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Introduction Technology is an expression of human
creativity. Managing technology is involves continuous
effort in creating technology, developing novel products and services, and successfully marketing them.
This requires great creativity along with a system designed to exploit it. It also required investment in R&D. R&D is a costly endeavor.
It is a risky investment and therefore needs to be well managed.
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Creativity factor Technology is an expression of human
creativity. Creativity:
Invention Creation of novel technology from scientific
discoveries Innovation
Creation of products, services, processes that are new to an organization.
To satisfy customer needs by integrating existing technology and invention.
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Link between science & technology
Invention
Scientific Discovery
Innovation
Market
Buying or ignoring the innovation
May never be developed into marketable products
Has no instantaneous
commercial valueAdopting invention
stimulate
time lags
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Types of innovation An innovation must contribute to the
creation of value. Radical breakthrough innovation
Usually based on an invention, e.g. semi-conductor, chips, …
Incremental or evolutionary innovationImportant improvement in products, process or services, e.g. portable PC in 1981, Windows technology
Routine innovationNew to the firm but very similar to what it had in the
past
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Creativity and innovation
Innovation – creation of value or satisfaction of a customer need.
Creativity – engine of innovation Combining two or more ideas to arrive at an
entirely new one. to fix a previous problem to adapt with new technology or new society to block customer switching cost...
Depends on both people and environment.
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Characteristics of creative environment in an organization Permits people to work in areas of
their greatest interest. Encourages employees to have broad
contact with stimulating colleagues. Allows taking moderate risks. Tolerates some failures Provides appropriate rewards and
recognition.
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Bringing innovation to market
Manipulation of time span is an important and effective competitive weapon.
A company that owns a technological innovation may want either to delay or to speed up the diffusion of technology in market in order to fully exploit its benefits. E.g. Osborn Computer Company
The sooner an innovation reaches the marketplace, the sooner a company can reap its rewards.
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Technology-price relationship
Technology Gap between owner and customer
Pric
e
Technology gap , price ;
Technology gap , price
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Time or Diffusion
Tec
hnol
ogic
al K
now
ledg
e
Gap
Owner knowledge
Customer knowledge
Customer can improve on the initial technology.
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Managing change
Management must be able to deal with both stability and change.
Managers of technology must be able to recognize and react to external change as early as possible.
Example: the failure of Kodak Company
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Changing Trends in Industry
Factor Traditional New
1 Life cycle Long life cycles Short life cycles
2 Innovation Few Continuous
3 Competition Expected;Competitors are the enemy;Cooperation not allowed
Stronger;Alliance with competitor accepted
4 Market Expected; Local Uncertain; Global
5 Quality Firm Desirable Customer Desirable
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6 Production Mass; no commitment to suppliers; large inventories; fixed manufacturing
Customerized; suppliers are partners; reduced inventories; flexible manufacturing
7 Organization Large corporations vertically; integrated companies; bureaucratic organizations; financial methods control the organization
Smaller plants; companies rely on outsourcing; nimble organizations; financial methods to serve the organization’s objective
Changing Trends in Industry (con-)
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Being a Technology leaders or followers
A leader is a firm that is the first to market an
innovation. A follower
This firm misses the initial wave of capitalization on the technology but recognizes the technology’s impact on its business. She follows closely behind the leader
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Advantages of being a leader innovation
Name recognition Better market position A chance to define the industry
standard A head start on the learning curve Protective barriers
(e.g. through patents) High profit
due to technology gap between customers and products
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Delayed customer switching Favorable response by outsiders
Supports from government, venture capitalists, other industrialists.
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Disadvantages of being a leader
Large cost associated with research, prototyping, testing and overall development
Costs associated with updating the technology
Initial investment in design and production may create difficulty, if a competitor introduce a better technology or an improved design
Market uncertainty As a target for competition
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Outcome from innovation process
- Pilkington (Float Glass)
- G.D. Searle (NutraSweet)
- Du Pont (Teflon)
- RC Cola (Diet Cola)
- EMI (Scanner)
- Bowmar (Calculator)
- Xerox (“Star”)
- DeHavilland (Comet)
- Kodak (Instant photography)
- Northrup (F20)
- DEC (PC)
- IBM (PC)
-Matsushita (VHS format for CR)
- Seiko (Quartz watch)
WIN
LOSE
INNOVATOR FOLLOWER
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How can innovation leaders sustain their leadership ?
To invest in R & D to continue the development of technology.
To build technological resources. To diffuse their own technology
while delaying competitors from getting into the technology.
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How can a follower firm do ?
To examine a leader’s product and to attack it at its weakest point.
To have lower initial investment in R & D.
To improve on what already exists.
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Introducing environmentally Friendly Technologies
Technology that not harm to the world and human.
Some fundamental principles are as follows: Reduce, Reuse, Recycle and Replace the use
of natural resources (the 4 R) The selecting technology consider Economic
Feasibility, Endowment Rationality and Environment Sustainable (the 3 E)
Green Technology
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Example: Using less polluting and less hazardous raw materialsIn October 1990 McDonald’s in US switched from plastic clamshell hamburger boxes to paper wrappers (Recyclable and biodegradable) Example : Modifying products to minimize
use of hazardous materials and processes Many pharmaceutical companies now try to
use water-based coating instead of solvent based coatings for tablets. This reduces solvents spray emissions into air.