3rd wk strategy

8/9/2019 3rd Wk Strategy

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Universiti Malaysia Kelantan Strategy -AA

Strategy and Management of Technology InnovationStrategy and Management of Technology Innovation

Prof. Madya Ir. Dr. Anton Adibroto




What is Strategy?What is Strategy?

Strategy is coordinated set of actions that fulfill a

firm¶s objectives, purposes and goals.

Strategic management is an on going process in

which the organization defines the nature of the

businesses in which the firm will be active.

These broad aspects of strategy then serve as an

umbrella under which the firm can establishpolicies and plans to ensure that its efforts are

consistent and will lead to achieving its objectives,

purposes and goals.




Integrating Management of Technology Innovation and StrategyIntegrating Management of Technology Innovation and Strategy

Technical Capabilities

± Destroy - People

± Preserve through its - Structures ± Develop - Processes

Market Capabilities

± Market-relevant skills

± Sustainable competitive advantage




TechnicalKnowledgeTechnicalKnowledge

Skill to look

differently

Skill to look

differently

Skill to work

with theabstract

Skill to work

with theabstract

Skill toextend

boundaries

Skill toextend

boundariesSkill to

generate new

knowledge

Skill to

generate new

knowledge

Skill to

disseminate

Skill to

disseminate

Skill to

network

Skill to

network

Technology and Competitive advantage




Market Growth Low High Intermediate Low toto low negative

Required Level Very high High to Intermediate Lowof Support Intermediate to low

Diffusion of

Innovation

Embryonic

Time

Innovators/

ForerunnersMainstream

Users Followers

Traditionalists

ProductLife Cycle

TimeGrowth Maturity Decline

Cyclical Model of Technological ChangeCyclical Model of Technological Change




Shifting From an Industry Focus to aShifting From an Industry Focus to a FirmFirm FocusFocus

THE

INDUSTRY

ENVIRONMENT

Competitors

Customers

Suppliers

STRATEGY

STRATEGY

THE FIRM

Goals and Values

Resources and

Capabilities

Structure and

Systems

The Firm-Strategy

interface

The Strategy-Environment

Interface




Components of Firm AnalysisComponents of Firm Analysis

Discovering CoreDiscovering Core

CompetenciesCompetencies

ResourcesResources TangibleTangible IntangibleIntangible

CapabilitiesCapabilities

CoreCore

CompetenciesCompetencies

CompetitiveCompetitive

AdvantageAdvantage

StrategicStrategicCompetitivenessCompetitiveness

Four CriteriaFour Criteria

of Sustainableof Sustainable

AdvantagesAdvantages

ValuableValuable

RareRare

Costly to ImitateCostly to Imitate

Non Non--substitutablesubstitutable

ValueValue

ChainChain

AnalysisAnalysis

OutsourceOutsource




Three Conditions Affecting Managerial Decisions AboutThree Conditions Affecting Managerial Decisions About

Resources, Capabilities, and Core CompetenciesResources, Capabilities, and Core Competencies

UncertaintyUncertainty regarding characteristics of the general and theregarding characteristics of the general and the

industry environments, competitors¶ actions, and customers¶industry environments, competitors¶ actions, and customers¶

preferencespreferences

ComplexityComplexity regarding the interrelated causes shaping a firm¶sregarding the interrelated causes shaping a firm¶s

environments and perceptions of the environmentsenvironments and perceptions of the environments

IntraIntra--organizational Conflictsorganizational Conflicts among people makingamong people making

managerial decisions and those affected by themmanagerial decisions and those affected by them

Managerial Consideration of Internal AnalysisManagerial Consideration of Internal Analysis




Identifying core competenciesIdentifying core competencies

CCs provides potential access to a wide variety of markets

CCs should make a significant contribution to the

perceived customers benefits of the end product

CCs should be difficult for competitors to imitate

CCore competencore competenciiees (CCs)s (CCs) are the collective learningare the collective learning

in the organizationin the organization




z Core competencies should constitute the focus

for strategy at the corporate level

z A company must be viewed not only as a

portfolio of products or services, but a portfolioof competencies as well

zz McKinsey and Co. recommends using three toMcKinsey and Co. recommends using three to

four competencies when framing strategicfour competencies when framing strategic

actionsactions

Core Competencies andCore Competencies and StrategyStrategy




Resources as the Basis for Superior ProfitabilityResources as the Basis for Superior Profitability

((Tangible and IntangibleTangible and Intangible))

Rate of Profit

in Excess of the

Competitive Level

Brands

Product technology

Marketing

capabilities

Process technology

Plant size

Low-cost inputs

Bargaining power

with suppliers

Market share

Patents

Brands

Retaliatory

capability

Differentiation

Advantage

Cost

Advantage

Vertical Power

Monopoly

Barriers to Entry

Industry

Attractiveness

Resources and

capabilities




Any recipe for success ? Any recipe for success ?

Business Focus

Adaptability

Organizational cohesion

Entrepreneurial culture

Sense of Integrity

Hands-on top management

Successful high-tech firms tend to score high in most

of the 6 categories, less successful firms score low in

several




Business FocusBusiness Focus

Leaders in high-tech fields (computers, aerospace,semiconductors, biotechnology, chemicals,pharmaceuticals, electronic instruments) focus ona single product line or a closely related set of product lines

Concentrate R&D in one-two areas

Maintain technological leadership

Example: HP has two product families (electronic instruments and data

processing), each accounting for half of the sales IBM targets business market: data processors and office equipment

RCA: conglomerate with flat sales

Efforts to exploit its strengths: communication and entertainment.Strategy: divest non-profitable businesses




Adaptability Adaptability

Undertake major and rapid change whennecessary

Track and exploit rapid shifts and twists in market

boundaries, as technology changes

Organizational Flexibility: frequent realignment of

people and responsibilities




Organizational CohesionOrganizational Cohesion

Integrate across functions (product design,marketing, manufacturing)

Open-style communication with top management

Technical Forums

Point: understand where the firm is going andsubordinate own unit interests with the commonorganizational goal

Facilitate sense of commitment and loyalty to the firm

through:

Job rotation

Multidisciplinary project teams

Proper Training




Entrepreneurial CultureEntrepreneurial Culture

One of the most important characteristics of asuccessful high-tech firm

Small firms vs Large firms

Advantages: know each other, access to multiple

funding channels Large high-tech firms try to recreate the

entrepreneurial climate of small firms: havedivisions and subdivisions

Funding channels: own division, corporate R&D, the newventure division

Tolerance of failure

Opportunity to pursue outside projects




Sense of IntegritySense of Integrity

Higher order ethical values, honesty, fairness,openness in the relationships with stakeholders,

customers, competitors

Do not promise what you cannot deliver to

customers, stakeholders or employees




HandsHands--on Top Managementon Top Management

Top-management usually major agent of change Understand and make decisions about:

The direction and speed of change

The available technological options Their costs and probability of failure

Potential benefits




The six themesThe six themes

Business focus, organizational cohesion andintegrity ± imply stability

Adaptability, entrepreneurial culture and hands-on

top management - imply rapid change




Tutorial QuestionTutorial Question

How to manage the conflict between the needfor stability and the continuous pressures of

technological change ?

1. Apple2. Dell

3. HP-Compaq

4. IBM

3rd wk strategy

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