TECHNOLOGY
MANAGEMENT
Linking Technology Strategy to
Competitive Strategy
Aryantono
Supervisor: Prof. Allan S. Carrie
Technology Management
Outline of Presentation
• Background of Research Work
» Research Problem
» Research Objectives
• Theoretical Framework
• Research Design
• Model, Hypothesis and
Expected Research Findings
Background of Research Work
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 Work
Industrial Environment - Technology Strategy
The nature of competition is different among industries
A key insight in the study of the intensely disruptive
turbulent industrial environment is that the strategic paradigms
that work well in one environment don’t work at all in another.
What should firm do in order to maintain its competitiveness
in the dynamics of competition?
Research 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?
Research Objectives
The overall objective of this research is to provide a better
understanding about the correlation between the nature of
competition 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.
Theoretical Framework
Industrial Environment
Industrial categories and their ways to create or maintain
strategic supremacy
Competitive Strategy
Strategic choices according to create competitive
advantage
Strategic Management of Technology
• The internal consistency of a firm’s technology strategy
• The dimensions of technology strategy
Industrial Environment:
Four Patterns of Varying Turbulence (D’Aveni, 1999)
Competence Enhancing/
Neutral
Equilibrium
Competence Destroying
Infrequent Disruptions
Punctuated Equilibrium
Occasional Upheaval
Stable and Low
Turbulence
Frequent Disruptions
Fluctuating Equilibrium
Fluidly Changing
Turbulence
Time
Turbulence
Time
Disequilibrium
Chaotic
Turbulence
Time
Time
Industrial Environment
Industrial categories and their ways to create or maintain
strategic supremacy (D’Aveni, 1999)
Dampening Strategy of Dominant Player
Disruptive Strategy of Challenger
Equilibrium
Use barriers to entry
Use disruption to break down the barriers
Fluctuating
Equilibrium
Build around core competencies by Use disruption to shift the core
leveraging them into many markets and competencies needed to succeed so the
enhancing them by layering new incumbent’s current strengths become
competencies over them
weaknesses
Punctuated
Equilibrium
Use standards to create a stable industry
structure around a standard value
proposition and then respond to major
revolutions when necessary
Be contrarian. W hen the incumbent is
disrupting, win by improving and
promoting the old model, and when the
incumbent is seeking stability, disrupt
Disequilibrium Use a strategy of continuous disruption to
stamp out the disrupter and sustain
supremacy. The goal is to beat the
disrupter at its own game and use
resources to outlast it
Disrupt the dominant firm frequently; wear
it down by keeping it off balance, by
attacking more intensely, more swiftly, and
unpredictably, and by being more efficient.
Environment
Competitive Strategy
Categories of industries and strategic choices
Environment
Equilibrium
Strategic Choices
 Creating a stable domain
 Single-core technology
 Cost efficiency, cost minimization
 Narrow segment
Fluctuating
Equilibrium
 Differentiation, unique along several dimension
 Continuously developing domain
 Searching new product and market opportunities
Punctuated
Equilibrium
 Searching new product and market opportunities
 Maintaining traditional products and customers
Disequilibrium  Creating and exploiting new product and market
opportunities
Strategic Management of
Technology
•The internal consistency of a firm’s technology strategy
•The dimensions of technology strategy
Strategic Management of Technology:
The 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 MOT
based on what firms aim to achieve by their doing.
Such an examination helps us to identify the ends
of MOT and their relationship.
Strategic Management of Technology
The Ends of MOT
By analysing the literature, it can be argued that the
ends 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 Technology
The Perspective
Moreover, Strategic MOT can be viewed by using two
perspectives:
 Purpose/ throughput process(es). In regard to this
perspective, Strategic MOT concerns to develop and
direct technology, in the light of a firm’s objectives,
opportunities and resources.
 Structure/inter-organisational relationship . In
regard to this perspective Strategic MOT is concerned
with the flexibility of organisation, regarding
technological change. Integration, co-ordination and
inter-organisational relationship are perceived as a
strategic consideration of MOT. Again, such factors are
defined in the light of a firm’s objectives, opportunities
and resources.
Strategic Management of Technology:
The Definition
Concerning the ends of MOT, strategic MOT process
can be defined as the continuing redefinition and
achievement or exploitation of a firm’s technological
opportunities, objectives, resources and the
maintenance of appropriate relationship between
them.
With the above consideration in mind, The Strategic
MOT can be shown in diagrammatic form in the
following figure:
•Internal
•External
Opportunities
Structure
Purpose
(re)defining and maintaining
the relationship between
objectives and resources
Perspectives
The Dimensions of Technology Strategy:
The Perspective on Strategic MOT - The
characteristics OF MOT
Characteristics of MOT
Perspective
Acquisition
Management
Exploitation
Management
Purpose
Technological
thrust
Type of
technological
innovation
Structure
Acquisition
method
Exploitation
method
The Dimensions of Technology Strategy:
Objectives - Resources
Resources
Human
Technology
R&D
Continuous
Development
Program
Technological
investment
Organisation
Organisational
structure
Technological
competence
Objectives
•Internal
•External
Opportunities
Technology
Human
5. Technological 7. Continuous Dev.
R&D
Program
Investment
Org. 6. Technological 8. Organisational
Competence
Structure
Research Design
Literature Review
Industrial competition, competitive strategy,
technology strategy
Model Building
Model
Data Collecting
Survey/interview
Testing and Analysis
Conclusion
Descriptive analysis
Model Building
The nature of competitions
Competitive Strategy
Technology
Strategy
Model, Hypothesis and
Expected Research Findings
Environment
Dimensions
Technological Thrust
Acquisition Method
Technological Innovation
Exploitation Method
R&D Investment
Technological Competence
Continuous Development
Program
Organisational Structure
Equilibrium
Fluctuating
Equilibrium
Punctuated
Disequilibrium
Equilibrium
Model, Hypothesis and
Expected Research Findings:
examples
Environment
Equilibrium
Fluctuating
Equilibrium
Technological Thrust
less current
close to state
of-the-art
close to
state ofthe-art
as state-of-theart
Acquisition Method
License-In
ContractedOut R&D
Joint
Venture
Internal R&D
Technological Innovation
Continuous
incremental
innovation
Dimensions
Exploitation Method
License-Out
Punctuated
Disequilibrium
Equilibrium
Robust design
Competenceshifting
Joint Venture
ContractedOut
Manufacture
or Marketing
 Novelty
 Competenceshifting
Employ In Own
Production or
Product