Chapter 7 of SBD
Chapter 1 of MTI
Is a complex term that includes art, science, engineering,
devices, methods, and know-how thet are applies in a
It usually take the form of product and processes that
can be used to create solutions.
In particulary it is true for hardware and software
Is a subset of strategic technology management and the
systematic creation of new-to-the-world technologies
that are superior to their predecessors and the
improvements of exisisting technology platforms and
Strategic Technology Management
Technological innovation is an important strategic issue today.
Recently, extensive analyses of automotive suppliers and industrial
manufacturers. The findings suggest there are considerable strategic risks
associated with the management of new technologies.
Patented technologies and the ability to create value-added features using
those technologies are valuable differentiators which contribute to high profit
margins. However, technology that remains static can not maintain a premium
position in the marketplace.
example: As seen with anti-lock brake systems and airbags, even the most
advanced technologies will eventually become commodity items.
The market entry phase
New-technology suppliers should reinvest profits
from the current technology into the next-
In the innovation phase, suppliers should
strategically reposition the current technology to
focus on the emerging low-cost commodity phase.
Those who fail to recognize the different phases and
adjust their management approach over time will
suffer the consequences.
Over the last five years, some well-known suppliers sold or spun-off
their automotive business units in the face of general under-
performance, compared to non-automotive operations.
Among them are A. O. Smith, Rockwell, Allied-Signal, ITT, United
Technologies and Cooper Industries.
For conglomerates, divestiture of an unprofitable business is a luxury
that other suppliers do not have.
These suppliers have no alternative: to improve or to die.
If the 1990s was the decade of turmoil in the automotive industry, the
first decade of the twenty-first century will be one of survival.
This is not a doomsday prophecy but simply a stricter application of the
Darwinian theory. As the competition extends and intensifies globally,
automotive suppliers should be more aware of the changes in the
environment in which they operate; accurately assess the implications
of those changes; and position themselves accordingly.
The window of opportunity for a new technology is
considered to be about 10 years, depending on the
technology. Within this ten year window, there are
three product phases, namely:
Phase 1 - Market Entry phase - rapid market
penetration to gain economies of scale
Phase 2 - Innovation phase - technological change
to drive down cost while adding features
Phase 3 - Commodity phase - process driven phase
where manufacturing cost control is essential for
Strategic technology management
Technology: couse or solution? Managing technological change
Technological forecasting and assessment
Stability or change?
Strategy for innovation
Technology life cycle: P
Is a time based theory of E
technological change that R
use the S curve to depict the F Exponential growth
development and growt of a
Construct for managing change
Type of development projects
Innovative strategic action
Creative strategic actions
Hierarchy of innovation and
Convergence of balanced technological and
Quality Ultra Clean
Low costs No Waste
Social High Efficiency
Technological Love Noise
Market Innovation Stakeholder
attributes attributes attributes
innovation and why
is it important?
R&D AND PROCESS
…see you next lesson!