Business and Technology Environment-prince Dudhatra-9724949948

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Chapter 5

NATURAL AND

TECHNOLOGICALENVIRONMENT

Core of Social System ± natural and social environment

prince dudhatra prince dudhatra--97249499489724949948



The natural and technological environments present the

impulsive potential for development while the other

environments like the economic, social, and political and

government factors represent the propulsive potential for development.

Natural Environment : Resources And Constraints

Technology ± through tools and processes




Natural Env Technology Env

To degrade or deplete or enhance through tech.




Impulsive and Propulsive Factors Affecting Business

Determines extent of exploitation

Of developmental potential, direction, pace & pattern of

development




Given the natural and technological environments, the

propulsive factors determine the extent of exploitation of

the development potential and the direction, pace and pattern of development.




Building HumanCapabilities

EconomicGrowth

Technological Change

Links Between Human Dev And Tech (UNDP)

K nowledge

Creativity

Advances inScience/ Tech

Producti

vity

Gains

Resource

s

for tech

Dev

Resources

For Edn, healthFor

Employm

ent




Natural Environment

³It is the source and support of everything used by

business (and almost any other human activity) ±

every raw material, every energy source, everylife-sustaining factor and even every waste

disposal site´- Warwick and Wood.

Resource availability is the fundamental factor in

the development of business societies.




Factors ± Natural Environment

Geographical ± natural endowments

Ecological ± natural resources depletion, pollution, eco bal

Weather and Climate Location

Topography

Differences in geographical conditions ± call for a change

in the marketing mix. E.g industries with a high materialindex will be located near the raw material sites.

Earthquake prone regions ± choice of buildings - Gujarat




Technological Environment

Technology is one of the important determinants of

success of a firm as well as the economic and social

developments of a nation.

Technology includes tools ± hard(machines) and

soft(ways of thinking) technology ± to solve problems and

promote progress between, among and between societies.

UNCTAD¶s draft TOT Code-´systemic knowledge for the

manufacture of a product, for the application of process or

for rendering of a service and does not extend transactions

involving mere sale or lease of goods.´




Technology ± Includes«

K nowledge And Methods necessary to carry on or to

improve existing production of goods and services

Entrepreneurial Expertise ± provides that essential

Competitive Advantage

Professional K now-how - provides that essential

Competitive Advantage

Type, level and speed with which tech developments are

adopted and diffused.

Technology considered one of the eight factors in GCI ±

WEF- email, e-commerce ± huge cost savings in B2B

Internet




Innovation

Determines competitive advantage and consequently

determines success.

³Significant advances occur in economy in disharmonious

leaps and spurts as entirely new horizons are exploited.

Entrepreneur is the central figure´ ± Joseph Schumpeter

Introduction of a new product

Use of new method of production/opening of new market

The conquest of a new source of raw material supply

The reorientation of an industry




Innovation

Innovation is a very important factor that provides competitive

advantage and, consequently, determines success. Incr Mkt share.

Tin can v/s Aluminum can In the business context ± ³ Innovation means the technical,

industrial and commercial steps which lead to marketing of new

manufactured products and to commercial use of new technical

processes and equipment.

Technical Innovation(Betz) Radical Innovation(steam boat/engine)

Incremental Innovation(governor )

Next Gen Technical Innovation(jet engine)




Calantone and Cooper have identified six major reasons for thenew product failures.

1. The better mousetrap no one wanted (mismatch with Mkt

Research).

Industrial cust will not offer better price but demand better product.

2. The me-too product meeting a competitive brick wall ± entrenched

companies already there.

3. Competitive one-upmanship ± poor mktg. Better firm may loose

out.4. Environmental ignorance ± rules/ regulations,cust pref. right from

conception of product.

5. Technological dog products ± fail on quality or other attribute.

6. The price crunch ± mismatch between value and perceived val prince dudhatra prince dudhatra--97249499489724949948



Rates of Product and Process Innovations




Technology S Curve

Basic level ±

awkward,

dangerous, poor

performance ,Exponential --

Betz

Linear

Phase




Technological Leadership & Fellowship

Tech Leadership ± ³A firm seeks to be the first to

introduce technological changes that support its generic

strategy. Leadership can be established in technologies

employed in any value activity.´

Tech Followership ± ³Refers to a conscious and active

strategy in which a firm explicitly chooses not be the first

one on innovations.´

Which Choice ?(Porter ) ± Three factors

Sustainability of Tech Lead

First Mover Advantages

First Mover Disadvantages prince dudhatra prince dudhatra--97249499489724949948



First Mover ± Run faster!

Advantages Reputation

Preempting a positioning

Switching Costs Unique access for a new product

Proprietary learning curve

Favourable access to new

facilities

Inputs or other scarce rawmaterials

Definition of standards

Institutional barriers against

limitations

Early Profits

Disadvantages Pioneering costs(getting

approvals, code compliance,

educating buyers, high costs of

early inputs, scarcity of supply,

small needs,)

Demand uncertainty

Changes in buyer needs

Specificity of investments to

early generations Factor costs

Tech discontinuities

Low cost imitation




Technology And Competitive

ADVANTAGE ³Tech Change´ is one of the principal drivers of

competition(Porter )- key equaliser, changer

Innovation ± key weapon for sustainingcompetitive advantage (Pearson)- greater qual at

lower costs.

Technological Change may worsen a firm¶s

competitive advantage. Innovation may not meantechnology innovation alone for competitive edge.




So What Does Porter Suggest ± Desirable

Tech Change for Competitive Advantage? Tech change itself lowers cost/enhances

differentiation and tech lead is sustainable.

Tech Change shifts cost or uniqueness drivers infavour of a firm.(can reverse too in favor of

competitors)

Pioneering the tech change translates into first

mover advantage besides inherent benefits of tech.

Tech change improves overall industry structure.

Science & Technology Policy(S&T) prince dudhatra prince dudhatra--97249499489724949948



Sources of Technological Dynamics

Innovative drive of the company. R&D

Customer needs/Expectations- companies could be compelled to be innovative.

(India¶s R&D scene- page 88-89)

Demand Conditions

Suppliers Offerings ± the constr companies for Italian tile indusrty

Competitive Dynamics ± Japan climate and Indian climate -within

Substitutes ± a fn of relative value of price of competing products and switching

costs associated with new products.

Social Forces

Research Organizations/Technical Facilities (ICSR, CFTRI ±baby food ±>Amul)

Govt. Policy




Innovative Drivers




Our S&T Policy

It has to be based on global synergies

Must meet industrial, economic, trade and societalchallenges

Must benefit all sections of the society

Establish linkages between and R&D institutions

TIFAC (Technology Information And Forecasting

Council) Interaction with global R&D organizations-

involving SMEs




Our S&T Policy

Value Additions in products through:

Endogenous Resource And skills

Environmental clean and economically viable process

Closely held technologies that are denied Strategic/dual use technologies

Technology packages as available from commercially operatingunits

Process/product up gradation and incremental productive

improvements Strategic alliances with partners abroad for gaining

market/technology advantage /dominance




Time Lags in Technology

Introductions/Absorption Example of TV in India

Electronic Typewriter ± advent of computer

Pushing obsolete technology to developingcountries ± case of importing second hand plants.

Adoption and diffusion time lags. Even in

developed countries

Food packaging industry ± SCM have improved

marketability of products in the agri sector.




Appropriate Technology and Tech Adaptation-1

Tech suitable in one environment may not be suitable in

another environment

Natural factors

Income levels

Scale of operation

Demand conditions

Use facility characteristics

Customer characteristics

Case of Japan- most appropriate tech form abroad and

source and adapt with a large pool of scientists in the govt.







Appropriate Technology and Tech Adaptation-2

Ltest , most sophisticated tech may not be

appropriate.




ICT AND MARKETING Advances in information and communications technology are

revolutionalising the modus operandi of marketing and the business

system. The business horizon is humming with buzzwords like

internet, world wide web (www), cyberspace, information

superhighways etc. which are changing the way of contacting

customers; order receiving and processing; and networking and

integrating business system. The revolutionary changes being

ushered in by the internet are indeed exciting.




Transfer of Technology

Technology transfer is the process by which commercial technology

is disseminated. This will take the form of a technology transfer

transaction, which may or may not be a legally binding contract,27 but which will involve the communication, by the transferor, of the

relevant knowledge to the recipient.




Levels of TTLevels of TT

Operational Level: At the bottom level are the simplest ones, needed for operating a given plant: these involve basic manufacturing skills, as wellas some more demanding troubleshooting, quality control, maintenanceand procurement skills.

Duplicative Level: At the intermediate level are duplicative skills, which

include the investment capabilities needed to expand capacity and to purchase and integrate foreign technologies.

Adaptive Level: At this Technological Self-reliance level, importedtechnologies are adapted and improved, and design skills for morecomplex engineering learned.

Innovative Level: This level is characterised by innovative skills, based

on formal R&D, that are needed to keep pace with technological frontiersor to generate new technologies.


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Business and Technology Environment-prince Dudhatra-9724949948