TECHNOLOGY TECHNOLOGY MANAGEMENTMANAGEMENT

Linking Technology Strategy to Competitive Strategy

Aryantono

Supervisor: Prof. Allan S. Carrie

• Background of Research Work» Research Problem» Research Objectives

• Theoretical Framework

• Research Design

• Model, Hypothesis and Expected Research Findings

Outline of Presentation

Technology ManagementTechnology Management

The strategic management of technology is considered among the most formidable challenges confronting companies today in their efforts to respond to global competition. Intense worldwide rivalry in many industries has highlighted the need for strategy for developing, commercialising and managing innovative technologies (Erickson, 1991).

Background of Research WorkBackground of Research Work

Background of Research WorkBackground of Research WorkIndustrial Environment - Technology StrategyIndustrial Environment - Technology Strategy

A key insight in the study of the intensely disruptiveturbulent industrial environment is that the strategic paradigmsthat work well in one environment don’t work at all in another.

The nature of competition is different among industries

What should firm do in order to maintain its competitivenessin the dynamics of competition?

Research ProblemResearch Problem

In considering the nature of competition there four categories of industries (D’Aveni, 1999). Moreover, according to Burgelman and Rosenbloom, technology strategy is forced by the environment of the industry in which it operates. Are there different approaches of technology strategy considering the nature of competitions?

The overall objective of this research is to provide a betterunderstanding about the correlation between the nature ofcompetition and strategic management of technology

The specific aims are to:

1. To determine the dimensions of technology strategy.2. To specify the firm’s competitive strategy regarding its industrial environment.3. To link those dimensions of technology strategy and competitive strategy.4. To provide a model that can show the relation within the dimensions of technology strategy in order to examine the internal consistency of the firm’s technology strategy.

Research ObjectivesResearch Objectives

Industrial EnvironmentIndustrial Environment

Competitive StrategyCompetitive Strategy

Strategic Management of TechnologyStrategic Management of Technology

Industrial categories and their ways to create or maintain strategic supremacy

Strategic choices according to create competitive advantage

• The internal consistency of a firm’s technology strategy• The dimensions of technology strategy

Theoretical FrameworkTheoretical Framework

Industrial Environment:Four Patterns of Varying Turbulence (D’Aveni, 1999)

Stable and Low

Time

Turbulence

Equilibrium

Com

pete

nce

Enh

anci

ng/

Neu

tral

Com

pete

nce

Des

troy

ing

Infrequent Disruptions

Fluidly Changing

Time

Turbulence

Fluctuating Equilibrium

Frequent Disruptions

Occasional Upheaval

Time

Turbulence

Punctuated EquilibriumChaotic

Time

Turbulence

Disequilibrium

Industrial EnvironmentIndustrial EnvironmentIndustrial categories and their ways to create or maintain

strategic supremacy (D’Aveni, 1999)

Environment Dampening Strategy of Dominant Player Disruptive Strategy of Challenger

Equilibrium Use barriers to entry Use disruption to break down the barriers

FluctuatingEquilibrium

Build around core competencies byleveraging them into many markets andenhancing them by layering newcompetencies over them

Use disruption to shift the corecompetencies needed to succeed so theincumbent’s current strengths becomeweaknesses

PunctuatedEquilibrium

Use standards to create a stable industrystructure around a standard valueproposition and then respond to majorrevolutions when necessary

Be contrarian. When the incumbent isdisrupting, win by improving andpromoting the old model, and when theincumbent is seeking stability, disrupt

Disequilibrium Use a strategy of continuous disruption tostamp out the disrupter and sustainsupremacy. The goal is to beat thedisrupter at its own game and useresources to outlast it

Disrupt the dominant firm frequently; wearit down by keeping it off balance, byattacking more intensely, more swiftly, andunpredictably, and by being more efficient.

Environment Strategic Choices

Equilibrium Creating a stable domain Single-core technology Cost efficiency, cost minimization Narrow segment

FluctuatingEquilibrium

Differentiation, unique along several dimension Continuously developing domain Searching new product and market opportunities

PunctuatedEquilibrium

Searching new product and market opportunities Maintaining traditional products and customers

Disequilibrium Creating and exploiting new product and marketopportunities

Competitive StrategyCompetitive StrategyCategories of industries and strategic choices

Strategic Management of Strategic Management of TechnologyTechnology

•The internal consistency of a firm’s technology strategyThe internal consistency of a firm’s technology strategy

•The dimensions of technology strategyThe dimensions of technology strategy

Strategic Management of Technology:Strategic Management of Technology:The ObjectivesThe Objectives

Strategic MOT is pursued to (Drejer, 1996): Enrich mutual understanding between

technology and business. Cover broader issues while at the same time

integrate it across the corporation Enrich management attention and strategic

appreciation of technology.

In order to do that, it is essential to examine MOTbased on what firms aim to achieve by their doing.Such an examination helps us to identify the endsof MOT and their relationship.

Strategic Management of TechnologyStrategic Management of TechnologyThe Ends of MOTThe Ends of MOT

By analysing the literature, it can be argued that theends of MOT can be defined as follows:

1. Objectives: R&D and Organisation.

2. Opportunities: Internal and External.

3. Resources: Human and Technology.

Strategic Management of TechnologyStrategic Management of TechnologyThe PerspectiveThe Perspective

Moreover, Strategic MOT can be viewed by using twoperspectives: Purpose/ throughput process(es). In regard to this

perspective, Strategic MOT concerns to develop anddirect technology, in the light of a firm’s objectives,opportunities and resources.

Structure/inter-organisational relationship. Inregard to this perspective Strategic MOT is concernedwith the flexibility of organisation, regardingtechnological change. Integration, co-ordination andinter-organisational relationship are perceived as astrategic consideration of MOT. Again, such factors aredefined in the light of a firm’s objectives, opportunitiesand resources.

Strategic Management of Technology:Strategic Management of Technology:The DefinitionThe Definition

Concerning the ends of MOT, strategic MOT processcan be defined as the continuing redefinition andachievement or exploitation of a firm’s technologicalopportunities, objectives, resources and themaintenance of appropriate relationship betweenthem.

With the above consideration in mind, The StrategicMOT can be shown in diagrammatic form in thefollowing figure:

Opportunities

•R&D

•Organisatio

n•Technology

•Human

•Internal•External

Res

ourc

esO

bjectives

(re)

defin

ing

and

mat

chin

g

a fir

m's

tech

nolo

gica

l

obje

ctiv

es a

nd o

ppor

tuni

ties

(re)defining and matching

a firm's resources to

opportunities

(re)defining and maintainingthe relationship betweenobjectives and resources

Perspectives

Pur

pose

Str

uctu

re

Pers

pect

ives

PurposeStructure

PerspectivesPurpose

Structure

The Dimensions of Technology Strategy:The Perspective on Strategic MOT - The

characteristics OF MOT

Characteristics of MOTPerspective Acquisition

ManagementExploitationManagement

PurposeTechnological

thrust

Type oftechnological

innovation

StructureAcquisition

methodExploitation

method

The Dimensions of Technology Strategy:Objectives - Resources

Objectives

ResourcesHuman Technology

R&DContinuous

DevelopmentProgram

Technologicalinvestment

OrganisationOrganisational

structureTechnological

competence

Technology Human

5. TechnologicalInvestment

7. Continuous Dev.Program

R&D

6. TechnologicalCompetence

8. OrganisationalStructure

Org.

Opportunities1. Technological Thrust

2. Acquisition Method

3. Technological

Innovation

4. Exploitation M

ethod

•R&D

•Organisatio

n•Technology

•Human

•Internal•External

Res

ourc

esO

bjectives

Industrial competition, competitive strategy,technology strategy

Model

Survey/interview

Descriptive analysis

Literature ReviewLiterature Review

Model BuildingModel Building

Data CollectingData Collecting

Testing and AnalysisTesting and Analysis

ConclusionConclusion

Research DesignResearch Design

Model Building

TechnologyTechnologyStrategyStrategy

TechnologyTechnologyStrategyStrategy

The nature of competitionsThe nature of competitionsThe nature of competitionsThe nature of competitions

Competitive StrategyCompetitive StrategyCompetitive StrategyCompetitive Strategy

Model, Hypothesis and Expected Research Findings

Dimensions

EnvironmentEquilibrium

FluctuatingEquilibrium

PunctuatedEquilibrium

Disequilibrium

Technological Thrust

Acquisition Method

Technological Innovation

Exploitation Method

R&D Investment

Technological Competence

Continuous DevelopmentProgram

Organisational Structure

Model, Hypothesis and Expected Research Findings:

examples

Dimensions

EnvironmentEquilibrium

FluctuatingEquilibrium

PunctuatedEquilibrium

Disequilibrium

Technological Thrust less currentclose to state

of-the-art

close tostate of-the-art

as state-of-the-art

Acquisition Method License-InContracted-

Out R&DJointVenture

Internal R&D

Technological InnovationContinuousincrementalinnovation

Robust designCompetence-shifting

Novelty Competence-

shifting

Exploitation Method License-Out Joint Venture

Contracted-OutManufactureor Marketing

Employ In OwnProduction orProduct