Integrating Technology and Strategy
A General Management Perspective
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Outline
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Introduction
Key concepts concerning technological innovation
and their interrelations
The integration of technology with business
and corporate strategy
A framework for auditing and assessing the firm’s
innovation capabilities
Conclusion
Introduction
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To deal with issues of technology and innovation
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Key task of the general manager
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Acquire, develop, and allocate an organization’s resources
Develop and exploit the firm’s capacity for innovation
Outline
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Introduction
Key concepts concerning technological innovation
and their interrelations
The integration of technology with business
and corporate strategy
A framework for auditing and assessing the firm’s
innovation capabilities
Conclusion
Definitions
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Discovery and invention
 We discover what before existed, though to us unknown; we invent
what did not before exist. (Is it true/real?)
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Technology
 The theoretical and practical knowledge, skills, and artifacts that can
be used to develop products and services as well as their production
and delivery system. (Can it do the job?)
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Technical innovation
 Using technology to develop commercial products and services.
(Can it do the job profitably?)
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Technological Entrepreneurship
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Entrepreneurship is a fundamental driver of the technological
innovation process.
Technological entrepreneurship refers to activities that create new
resource combinations to make innovation possible, bringing
together the technical and commercial worlds in a profitable way.
Technological entrepreneurship can involve one individual
(individual entrepreneurship) or the combined activities of multiple
participants in an organization (corporate entrepreneurship)
The Relationships among Key Concepts Concerning
Technological Innovation
Technical world
Technological entrepreneurship
Commercial world
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Administrative capabilities
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Results Invention/discoveries/technologies
Activities
Research
activities
Tinkering/
experimenting
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Development
activities
Technological innovation
Product/process
development
activities
Market
development
activities
Outline
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Introduction
Key concepts concerning technological innovation
and their interrelations
The integration of technology with business
and corporate strategy
A framework for auditing and assessing the firm’s
innovation capabilities
Conclusion
Integrating Technology and Strategy
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Perspectives on strategy
 Positive view --Actuarial strategy reflects management beliefs
 Normative view -- what the firm’s strategy should do
 Product-market view-- how the firm competes with its product
 Resource-based view -- how the firm secure the factors needs
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Generic Strategy
overall
Overall cost
leadership
focus
Focus-segment
cost leadership
Overall
differentiation
Focus-segment
differentiation
The areas of
competition
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The way of creating the value
Generic Strategy
Overall cost
leadership
Overall
differentiation
Focus-segment Focus-segment
cost leadership differentiation
Technological policies
Product
technological
change
Product development
to reduce product
cost
Product
development to
enhance quality
IBM
Process
technological
change
Process development
to enhance
economies of scale
Process
development to
support high
tolerances
Product
development to
support only
enough
performance
Product design to
meet exactly the
needs of particular
segment
Process
development to
tune production to
segment needs
Process
development to
tune production to
segment need
Benetton
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The Product / Technology Matrix
Product A Product B
Technology 1
Technology 2
Technology 3
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Technology K
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(*)
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Product N
Developing the Technology Portfolio
Bet
Technology
importance
Draw
Warrant the firm’s
full commitment
Be positioned
ambiguously
Cash in
Fold
Should be
examined carefully
Reconsider its
investments
Relative technology position
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Matching Business & Technology Portfolios
Business
Technology
Attractiveness
Importance
B
A
B
Competitive position
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A
Position
Representative Technologies
in a Firm’s Value Chain
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Transportation
technology
Material
handling
technology
Basic product
technology
Machine tool
technology
Transportation
technology
Packaging
technology
Media
technology
Audio & video
recording
technology
Diagnostic and
testing
Information
system
Inbound
logistics
Operations
Outbound
logistics
Marketing
sales
Service
Technology Life Cycle & Competitive Advantages
Life Cycle
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Importance of Technologies for Competitive Advantages
Emerging
Technologies
Have not yet demonstrated potential for changing the basis
of competition.
Packing
Technologies
Have demonstrated potential for changing the basis of
competition.
Key
Technologies
Are embedded in and enable product/process.
Have major impact on value-added stream.
Allow proprietary/patented positions.
Base
Technologies
Have minor impact on value-added stream; common to all
competitors; commodity.
Outline
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Introduction
Key concepts concerning technological innovation
and their interrelations
The integration of technology with business
and corporate strategy
A framework for auditing and assessing the firm’s
innovation capabilities
Conclusion
Innovative Capabilities Audit Framework
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Innovative Capabilities
 The comprehensive set of characteristics of an organization that
facilitate and support innovation strategies.
 Business Unit
 Corporate
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Business Unit Level
Resource
availability
Understanding
competitors’
innovative
strategies and
industry
evolution
Business unit
innovative
strategies
Business unit
structural
and cultural
context
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Understanding
business unit
technological
environment
Business unit
strategic
management
capacity
Corporate Level
Resource
availability
and allocation
Understanding
competitors’
innovative
strategies and
multi-industry
evolution
Corporate
innovative
strategies
Corporate
structural
and cultural
context
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Understanding
corporate
technological
environment
Corporate
strategic
management
capacity
Outline
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Introduction
Key concepts concerning technological innovation
and their interrelations
The integration of technology with business
and corporate strategy
A framework for auditing and assessing the firm’s
innovation capabilities
Conclusion
Conclusions
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Leadership