TM - strategy2

8/3/2019 TM - strategy2

http://slidepdf.com/reader/full/tm-strategy2 1/42

Management of Technology

M. Tech in Technology Management

Dept. of Futures Studies

University of Kerala

N.K. Ajith Kumar

Consultant, Jeeth Consulting



Business Strategy and Technology

Strategy Business competitiveness is no longer a matter of choice but is a

matter of survival in the global marketplace

Achieving organizational goals and competing successfully, intimes of fast changing business environments, require the

development of sound strategies



Strategy

Strategy involves envisioning and planning for the future Means by which the organizational objectives will be achieved

Represents a broad formula of how an organization intends tosucceed

Details a plan that needs to be followed to compete and win Entails defining goals, setting action plans to execute specific

tasks, and following up on accomplishments to ensure thatobjectives have been met

Strategy is to think about what should be done regardless of

what have been done





Strategic Management

A process consisting of three important and interrelatedcomponents

Strategic planning Strategic vision setting

Strategy formulation

Strategizing – envisioning, brainstorming for ideas Strategic implementation

Details actions that need to be followed

Designate functional units responsible for implementingoperational actions

Tactics and systematic planning Strategic evaluation

Performance measures

Feedback mechanisms

Continuous improvement

Organizational learning



Strategizing Envisioning

Brainstorming for ideas Thinking about the future

Analyzing existing conditions in society, the industry and themarket place

Strategizing should result in a vision, a mission and a set of objectives that will set the direction of the organization

The planning process charts the path to the objectives and thesystems that will follow-up on performance

If managers spend more time on planning than on strategizing,they tend to lose sight of what they should be doing as opposedto what they have been doing



Strategizing Strategizing is distinguished from planning by the degree of

innovation included tin the strategy (Hamel, 1996)

Planning is about programming, not discovering

A company that performs strategic planning as a routine exercise without periodically questioning its directions or pursuing

innovative approaches can become stagnant and may lose itscompetitive edge



Formulation of Strategy

Formulation of Strategy requires a core and operating units toexecute the strategy

The core of the strategy is based on the mission, the vision andthe objectives and goals that need to be realized

The operational units of an organization execute the strategy according to established policies

They may be divided by function or by group of functions as setup by the organizational structure

A B

F C

E D

Mission, vision,

objectives and

goals




Strategic management is a critical undertaking that involvesformulating, implementing and evaluating cross-functionaldecisions that enable an organization to achieve its objectives

Central to the formulation of a strategy is the existence of a

vision and mission for the business A business is defined by its mission, not by its name, status, or

articles of incorporation (Drucker, 1974)

A mission statement specifies the reasons for which the businessis established.

“To supply safe, reliable, reasonably prized electric service to itscustomers” – FPL




A mission statement provides a foundation for establishinggoals, plans, priorities and work assignments

A mission statement describes an organization’s purpose,customers, products and services, market, philosophy and basic

technology

A vision provides a picture of a different reality for the future

A vision statement of a business answers the question – what do we want to become ?

A vision gives a business direction Also inspires employees to be committed and to work towards

achieving future objectives

“ We want to be the best managed electric utility in the USA” -

FPL



Context of strategy formulation





Methods used in strategic analysis

and decision making

The available information required for decision makingand for selecting appropriate strategies is frequently fuzzy

In the business world decision making is an imperfect

process in a highly dynamic environment Even so, strategic planners must still device plans and make

decisions, and these should be made on the basis of knownfacts and the best available information

One approach in this situation is to construct and usedecision-matrix techniques to guide decisions according toa selected set of criteria



Product evaluation matrix

Used by 3M company 3Ms philosophy is that any idea is worth pursuing; if the company has

strength or can connect innovation to one of its divisions, the idea isexplored internally. Otherwise, the inventors are encouraged to pursueideas outside the company



Market-Growth-Market-Share

analysis matrix Popularized by the BCG group

Known as the portfolio matrix because it can be used toanalyze a corporate stockholding portfolio for investmentdecisions



Market-Growth-Market-Share

analysis matrix

Classifying a company into one of the four categories of thematrix is helpful in deciding on the strategy necessary toimprove its performance

The common business wisdom is to nourish the stars, milkthe cows, get rid of the dogs and nurse the problemchildren



Strategies to use in conjunction

with a portfolio matrix



X-Y Coordinate positioning method

The positioning methodology assists in recognizing therelative standing of a company or product with respect to acompetitor



M-by-N matrix

Can be used as an aid to decision making when decisioncriteria have multiple levels

More refined classification and more decision options



Market-Technology (M-T) matrix

Used to analyze the technical and marketing competencenecessary for strategic decision making in productinnovation



Multi-technology, multi-attribute

decision matrix



Multi-technology, multi-attribute

decision matrix





Strengths, Weaknesses,

Opportunities, Threats matrix

Analysts can review the factors listed in the SWOT matrixand develop four types of strategies (SO, WO, ST, WT)



Technology strategy

Technology is at the core of systems designed to satisfy societal and customer needs

Companies are formed to provide a structure and amechanism that facilitate the spinning out of technology to

satisfy those needs The purpose of business strategy is gain a sustainable

economic advantage

The purpose of technology strategy is gain a sustainable

technological advantage that provides a competitive edge The two strategies must be closely intertwined and highly

integrated

The effective TM is based on successfully linking business

and technology strategies



Technology strategy

Technology strategy is concerned with exploiting,developing and maintaining the sum total of thecompany’s knowledge and abilities

In order to use technology as a competitive weapon,managers must manage it as part of the businesssystem

Technology strategy must be formulated within the

larger context of business planning



Vehicle for creating wealth



Core competence

Fundamental concept in the formulation of technology strategy is Core Competence

Inner strength upon which a strategy should be built

Collective sets of knowledge, skills and technologiesthat a company applies to add value for its customers;this is what determines the company’s competitiveness



Core competence

An organization can be as a bundle of resources, and itis some of these resources that enable the firm toobtain sustainable competitive advantage

Resource: anything which could be thought as astrength or weakness of a given firm; assets which aretied semi-permanently to the firm

Resource vs. capability

Tangible vs. intangible resources Core competence : bundle of skills and technologies



Core competence

A resource must possess a number of characteristics forbeing source of sustainable competitive advantage

Resource must be valuable

Resource must be rare – differential ability

Resource must be imperfectly mobile Resource must be imperfectly imitable – isolating

mechanisms (casual ambiguity)

No strategically equivalent substitutes

Tacit knowledge “we can know more than we can tell”

Can’t be verbalized (personal knowledge); practical(knowledge about how to do things), context-specific(organization-specific)



Core competence - Isolating

mechanisms

Casual ambiguity : powerful block on imitation andmobility

Time compression diseconomies : history dependent-

routines, culture, past investments –development timecan’t be compressed

Asset mass efficiencies : initial level of an assetinfluences the pace of further accumulation

Complexity and social complexity :

Specificity :

Codifiability :





Corporate core competencies





Technology and core competence

Technology in a company consists of three layers Distinctive technologies – source of sustainable

competitive advantage

Basic technologies – survival technologies

External technologies



Integration

Vertically integrated corporation : When a corporationowns or has control over all or most of thetechnologies that contribute to producing ormarketing a product



Boundaries of the integration

decision



Integration Backward integration : company seeks ownership or

control of its suppliers

Horizontal integration : increased control overproduction competitors

Forward integration: company seeks to controldistribution, retailing and post-manufacturingactivities

Outsourcing





Linking technology and business

strategies



Linking technology and business

strategies



Product-technology-business

connection Breakdown each product or service into its constituent

technologies

Documents

TM - strategy2