry standard
• A head start on the learning
curve
• Protective barriers
• High profit
• Delayed customer switching
• Favorable response by
outsiders
•
•
•
•
Huge costs
Inflexibility
Pricing problem
Threat of competition