406 – Technology Competition and Strategy

1. Technology & Competition: Competitive Domains, Competitive Consequences of Technological

Change – Creation of New Products, Changes in the Value Chain, Changes in the Value
Constellation, Competitive Rivalry. Technological Characteristics of Competitive Domains –
Technological Opportunity, Appropriability, Resource Requirements, Collateral Assets, Institutional
Milieu, Speed. Dynamics of Change in the Competitive Domain – Technology Emergence Phase,
Incremental Change Phase. Framework for Analysis of Technology Emergence, Influence of
Environmental trends on competition. Technology as critical to Business Outcomes – Technology
Strategy and Technology Leadership. (5+1)
2. Technology Intelligence: Signals of New Technology, What is Technology Intelligence, Importance
of Technology Intelligence, Levels of Technology Intelligence, External versus Internal Technology
Intelligence. Mapping the Technology Environment – Steps in Mapping, Mapping the Macro-level
and Industry Level Environment. Mechanisms for Data Collection – Challenges, Organizational
Arrangements and Key Principles for Data Collection. Contemporary Challenges in Mapping the
Technology Environment. (5+1)
3. Business Strategy and Technology Strategy: Business Strategy , Strategic Analysis and Decision
Making using Product Evaluation Matrix, Market-Growth- Market-Share Analysis Matrix, X-Y
Coordinating Method, M-by-N Matrix, SWOT Matrix, Formulation of Technology Strategy, Core
Competencies, Exploitation of Core Competencies, Integration, Linking Technology & Business
Strategies, Creating the Product-Technology-Business Connection. Technology’s Interface with –
Market, Customers and Suppliers. Customer-Supplier and Product-User relationships. (5+1)
4. Technology Strategy Choice: Technology – Business Connection, Domains of Technology Choice,
Linkages between Technology Choice and Competitive Advantage, Technology Strategy Definition,
Role of Chief Technology Officer, Key principles underlying Technology Strategy – Objectives,
Drivers, Decision criteria. Technology Strategy Types – Appropriateness of the Technology Strategy
Types, Diversified Firms, A Framework for formulating Technology Strategy – Strategic Diagnosis,
Formulation of Technology Strategy, Crafting and Implementation Approach, Execution. Technology
Strategy – Superior Performance Characteristics. Accountability to various Stakeholders,
Performance Measurement. (5+1)
5. Technology Strategy – Collaborative Mode: Collaborative Arrangements – Definitions, Trends,
R&D Alliances, Marketing Alliances, Outsourcing Alliances, Collaboration between small and large
firms, Strategic and Operational Reasons for Collaborative Arrangements. Collaborative
Arrangements in the domain of Technology Strategy – Appropriation of technology, Deployment of
technology in New Products, Deployment of technology in the Value Chain, Marketing of
technology. Risks of Collaborative Activity – Intellectual Property Right Risk, Competitive Risk,
Organizational Risk. Cases on R & D Collaborations, Global Technology Alliances. The form of
Collaborative Arrangement. (5+1)

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Chapter 1 : Technology & Competition

Competitive Domains :- Competitive domain refer to arenas where multiple firms compete for the hearts
and minds of customers. In many instances, industries constitute the primary competitive domains of
technology.

Competitive Consequences of Technological Change :-

FOUR clusters of consequences evolve from technological change:-
1. Creation of new product - New product represent arguably the most visible battleground in the
marketplace. Product improvement (incremental and modular innovations), architectural innovation,
radically new product, and technology convergence, are the manifest ways that product competition
evolves.
Product Improvements:- Product improvement have helped firms extend the market reach of their
products.
Architectural innovation:- Architectural innovation provide opportunities to serve previously untapped
market segments and enable firms to change their competitive position.
Radically New Product:- Technological innovation sometimes spawns totally new products.
Technology Convergence:- Technology integration leads to convergence. For example, convergence
is now taking place in the computer, telecommunications, and entertainment to converge to form an
“information industry”.
2. Change in Value chain - Technological changes enable firms to reconfigure their value chains, thus
influencing the cost and speed of doing business. We may identify two ways in which value chains are
transformed: Automation, and Reconfiguration of process.
a. Automation - Automation refers to the replacement of labor with less expensive capital-intensive
technologies. Automation has been an ongoing phenomenon in developed countries during the
twentieth century, with capital-intensive equipment and machinery replacing blue-collar job.
b. Reconfiguration of process - Firm also reconfigure their value chains by introducing superior
processes into their operations. Superior processes may evolve from technology progression or
technology evolution.
3. Change in Value constellation - The value constellations (IN: tatanan nilai) of firms are often upset
by technological developments in three ways:
Shifting balance of power:- technological developments shift the balance of power between firms
and their suppliers and distributors.
Potential for outsourcing:- As a result of the market forces and the standardization of production
processes, firms are discovering opportunities to outsource many activities that had hitherto been
conducted in-house.
Different ways of managing value constellation:- Better manage their supplier and distributor
relationship.
4. Competitive rivalry - Product and process innovations are two means by which the competitive game
is played and won.
These innovations enable firms to
a. erect entry barriers to competitors
b. to bring about product and process substitution
c. to redefine the rules of competition.

Technological Characteristics of Competitive Domains :–

Six characteristics of competitive domains influence the rivalry:

1. Technological Opportunity - Technological opportunity, refer to the degree to which innovation

potential exists in an industry.

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 2. Appropriability - Appropriability, refer to the degree to which the potential economic benefits from
an innovation can be appropriated by the firms engaged in technology development.
3. Resource Requirements - Resource requirement. Competitive domains differ in the magnitude of
resource commitments required to bring about an innovation. Competitive domains differ in terms of
the resources flowing into technology development. Competitive domains differ vastly in terms of
their resource requirements and commitments.
4. Collateral Assets - Collateral assets, of competitive domains is the need and availability of collateral
assets for an innovation to yield a firm competitive advantage.
5. Institutional Milieu - Institutional milieu. In many competitive domains, technology-based rivalry
gets enacted not merely in the marketplace but in the institutions that are linked to the technology, as
well. Three sets of institutional players: market participants, nonmarket institutions, enabling
institution.
6. Speed - Competitive domains also differ in terms of the speed of execution they demand of competing
firms. Speed refers to the velocity of change in a competitive domain that sets the pace of the internal
operations of the competing firms.

Dynamics of Change in the Competitive Domain :–

Technology change can create turbulence as well as predictable incremental change in competitive domains:
During certain periods, radical innovations create upheavals within an industry, and the patterns of technology
change drive the evolution of competitive domains. During other periods, we witness predictable evolution of
technology when existing characteristics of industries exert a major influence on technology development.
These two periods correspond respectively to the two types of innovation identified by Joseph Schumpeter:
entrepreneurial innovation and managerial innovation.

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Technology Emergence Phase:- The first phase of Technology Emergence is characterized by Intense
Competitive Rivalries among firms, which eventually culminates in a Dominant Product Design.

1. Technical uncertainty - during the early stages of a radical innovation, its functionality is unreliable and
undeveloped.
2. Market uncertainty - because the diffusion process has not actually begun at this stage, there will be
few buyers, and competitive avenues will need to be explored by firms interested in commercializing the
innovation.
3. Key time periods - a. Appearance of technological discontinuity; b. Era of ferment; c. Emergence of
dominant design.
4. Role of technological communities - a. Regulatory bodies; b. Trade associations; c. Scientific advisory
boards.
5. Response of threatened industries – a. Not participate in the development of the new technology.
b. Participate in the new technology in some manner.

Incremental Change Phase:- The incremental change phase is characterized by the Increasing need for
Market-Pull strategies. Product versus process innovation: as the rate of product innovation decreases
during the incremental change phase, a corresponding increase in the rate of process innovation occurs.

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Framework for Analysis of Technology Emergence

1. Environmental Components:-
a. Institutional arrangements - regiment, regulate, and standardize a new technology.
b. Public resource endowments - are critical to the development of almost every technological innovation:
1) Advancements in basic scientific or technical knowledge
2) Financing and an insurance mechanism
3) Pool of competent human resources
c. Technical economic activities.

2. Managerial Challenges in the Development of a Radical Innovation

a. Set of forces to be tracked by the firm
b. Strategic uncertainties facing the firm
c. Need to compete in technological communities

Influence of Environmental trends on competition

a. It enables the firm to identify opportunities and getting the first mover advantage.
b. It helps the firm to identify threats and early warning signals.
c. It helps in tapping useful resources.
d. It helps in coping with rapid changes.
e. It helps in assisting in planning and policy formulation.
f. It helps in improving performance.

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 Impact of Government policy changes on business and industry: The government policy of
liberalization, privatization and globalization has made a definite impact on the working of
enterprises in business and industry in terms of
(a) increasing competition
(b) more demanding customers
(c) rapidly changing technological environment
(d) necessity for change
(e) need for developing human resource
(f ) market orientation
(g) loss of budgetary support to the public sector.

Technology as critical to Business Outcomes – Technology Strategy and Technology Leadership

Technology has important effects on business operations. No matter the size of your enterprise,
technology has both tangible and intangible benefits that will help you make money and produce
the results your customers demand. Technological infrastructure affects the culture, efficiency
and relationships of a business. It also affects the security of confidential information and trade
advantages.

1. COMMUNICATION WITH CUSTOMERS

First and foremost, technology affects a firm’s ability to communicate with customers. In today’s busy business
environment, it is necessary for employees to interact with clients quickly and clearly. Websites allow customers to
find answers to their questions after hours. Fast shipment options allow businesses to move products over a large
geographic area. When customers use technology to interact with a business, the business benefits because better
communication creates a stronger public image.
2. EFFICIENCY OF OPERATIONS
Technology also helps a business understand its cash flow needs and preserve precious resources such as time and
physical space. Warehouse inventory technologies let business owners understand how best to manage the storage
costs of holding a product. With proper technology in place, executives can save time and money by holding
meetings over the Internet instead of at corporate headquarters.
3. BUSINESS CULTURE AND CLASS RELATIONS
Technology creates a team dynamic within a business because employees at different locations have better
interactions. If factory managers can communicate with shipment coordinators at a different location, tensions and
distrust are less likely to evolve. Cliques and social tensions can become a nightmare for a business; technology
often helps workers put their different backgrounds aside.
4. SECURITY
Most businesses of the modern era are subject to security threats and vandalism. Technology can be used to protect
financial data, confidential executive decisions and other proprietary information that leads to competitive
advantages. Simply put, technology helps businesses keep their ideas away from their competition. By having
computers with passwords, a business can ensure none of its forthcoming projects will be copied by the competition.
5. RESEARCH CAPACITY
A business that has the technological capacity to research new opportunities will stay a step ahead of its competition.
For a business to survive, it must grow and acquire new opportunities. The Internet allows a business to virtually
travel into new markets without the cost of an executive jet or the risks of creating a factory abroad.

Technology Strategy:- Technology strategy (information technology strategy or IT strategy) is the overall plan
which consists of objectives, principles and tactics relating to use of technologies within a particular organization.
Such strategies primarily focus on the technologies themselves and in some cases the people who directly manage
those technologies. The strategy can be implied from the organization's behaviors towards technology decisions, and

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may be written down in a document. The strategy includes the formal vision that guide the acquisition, allocation,
and management of IT resources so it can help fulfill the organizational objectives.
Other generations of technology-related strategies primarily focus on: the efficiency of the company's spending on
technology; how people, for example the organization's customers and employees, exploit technologies in ways that
create value for the organization; on the full integration of technology-related decisions with the company's
strategies and operating plans, such that no separate technology strategy exists other than the de facto strategic
principle that the organization does not need or have a discrete 'technology strategy'.
A technology strategy has traditionally been expressed in a document that explains how technology should be
utilized as part of an organization's overall corporate strategy and each business strategy. In the case of IT, the
strategy is usually formulated by a group of representatives from both the business and from IT. Often the
Information Technology Strategy is led by an organization's Chief Technology Officer (CTO) or equivalent.
Accountability varies for an organization's strategies for other classes of technology. Although many companies
write an overall business plan each year, a technology strategy may cover developments somewhere between 3 and
5 years into the future.

Technology Leadership - Technology leaders are developers (specify and build systems), commercializers (figure out
how to make profits), and stewards (get systems built and employed) of technology in an organization.
A technology leader is not only responsible for delivering products, but they ensure the presence of an effective
technology-driven ecosystem. When a company misses on important technological inflection points, they are held
accountable
The role of leaders with technical competence is evolving for businesses. They:
 Understand technology life cycle.
 Have know-how of consumer persona.
 Are a critical link between technology and strategy.
 Assess, manage, and forecast technological innovations, and assist technology transfers.
 Are a unifier between people and processes. They are willing to cross-functional silos to seek progressive ways
to use technology and data.
 View technology as a core aspect of business at all levels, and not just as company’s products or R&D activity.

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Chapter 2 : Technology Intelligence

Technology Intelligence (TI) is an activity that enables companies to identify the technological
opportunities and threats that could affect the future growth and survival of their business. It aims
to capture and disseminate the technological information needed for strategic planning and
decision making. As technology life cycles shorten and business become more globalized having
effective TI capabilities is becoming increasingly important.

What is Technology Intelligence?

Technology Intelligence can be defined as the capture and delivery of technological information
as part of the process whereby an organisation develops an awareness of technological threats and
opportunities.
The Internet has contributed to the growth of data sources for technology intelligence and this is
very important for the advancement of technology intelligence.
Technology Intelligence has been conceived as a capacity that allows identifying technology
developments in time, and moreover, it comes up as a model that links the necessities of the
market to technology innovation. In this way, it allows to differentiate among technology fields in
use and those of interest that can be limited through future functions of the product and the weak
signals in technology trends. Its main operative function is to capture and give information to
develop knowledge about technology threats and opportunities.

Importance of Technology Intelligence?

Technology intelligence gives organizations the ability to be aware of technology threats and
opportunities. It is important for companies and businesses to be able to identify emerging
technologies in form of opportunities and threats and how this can affect their business. In the
past two decades, there has been massive growth in the amount of products and services that
technology has produced and this is because it is a lot easier and cheaper to acquire and store data
from different sources that can be analyzed and used in different industries.
Companies install an intelligence system(technology, market, business or competitive
intelligence) to collect and analyze information on market, product and technology changes and
on other environmental transformations in order to increase their decision making quality and
competitiveness.

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Levels of Technology Intelligence:-
The three levels of Technology Intelligence are-
1. Macro Level - Refers to Broad Technology Trends and developments which can influence
entire economy or major sectors.
2. Industry or Business Level - refers to Technology trends and factors that affect or are likely
to affect specific Industries or businesses.
3. Program or Project Level - refers to technology related factors for a Specific Technology-
related program or project.

The above three levels differ in terms of Breadth of Technology, Clarity of Trends and Degree of
Precision of Trends

External versus Internal Technology Intelligence:-

1. External Technology Intelligence - External focuses on developments taking place outside a

firm. This is also known as Technology Mapping.
2. Internal Technology Intelligence - Internal focuses on projects and technologies within the
firm. It is also known as Technology Audit.

Mapping the Technology Environment:-

Mapping technology environment refers to the process of gathering external data and analyzing it
to derive the intelligence for major strategic decisions. Technology mapping is a concept that
combines innovation and communication in the technology management field. External
technology intelligence is called technology mapping.
Technology mapping is used to support strategic decisions and long-range planning. In addition,
it provides a way for companies to explore the future and to scan the environment and also a
method in which companies can track the performance of individuals.

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 Steps Involved in Mapping Technology Environment
1. Scanning the environment to detect ongoing and emerging changes
2. Monitoring specific environmental trends
3. Forecasting future environmental changes
4. Assessing current and future environmental changes for their impact on organizational
strategy.

Mapping the Macro-level and Industry Level Environment:-

1. Macro-level environment
The features of the technological environment have four Major implications for the tasks of
intelligence gathering:
a. Data sources for intelligence are many and indeed in some cases personal rather than
impersonal sources.
b. Communication with differing experts is necessary for intelligence gathering.
c. Significant time lag between appearance of basic research findings and applied
applications.
d. Only some of the technological changes are predictable.

2. Industry-level environment
a) Capacity-driven industries
b) Consumer-driven industries
c) Knowledge-driven industries

Two major differences between intelligence gathering at Industry-level and Macro-technology

environment:
a) Experienced industries will have developed information sources for data gathering, making
data gathering easier in some instances than in the macro-level environment.
b) Intelligence gathering is particularly important to medium-term strategy decisions.

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Mechanisms for Data Collection – Challenges, Organizational Arrangements and Key
Principles for Data Collection:-

1. Challenges of Data Collection

 Early stage technologies -
a) Effort is required to locate these sources of data.
b) Specialists use technical jargon, making communication difficult.
c) Technology developments are frequently shrouded in secrecy and deemed confidential.
d) Standard formats for data collection may not exist.
 Mature technologies - Much more easily available Macro-level R&D data often
available at the national level.
 Sources for technology intelligence -
a) Characteristics of the data: personal versus impersonal.
b) Proximity: directly from a technology developer or indirectly from a technology
facilitator.

2. Organizational Arrangements for Gathering Data

a. Time frame of data collection.
b. Level of commitment of a firm to the technology of intelligence gathering.

3. Key Principles for Data Collection

a. Data collection should be guided by the kind of decision for which technology intelligence
is sought.
b. Scanning of what's in the technological arena should have an investigative element.
c. Analyst should focus not merely on those engaged in technology development, but also
facilitators of technology development.
d. Choice of mechanism will depend on the importance attached by a specific firm to
technology intelligence.

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Contemporary Challenges in Mapping the Technology Environment:-
1. Globalization - The scope of gathering intelligence should mirror the globalization of
technology development.
2. Time Compression - Intelligence gathering efforts should be frequent to spot fast
developments and rapid changes taking place in the technological environment.
3. Technology Integration - Because technological changes are not always predictable,
scanning is perhaps the key to understanding the technological environment. Surprises
unearthed during scanning may require immediate action by the firms, skipping the stages of
monitoring and technology forecasting.

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Chapter 3 : Business Strategy and Technology Strategy

Business Strategy :-
Business strategy is a clear set of plans, actions and goals that outlines how a business will compete in a
particular market, or markets, with a product or number of products or services. Business strategy can be
understood as the course of action or set of decisions which assist the entrepreneurs in achieving specific
business objectives. A business strategy is a set of competitive moves and actions that a business uses to
attract customers, compete successfully, strengthening performance, and achieve organisational goals. It
outlines how business should be carried out to reach the desired ends.
Levels of Business Strategy:-
1. Corporate level strategy: Corporate level strategy is a long-range, action-oriented, integrated and
comprehensive plan formulated by the top management. It is used to ascertain business lines,
expansion and growth, takeovers and mergers, diversification, integration, new areas for investment
and divestment and so forth.
2. Business level strategy: The strategies that relate to a particular business are known as business-level
strategies. It is developed by the general managers, who convert mission and vision into concrete
strategies. It is like a blueprint of the entire business.
3. Functional level strategy: Developed by the first-line managers or supervisors, functional level
strategy involves decision making at the operational level concerning particular functional areas like
marketing, production, human resource, research and development, finance and so on.

Strategic Analysis and Decision Making using Product Evaluation Matrix:-

Strategic Analysis - Strategic analysis is a process that involves researching an organization’s business
environment within which it operates. Strategic analysis is essential to formulate strategic planning for
decision making and smooth working of that organization. With the help of strategic planning, the
objective or goals that are set by the organization can be fulfilled.
It is a strategic tool used to look at the big picture. It focuses on changes to the business environment that
can have either a positive or negative impact.
Definitions of strategic analysis often differ, but the following attributes are commonly associated with it:
1. Identification and evaluation of data relevant to strategy formulation.
2. Definition of the external and internal environment to be analyzed.
3. A range of analytical methods that can be employed in the analysis.
Examples of analytical methods used in strategic analysis include:
• SWOT analysis – Strength, Weakness, Opportunities and Threat Analysis
• PEST analysis - Political, Economical, Social and Technological Analysis
• Porter’s five forces analysis
• four corner’s analysis
• value chain analysis
• early warning scans
• war gaming.

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Product Evaluation Matrix –
The evaluation matrix allows to weight different ideas, rating them based on a set of defined criteria, in
order to identify the most promising ones. A common set of criteria includes the level of complexity
related to idea implementation, and level of value they will bring to the user and to the organization.
It is simply a table with one row for each evaluation question and columns that address evaluation
design issues such as data collection methods, data sources, analysis methods, criteria for
comparisons, etc. The design matrix links each evaluation question to the means for answering that
question.

The Evaluation Matrix (sometimes called an Evaluation Framework) forms the main analytical
framework for an evaluation. It sets out how each evaluation question and evaluation criteria will be
addressed. Similarly, impact evaluations use a pre-analysis plan. It breakdowns the main questions into
sub-questions, mapping against them data collection and analysis methods, indicators or/and lines of
inquiry, data collection tools and sources of information. This provides a clear line of sight from the
evaluation questions as defined at the start of the evaluation to the findings as outlined in the final
evaluation report.
The Evaluation Matrix serves as an organizing tool to help plan the conduct of the evaluation, indicating
where secondary data will be used and where primary data will need to be collected. It guides analysis,
ensures that all data collected is analyzed and triangulated and supports the identification of evidence
gaps. As such, the Evaluation Matrix ensures that the evaluation design is robust, credible (reducing
subjectivity in the evaluative judgment) and transparent.

Strategic decision-making - Strategic decision-making is the process of charting a course based on long-
term goals and a longer term vision. By clarifying your company's big picture aims, you'll have the
opportunity to align your shorter term plans with this deeper, broader mission – giving your operations
clarity and consistency.
The definition of strategic decision making includes at least the mission & vision and both short and long
term goals. The decisions relate to the entire environment in which the company operates, all resources
within the organization and all interaction between the company and the outside world.
 Strategic decisions often include important proposals for the distribution of resources.
 Strategic decisions relate to more than one activity.
 Strategic decisions often involve far-reaching decisions.
 Strategic decisions are complex in nature.
 Strategic decisions are made at the highest level of the organization and involve risks.

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Market-Growth- Market-Share Analysis Matrix:-
BCG matrix (or growth-share matrix) is a corporate planning tool, which is used to portray firm’s brand
portfolio or SBUs on a quadrant along relative market share axis (horizontal axis) and speed of market
growth (vertical axis) axis.
Growth-share matrix is a business tool, which uses relative market share and industry growth rate factors
to evaluate the potential of business brand portfolio and suggest further investment strategies.
The BCG matrix considers two variables, namely
a. MARKET GROWTH RATE
b. RELATIVE MARKET SHARE

The horizontal axis of the BCG Matrix represents the amount of market share of a product and its
strength in the particular market. By using relative market share, it helps measure a company’s
competitiveness.
The vertical axis of the BCG Matrix represents the growth rate of a product and its potential to grow in a
particular market.

In addition, there are four quadrants in the BCG Matrix:

1. Question marks: Products with high market growth but a low market share.
2. Stars: Products with high market growth and a high market share.
3. Dogs: Products with low market growth and a low market share.
4. Cash cows: Products with low market growth but a high market share.

The assumption in the matrix is that an increase in relative market share will result in increased cash
flow. A firm benefits from utilizing economies of scale and gains a cost advantage relative to
competitors. The market growth rate varies from industry to industry but usually shows a cut-off point of
10% – growth rates higher than 10% are considered high, while growth rates lower than 10% are
considered low.

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X-Y Coordinating Method:-

M-by-N Matrix:-
An M-By-N Matrix dimension matrix can be utilized as an aid to decision making when decision criteria
have multiple levels.

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SWOT Matrix:-
SWOT analysis (or SWOT matrix) is a strategic planning and strategic management technique used to
help a person or organization identify Strengths, Weaknesses, Opportunities, and Threats related
to business competition or project planning. It is sometimes called situational assessment or situational
analysis.
Strengths: characteristics of the business or project that give it an advantage over others.
Weaknesses: characteristics that place the business or project at a disadvantage relative to others.
Opportunities: elements in the environment that the business or project could exploit to its advantage.
Threats: elements in the environment that could cause trouble for the business or project.

Formulation of Technology Strategy:-

Booz-Allen & Hamilton methodology – A methodology for technology strategy formulation -
The home of strategy formulation is in the intersecting area between strategy and process management.
Furthermore, technology strategy formulation is the process of strategy formulation in the context of
technology. A methodology, developed by Booz-Allen and Hamilton (1981) and Pappas (1984), for
formulation of technology strategy has been widely used in many corporations around the globe. The
methodology is based on three basic propositions and constitute of a four-step model for technology
strategy formulation. After the four stages have been completed in sequential order, a technology strategy
is born and ready for launch (implementation).

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The three basic propositions are:
1. The direction and timing of technology evolution can be anticipated.
2. Technology should be viewed as a capital asset.
3. Assuring the congruence of technology investment and business strategy is essential to
successful technology management.

The Booz-Allen and Hamilton four-step process of formulating technology strategy involve
following stages:
1. Technology situation assessment
2. Technology portfolio development
3. Technology and corporate strategy integration
4. Setting technology investment priorities.

Core Competencies:-
Core competency is a unique skill or technology that creates distinct customer value. For instance, core
competency of Federal express (Fed Ex) is logistics management. The organizational unique capabilities
are mainly personified in the collective knowledge of people as well as the organizational system that
influences the way the employees interact.

A core competency is a concept in management theory introduced by C. K. Prahalad and Gary Hamel. It
can be defined as "a harmonized combination of multiple resources and skills that distinguish a firm in the
marketplace" and therefore are the foundation of companies' competitiveness.

Core competencies fulfill three criteria:

1. Provides potential access to a wide variety of markets.
2. Should make a significant contribution to the perceived customer benefits of the end product.
3. Difficult to imitate by competitors.

For example, a company's core competencies may include precision mechanics, fine optics, and micro-
electronics. These help it build cameras, but may also be useful in making other products that require
these competencies.

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Core Competence implies a pool of exceptional skills, strategies, moves or technology, that demarcates
between a leader and an average player, in the industry. It is the vital source of competitive advantage, for
a firm over its competitors, which leads to distinctive capabilities or excellence.

Exploitation of Core Competencies:-

A variety of resources, such as talent pool, physical assets, patents, and brand equity, make a contribution
to a company's core competencies. Once it understands those competencies, the company can properly
focus all of those resources. It may even outsource activities that are outside its core competencies in
order to devote its resources to what it does best.
The business should use its core competencies in every facet of its operations, from advertising to growth
strategies, to sponsorship, to its reputation. The advantage will be that these core competencies will lead
to longevity for a firm.
Even if a firm comes out with a unique product, if it is easy to replicate, once the patent expires, it will
find itself with numerous competitors in the market eating away at its once-dominant market share.
To prevent this, a company will have to rely on other core competencies, such as customer service,
quality control, advertising, and innovation to stay ahead of the new entrants in the market.

Real-World Examples
A business is not limited to just one core competency, and competencies vary based on the industry in
which the institution operates.
Some of the core competencies of established and successful brands tend to be there for all to see:
1. McDonald's has standardization. It serves nine million pounds of French fries every day, and
every one of them has precisely the same taste and texture.
2. Apple has style. The beauty of its devices and their interfaces gives them an edge over its many
competitors.

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Technology integration:-
Technology integration is the well-coordinated use of digital devices and cloud computing as tools for
problem-solving, deeper learning, and understanding. Technology facilitates access to curriculum but is
not the curriculum itself.
The Technology Integration Matrix (TIM) provides a framework for describing and targeting the use of
technology to enhance learning. The TIM incorporates five interdependent characteristics of meaningful
learning environments: active, collaborative, constructive, authentic, and goal-directed.

Linking Technology & Business Strategies:-

Technology bears an integral relation to a company’s strategic thinking by helping to define the range of
its possibilities. At the same time, it provides a good portion of the means by which strategy, once
decided on, is to be carried into effect.
Technology as a business strategy lets you plan for key rollouts that improve the experience for both
employees and customers. Innovation. Unfortunately, even companies that have implemented tech tools
for cyber security and enhanced operations are not taking advantage of in-house innovation.
Investing strategically in new technologies will continue to be the centre of attention in the near future. In
the “Age of the Customer”, organizations are under pressure to change the digital experience not only for
their customers but also for their employees or other entities with whom they interact.
For both business and IT leaders, it’s exciting to work with cutting-edge technology: Internet of Things
(IOT), mobile, intelligent agents/bots, virtual reality, augmented reality, business intelligence. Business
and technology working closely become fundamental to ensure a perfect alignment to allow the
organization to lead in its market.

Creating the Product-Technology-Business Connection:-

Emerging technologies are accelerating digital transformation, requiring business and process
development and forward-looking governance. Business capabilities are the sum of all processes and
assets (systems and data) within the company and comprise the entire business organization, including
any supporting functions within the organization. Business capabilities are the key for developing the
business and for utilizing technology in the best possible way. Transformation comprises of the parts and
processes of an organization that are engaged in improving business capabilities.

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Technology’s Interface with – Market, Customers and Suppliers:-
Technology is continuously evolving which enhances the exchange between marketers and customers.
Now customers are more personally connected and interacted with the brand to develop better
relationships.
Digital marketing has changed the way marketers and consumers interact. Some of the innovation of
technology that changes customer behavior are
1. Customers remain connected to marketers
2. Consumer expectations have enhanced
3. Increased use of voice search
4. Personalization
5. Global Reach

The development of the internet provides customers an opportunity to get any information about any
brand or product. Technology made it possible to open a plethora of numerous data for the customers to
access.
Also, they have got access to real-time reviews and feedback about brands and products. This enables
them to compare prices, qualities, services, and aftersale services about companies and choose the best.
Now customers have become more conscious and alert about the words of marketers. Rather than
believing all the stuff, they had added on the website or word of mouth they generally like to see the
actual proofs of their services. These proofs are shown in the form of reviews, testimonials, ratings, and
feedback.

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  Technology has changed how we communicate with each other, including how organizations and
companies can communicate with us.
 eMarketing channels such as e-mail, mobile, call centers, and IM and chat rooms are great for
helping organizations and companies communicate.
 CRM software can be used to automate lead and sales processes and to collect customer
information in a centralized place.
 Data can be stored in server logs, which means the acquisition source of customers may be
recorded and analyzed against sales data for customers from the source.
 Integration is a key to effective use of technology in CRM. Knowing where your customers come
from but not what they purchase is pointless. It is best to compare them in order to produce
actionable insights.
 VRM is the reciprocal of CRM, where the focus is on vendors. This is a new area of eMarketing.

Customer-Supplier and Product-User relationships:-

Customer-Supplier Relationship –
The positive customer-supplier relationship begins with the initiative of the supplier to demonstrate his
sensitivity to the customer’s needs. A customer always vouches for the conditions of his business deal
with the supplier and likes to be honest with them to have a smooth flow of business. But many non-
serious suppliers sabotage the deal in the beginning only by making the customer struggle to even getting
a relationship started.
The lapses and diversions on the part of the suppliers can affect their relationship in many ways as given
below:
 Satisfaction: The customer expects overall attention and convenience in all departments to
ensure smooth fulfillment of his needs. This includes quality, timeliness, ease of access and
commitment of conditions. He wants to believe that the supplier cares for him.
 Competitiveness: Customers assess the supplier through competition based on the pricing and
quality of their products, its reliability, its technological background and industry trends. These
factors affect the deal.
 Innovation: It is difficult for the supplier to divert the customer from their quality assessment.
Customer knows and lives the products more than the supplier does, as he is working on them and
is in a position to suggest innovation and development for the products.
 Finance: Suppliers have to be ready for providing financial advantages as loan, extended terms
on purchases and postponement of debt when demanded by their loyal customers particularly at
their growth stage or when they are into a financial crisis.

On the other hand suppliers also have a right to get their needs met as they are ultimately motivated by
profit. They want to be known as the best in their deals so they count on customer loyalty and satisfaction
at all levels which translate into direct benefit of both of them. Therefore it is only win-win relationships
between them in all stages of the customer-supplier chain to produce total satisfaction. It should be
remembered that a customer assumes his name only in relation to his supplier. As such in order to be a
valued customer to suppliers, here are a few things he should do:
1. Payments always on time. The customer should always negotiate for favorable payment terms
before the deal is initiated. But once the order is placed, the commitment should be honored. Any
problems arising in this regard should be properly dealt with to maintain the goodwill and
benefits to earn.

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 2. Provide adequate flexibility. The customer should try to give suppliers as much flexibility as
possible for them unless there is a compelling, competitive reason not to do it. Unreasonable
demands should be avoided. This tendency also connects to quality production.
3. Personalize the relationship. The customer should always be in contact with the supplier and
visit him frequently, not necessarily only when it is needed. He may also be invited to attend and
give suggestions in some of their strategy meetings. Methods of improving business may also be
discussed. Sharing of knowledge, opportunities, service benefits, software compatibility etc.
would be beneficial for both.
4. Share information. The customer should be communicative by keeping the suppliers aware of
what is going on in their organization. He may share some of the key strategic information with
them. Frequent and open communications are important in understanding each other’s
expectations. All relationships begin with self.
5. Be a demanding but a valued customer. Being a demanding customer can just be fair. The
customer should state his demands clearly and tell his supplier to hold his agreements. At the
same time as a valued customer he must always cooperate with him to keep up his commitments
without embarrassment. Sharing knowledge, service benefits, media exposure opportunities,
software compatibility, efficiencies etc. would add to enhance relationship.

These essential factors are important for the customers to create and maintain a healthy relationship with
the suppliers.

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Product-User Relationship –

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Chapter 4 : Technology Strategy Choice

Technology – Business Connection :-

The role of technology in business caused a tremendous growth in trade and commerce. Business
concepts and models were revolutionized as a result of the introduction of technology. This is because
technology gave a new and better approach on how to go about with business. It provided a faster, more
convenient, and more efficient way of performing business transactions.
Some of actions of technology in business include accounting systems, management information systems,
point of sales systems, and other simpler or more complicated tools. Even the calculator is a product of
technology. It is indeed unfathomable to summon the idea of going back to the days where everything
was done manually, which basically means starting all over again from scratch.
With the automated processes that technology can provide, productivity reaches a higher level.

Domains of Technology Choice :-

1. Technology appropriation: Commitments to build technological capabilities.
2. Deployment in products: Commitments to exploit technological capabilities through new product
development.
3. Deployment in value chains: Commitments to exploit technological capabilities in operations.

Linkages between Technology Choice and Competitive Advantage:-

1. Creating fundamentally new business - discovering opportunities for totally new businesses often
results from a firm's pursuit of basic and applied research.
2. Altering the rules of rivalry - Altering the rules of rivalry in existing competitive domains through
the deployment of technological capabilities.
3. Supporting existing businesses - involves product and process innovations.

Reasons for the Linkage between Technology and Business Strategy Decisions:-
1. Technology directly affects competitive position of firms.
2. Technology competes for resources within a firm.
3. Structure, processes, and information systems for managing technology are costly
4. Technology decisions are strategic in nature.

Technology Strategy Definition:-

Technology strategy (information technology strategy or IT strategy) is the overall plan which consists of
objectives, principles and tactics relating to use of technologies within a particular organization. Such
strategies primarily focus on the technologies themselves and in some cases the people who directly
manage those technologies. The strategy can be implied from the organization's behaviors towards
technology decisions, and may be written down in a document. The strategy includes the formal vision
that guide the acquisition, allocation, and management of IT resources so it can help fulfill the
organizational objectives.
The definition of technology strategy is the creation of an overall business plan which consists of
principles, objectives, and tactics for using technology to achieve organizational objectives.
A technology strategy has traditionally been expressed in a document that explains how technology
should be utilized as part of an organization's overall corporate strategy and each business strategy.

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The revealed pattern in the technology choices of firms. The choices involve the commitment of resources
for the appropriation, maintenance, deployment, and abandonment of technological capabilities. These
technology choices determine the character and extent of the firms' principal technical capabilities and the
set of available product and process platforms.
Technology strategy focuses on (ADDD) - the kinds of Technologies that a firm selects for
Acquisition, Development, Deployment, or Divestment.

Role of Chief Technology Officer:-

The Chief Technology Officer (CTO) oversees the people, processes and technologies within a company's
IT organization to ensure they deliver outcomes that support the goals of the business.

1. Technology strategy constitutes the primary task of the CTOs.

2. They provide top management with the intelligence as well as sponsor specific technology selection
decisions within an organization.
3. Technology strategy planning is typically developed by the organization’s Chief Technology Officer
(CTO) in collaboration with senior managers from other business units and the executive team. This
collaboration is vital as organization-wide buy-in ensures the success of the technology business
strategy.
4. The CTO also develops strategies to increase revenue and performs a cost-benefit analysis and return-
on-investment analysis.
5. A chief technology officer (CTO) is responsible for overseeing the development and dissemination of
technology for external customers, vendors, and other clients to help improve and increase business.

Key principles underlying Technology Strategy – Objectives, Drivers, Decision criteria:-

Following are the Key principles underlying the Technology Strategy-
1. Objectives -
a. The creation of value for its customers and its investors.
b. A firm should commit resources to technology appropriation and deployment only if the
commitments are judged to result in significant competitive advantage in the marketplace.
2. Drivers -
1. Technology and strategic considerations should be weighed in the process of arriving at the
technology choices.
2. Process should focus on two questions:
a) Does the environment offer sites for value creation or can the sites be created?
b) Is the firm well positioned to exploit the sites?
Technology development
Technology deployment
3. Technology choices should interface with business/corporate strategy formulation

3. Decision Criteria -
The resources of a firm should be focused on a limited number of choices.

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Technology Strategy Types:-
1. Scope - These decisions refer to what technologies firms should be in.
2. Leadership - Technology leadership refers to a firm's commitment to a pioneering goal in the
development or exploitation of a technology as opposed to a more reactive goal.
3. Appropriateness of Technology -
a. Era of incremental innovation - Incremental innovation is a series of small improvements or
upgrades made to a company's existing products, services, processes or methods. The changes
implemented through incremental innovation are usually focused on improving an existing
product's development efficiency, productivity and competitive differentiation.
Examples of Incremental Innovation - Product and service improvements. Large consumer
services companies might often have tons of support requests, or even customer complaints.
Process automation, Minimizing waste, Internal process and tool improvement.
b. Era of technology emergence - “Technological emergence is a cyclic process in highly creative
scientific networks that demonstrates qualitative novelty, qualitative synergy, trend irregularity,
high functionality, and continuity aspects in a specified time frame. Technological emergence is
related to agricultural,
4. Strategy Types -
a. Technology leadership strategy - establishing and maintaining a preeminent position in the
competitive domain in all the technologies for a dominant market position through both
technology development and deployment.
b. Niche strategy - Focusing on a limited number of critical technologies to seek leadership.
c. Follower strategy - Maintaining technological adequacy in a broad set of technologies.
d. Technology rationalization - Maintaining adequacy only in a select set of technologies.

Diversified Firms:-
Diversification strategies involve firmly stepping beyond its existing industries and entering a new value
chain. Generally, related diversification (entering a new industry that has important similarities with a
firm’s existing industries) is wiser than unrelated diversification (entering a new industry that lacks such
similarities).
1. Technology-related diversifiers - Concentric diversification involves adding similar products or
services to the existing business. It occurs when a firm moves into a new industry that has
important similarities with the firm’s existing industry or business lines. The technology would be
the same but the marketing effort would need to change.
For example, when a computer company that primarily produces desktop computers starts
manufacturing laptops, it is pursuing a concentric diversification strategy.
2. Market-related or conglomerate diversifiers -
Conglomerate diversification involves adding new products or services that are significantly
unrelated and with no technological or commercial similarities. With conglomerate
diversification, organizations often aim to achieve marketing or production synergy.
For example, Reliance Industries - The organization’s business portfolio has grown significantly
beyond its textiles and petrochemicals roots and now they are into Telecommunication and Retail
market.

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A Framework for formulating Technology Strategy:-
For a strategy to be effective, it should also answer questions of how to create value, deliver value, and
capture value. In order to create value one needs to trace back the technology and forecast on how the
technology evolves, how the market penetration changes, and how to organize effectively.
Defining frameworks provides insights into the current and future business strategy, assess business-
alignment on various parameters, identify gaps, and define technology roadmaps and budgets.

1. Strategic Diagnosis - Identifying actual and potential technologies inside and outside the firm,
assessing the applications that might emerge from them and the impact of these applications on
current and future competitive domains. Strategic diagnosis is a systematic approach to
determining the changes that have to be made to a firm's strategy and its internal capability in
order to assure the firm's success in its future environment.
Strategic Diagnosis defines competitive position of the firm assessing the technological strengths
of a firm relative to its competitors and the technological requirements of its strategic position in
the market.
a) Technology inventory.
b) Profiling a firm's competitive position in current and future technologies.
c) Charting the technological requirements of strategic positioning.

2. Formulation of Technology Strategy - A firm decides to commit resources to a select set of

technology choices.
a. Appropriation of technology
b. Deployment in products
c. Deployment in value chain

Technology choices need to be implemented in order for them to contribute to the competitive
advantage of firms. Firms may choose to implement technology strategy either by going it alone
or in collaboration with other firms.

3. Crafting an Implementation Approach –

a. Mode of implementation - Implementation mode' is defined as to what extent a system is
coupled to organizational objectives during the implementation process.
b. Intellectual property strategy - Firms may take action to prevent the value derived from their
technology choices from being dissipated by the forces of imitation or holdup.
c. Organization for implementation - Technology choices may require in-house research and
development, product development, or value chain reconfiguration prior to implementation.

4. Execution - A firm develops detailed operational plans and human resource deployments
necessary for the execution of technology choices.

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Technology Strategy – Superior Performance Characteristics. Accountability to various Stakeholders,
Performance Measurement :-

Superior Performance Characteristics:-

Superior Performance means the performance of work at a level recognized above and beyond the
expected standard established for the position in terms of quality and/or quantity; results in demonstrated
benefits to the department or work unit's purpose and objectives; and/or achieves significant benefits to
the public. For the business firm, superior performance has a clear meaning: It is the ability to generate
high profitability and increase profits over time. A central task of managers is to pursue strategies that
enable their firm to attain superior performance, measured by profitability and profit growth

SPM is an approach that makes an organization’s strategic goals more transparent to line executives and
provides an ongoing mechanism to monitor progress toward these goals through simple and intuitive
performance measures. SPM creates a common language among all parts of the organization so they can
interact transparently and effectively, thus helping to break down silos. SPM has four elements: (1)
aligning and cascading strategic objectives down to day-to-day operational goals; (2) developing balanced
scorecards for reporting; (3) making reporting easier and focusing on “metrics that matter”; and (4)
testing and validating operational and strategic decisions.

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Chapter 5 : Technology Strategy – Collaborative Mode

Collaborative Arrangements – Definitions, Trends, R&D Alliances, Marketing Alliances, Outsourcing

Alliances, Collaboration between small and large firms, Strategic and Operational Reasons for
Collaborative Arrangements :-

Collaborative Arrangements – Definitions

Collaborative arrangements involve two or more firms in which the partners hope to learn and acquire
from each other the technologies, products, skills, and knowledge that are not otherwise available. The
partners may range from suppliers and customers to competitors, unrelated firms, or organizations in the
public sector.
A collaborative arrangement (sometimes referred to in practice as “line-item” joint ventures or “virtual”
joint ventures) is a contractual agreement between two or more parties (participants) to jointly conduct
business activities for their mutual benefit without the formation of a separate entity in which to conduct
the activities.
Once a collaboration agreement is drafted and executed, the collaborating companies have the opportunity
to benefit from each other's expertise in order to create new products.
In many cases, when two businesses work together, both parties negotiate a future agreement that details
how revenues will be split or how royalties will be issued for a successful product launch. Collaborative
arrangements may be undertaken for a variety of purposes, including scientific research, technical
development, and artistic production.

Trends -
Recent years have witnessed four distinctly new trends in collaborative arrangements:
1) R&D alliances
2) Marketing alliances
3) Outsourcing alliances
4) Collaboration between small and large firms

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1. R&D Alliances
R&D alliances represent the formation of collaborative arrangements between two or more firms to
conduct research and development. R&D alliances are innovation-based relationships formed by two
or more partners who pool their resources and coordinate their activities to reach a common goal.
These are relationships in which R&D activities constitute a significant part of the collaborative
effort, and represent a particular subset of cooperative agreements.

2. Marketing Alliances
Firms are also increasingly employing marketing alliances to exploit the outcome of research and
development through marketing channels. These alliances could take the form of licensing or teaming
up with firms that have marketing expertise. (A lot of drug developers are teaming up with domestic
firms with mass distribution expertise).
Marketing Alliance is a strategic alliance focusing on marketing. Strategic marketing alliances are an
instrument for companies with complementary strengths to penetrate into a certain market more
effectively and efficiently than any alliance partner could manage on its own. The alliance allows the
companies to minimize the risks relating to their technological, market, or competitive environments
and is typically based on long-term relationships and mutual trust.
There are four major categories:
- Product or service alliances - One company licenses another to produce its product, or two
companies jointly market their complementary products or a new product.
- Promotional alliances - One company agrees to carry a promotion for another company’s product
or service.
- Logistics alliances - One company offers logistical services for another company’s product.
- Pricing collaborations - One or more companies join in a special pricing collaboration.

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 The role of marketing alliance is to provide the organisation a way to promote its product while
producing, advertising and making pricing strategy. Marketing Alliance is based on strategic
perspective considering organisation marketing operation, from the interior to exterior resources.
Exterior resources can be, for example, organisation's public relation, environmental resources,
supplier, and political environment.
Marketing Alliance is built for controlling organisation's marketing cost

3. Outsourcing Alliances
Outsourcing Alliances enables a firm to rapidly access another firm’s expertise, scale, or other
advantages. Firm might outsource particular activities so that they can avoid the fixed asset
commitment of performing those activities in-house. Outsourcing can give a firm more flexibility and
enable it to focus on its core competencies.
Outsourcing is an agreement in which one company hires another company to be responsible for a
planned or existing activity that is or could be done internally, and sometimes involves transferring
employees and assets from one firm to another.
 Companies use outsourcing to cut labor costs, including salaries for their personnel, overhead,
equipment, and technology.
 Outsourcing is also used by companies to dial down and focus on the core aspects of the
business, spinning off the less critical operations to outside organizations.
 Outsourcing internationally can help companies benefit from the differences in labor and
production costs among countries.

4. Collaboration between small and large firms

Small firms have been growing in importance as leaders in technology development. However,
because the ability of small firms to compete in the global markets is constrained, inter-firm
collaboration for innovation has become a major vehicle by which small firms overcome some of
these barriers.

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Strategic and Operational Reasons for Collaborative Arrangements
Three major reasons why firms seek collaborative relationships with other partners, including competitors
are: pooling of resources, sharing risk and leveraging the individual firm’s capabilities.
Collaborative arrangements can be classified into two broad categories:
1. STRATEGIC
2. OPERATIONAL

1. STRATEGIC (three strategic long-term objectives)

a. Controlling the Evolution of Competitive Domains -
Four major areas of collaboration have been common:
 Dominant design- Firms find it useful to collaborate with certain other firms for gaining
acceptance of their designs as the industry standard.(IBM&Microsoft, IBM PC became de
facto standard).
 Establishment of standards- Firms collaborate to establish standards.(automobile firms
often collaborate to get environmental emission standards established in their favor by the
government).
 Technology development- Firms may band together to gain favorable treatment from other
environmental agents (formation of SEMATECH-group of companies gained access to
federal funds to support their research.
 Favorable treatment from the government- (Clinton administration’s threat to impose
sanctions on Japanese imports was partly stimulated by the collective lobbing efforts of U.S.
auto manufacturers).
b. Knowledge Acquisition and Transfer -
Firm may attempt diversification into another industry, away from its core operations, by
collaborating with other firms either through joint ventures, equity investments, or acquisitions
(Procter&Gamble’s diversification into the biotechnology industry was implemented through a
series of acquisitions that enabled the firm to understand more biotechnology industry;
technology transfer to developing countries-India’s auto industry is booming with a help of Indo-
Japanese joint ventures)
c. Links to Environment -
Large firms encourage their scientists or senior science personnel to become active in advisory
committees in universities or government agencies. This kind of participation enables firms to
gain access to information that otherwise would not have been easily available(IBM &
Universities).

2. OPERATIONAL (four operational short-term objectives)

a. Competitive Benchmarking -
Benchmarking practices involve a firm’s importing the “best in the world" practices in a specific
value chain activity and institutionalizing these practices in the normal operating procedures.
(When General Electric wanted to benchmark its distribution system, it studied Wal-Mart).
b. Extract operating Efficiencies –
Because comparative advantage of firms is shifting due to the rapid changes in the marketplace,
firms often find it useful to outsource some of the activities in the value chain that they have

34
 previously performed in-house (banks are outsourcing activities involved in the management of
information systems).
c. Time to market –
Reduction in time to market is accomplished by using a variety of mechanisms ranging from
outsourcing to joint development to equity purchase. (Pharmaceutical firms are outsourcing
operations involved in drug development).
d. Capture Value from Existing Technology –
Collaborative arrangements also provide firms one avenue by which the benefits of in-house
technology development can be realized.
 Spin-offs – represent a mechanism whereby a firm can reap the value of technology
developed in-house that does not fit with the business strategy of the firm. The firm might
take a key position in a new firm created by the people who were involved in the
development of the technology.
 Transfer of technology through projects.
 Sell consulting services based on know-how developed in-house.

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Collaborative Arrangements in the domain of Technology Strategy – Appropriation of technology,
Deployment of technology in New Products, Deployment of technology in the Value Chain, Marketing
of technology :-

There are four domains of technology strategy:

1. Appropriation of Technological Capability
2. Deployment in New Products
3. Deployment in the Value Chain
4. Marketing of Technology
Each domain has different type of collaborative arrangement.

1. Appropriation of Technological Capability

2. Deployment in New Products

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3. Deployment in the Value Chain

4. Marketing of technology

37
Risks of Collaborative Activity – Intellectual Property Right Risk, Competitive Risk, Organizational
Risk :-

1. Intellectual Property Right Risk

a. Private Property (Profit Corporation).
b. Public Property (government, nonprofit educational institutions).
c. Leaky Property (collaborative arrangements) refers to knowledge that can be appropriated by
another through imitation, observation, or by hiring people away. Thus, the collaborating firms
run the potential risk of erosion of their intellectual rights, due to the sharing of intellectual
property rights.
2. Competitive Risk
Competitive risk refers to the danger that one of the partners may imitate another’s technology and
attempt to compete with the firm in which it acquires the relevant know-how.
3. Organizational Risk
Organizational risk refers to the problems that appear due to the way in which joint efforts are
managed. Such risks arise from four factors: differing priorities, differing behavior styles, lack of
performance of one partner, relationships among people.

Risks differ among the various domains of activity in the technology strategy.

Global Technology Alliances :-

Global alliances have sprung up between partners in Western countries, between firms in Western
countries and Asian countries, and between small and large companies.
A global strategic alliance is usually established when a company wishes to edge into a related business
or new geographic market, particularly one where the government prohibits imports in order to protect
domestic industry. Alliances are typically formed between two or more corporations, each based in their
home country, for a specified period of time. Their purpose is to share in the ownership of a newly
formed venture and maximize competitive advantages in their combined territories.
The cost of a global strategic alliance is usually shared equitably among the corporations involved and is
generally the least expensive way for all concerned to form a partnership. An acquisition, on the other
hand, offers a faster start in exploiting an overseas market but tends to be a much more expensive
undertaking for the acquiring company—one that is likely to be well out of the reach of a solo operator.
While a global strategic alliance works well for core business expansion and utilizing existing geographic
markets, an acquisition works better for immediate penetration to new geographic territories. Hence, an
alliance provides a good solution to global marketers that lack the required distribution to get into
overseas markets.
A global strategic alliance is also much more flexible than an acquisition with respect to the degree of
control enjoyed by each party. Depending on your resources, you can structure an equity or non-equity
partnership. Within an equity partnership, you can hold a minority, majority, or equal stake. In a non-
equity partnership, the host country partner has a greater stake in the deal, and thus holds a majority
interest. Yet whom you choose as your partner is arguably more important than how the partnership is
structured, because you want a partner who will have an active contribution to make and who is flexible
and able to resolve conflicts as the alliance evolves.

38
Even more important is that you keep in mind what you are seeking to gain from the alliance and that you
choose a partner whose contribution will enable you to achieve those goals.

Cases on R & D Collaborations :-

Cooperative arrangements in technology development are common in Japan and Europe.

The form of Collaborative Arrangement :-

Different forms of arrangements are appropriate under different technology and market condition. When
the technology and market are familiar to the firm, internal development is encouraged. When either one
is new or unfamiliar, joint venture or acquisition is an alternative. When neither the technology nor the
market is familiar to a firm, acquisition, venture capital, or educational acquisitions are needed.

https://slideplayer.com/slide/6392326/

https://quizlet.com/130757794/management-of-innovation-technology-unit-5-to-8-flash-cards/

39
Sample Questions:-

1. Define Technology Intelligence.

Ans. Page No – 8

2. Steps in Mapping the Technology Environment.

Ans. Page 9-10

3. Discuss the Contemporary Challenges in Mapping the Technology Environment.

Ans. Page 12

4. Explain the Competitive Consequences of Technological Change.

Ans. Page 2

5. Explain Competitive Rivalry.

Ans. Page 2

6. Elaborate the Role of Chief Technology Officer.

Ans. Page 26

7. Explain the process of Marketing of Technology.

Ans. Page 36

8. Elaborate the Intellectual Property Right Risk.

Ans. Page 37

9. Explain the X-Y Coordinating Method.

Ans. https://www.youtube.com/watch?v=23aFJgKprvw

10. Define Product Evaluation Matrix.

Ans. https://www.youtube.com/watch?v=23aFJgKprvw

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