Introduction to Technology Management -Student material-

Transcription

1 Introduction to Technology Management -Student material- Manuel Lorenzo Hernández Head of Technology & Innovation, Ericsson España S.A. Last updated: 16 March 2010 with a big Thank You to Chalmers University

2 Outline Introduction 10 The Dynamics of High Technology 50 Market & Technology 25 Strategy & Technology 25 Questions 10 Introduction to Technology Mgmt - Student Material 2(62)

3 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations How does adoption of technology evolve with time? Number of Adopters Time Introduction to Technology Mgmt - Student Material 3(62)

4 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations s-shaped Curve / Bass Diffusion model (F. Bass) Number of Adopters Cumulative Number of Adopters Source: Rogers, E.(1962->2003) Diffusion of Innovations Time Introduction to Technology Mgmt - Student Material 4(62)

5 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations s-curve for Cumulative Adoption & Bell Curve for New Adoption Number of Adopters Cumulative Number of Adopters New Adopters Source: Rogers, E.(1962->2003) Diffusion of Innovations Time Introduction to Technology Mgmt - Student Material 5(62)

6 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations What is the social Influence on Technology Adoption? Introduction to Technology Mgmt - Student Material 6(62)

7 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations Social Model for Technology Adoption(E. Rogers) Source: Rogers, E.(1962->2003) Diffusion of Innovations Introduction to Technology Mgmt - Student Material 7(62)

8 The Dynamics of High Technology Technology Adoption/ Diffusion of Innovations Case of Discontinuous Technology Changes (Moore): Between Early Adopters (visionaries) and Early Majority (pragmatists) there is a chasm that only some technologies and business models succeed in crossing The Chasm Techniques to successfully cross the "chasm," include choosing a niche target market, understanding the whole product concept, positioning the product, building a marketing strategy and choosing the most appropriate distribution channel and pricing Source: Moore, G.( ) Crossing the Chasm Introduction to Technology Mgmt - Student Material 8(62)

9 The Dynamics of High Technology Technology LifeCycle: Innovation Performance Evolution vs. Time (or Engineering Effort) Performance Time or Engineering Effort Introduction to Technology Mgmt - Student Material 9(62)

10 The Dynamics of High Technology Technology LifeCycle: Innovation Performance Evolution vs. Time (or Engineering Effort) Learning Performance Performance Time or Engineering Effort Introduction to Technology Mgmt - Student Material 10 (62)

11 The Dynamics of High Technology Technology LifeCycle: Innovation The conventional Technology S-Curve Performance Second Technology Third Technology First Technology Source: Christensen, C.(1997) The Innovator s Dilemma Time or Engineering Effort Introduction to Technology Mgmt - Student Material 11 (62)

12 The Dynamics of High Technology Technology LifeCycle: Innovation Disruptive Technology S-Curve Performance in Market A Performance in Market B Technology 2 Technology 1 Source: Christensen, C.(1997) The Innovator s Dilemma Time or Engineering Effort Introduction to Technology Mgmt - Student Material 12 (62)

13 The Dynamics of High Technology Technology LifeCycle: Innovation The impact of Sustaining and Disruptive technological change Performance Progressduetosustaining technologies Performance at the high end of the market Performance at the low end of the market Source: Christensen, C.(1997) The Innovator s Dilemma Time or Engineering Effort Introduction to Technology Mgmt - Student Material 13 (62)

14 The Dynamics of High Technology Technology LifeCycle: Innovation The impact of Sustaining and Disruptive technological change Performance Disruptive Technological Innovation Progressduetosustaining technologies Progressduetosustaining technologies Performance at the high end of the market Performance at the low end of the market Source: Christensen, C.(1997) The Innovator s Dilemma Time or Engineering Effort Introduction to Technology Mgmt - Student Material 14 (62)

15 Learning The Dynamics of High Technology Learning Cycles & Competition Time Introduction to Technology Mgmt - Student Material 15 (62)

16 Learning The Dynamics of High Technology Learning Cycles & Competition T P S E C Time Technologies Performance Segmentation Efficiency Complementarities A number of technologies (most of them disruptive) proliferate. Different companies bet on different ones. At the end a particular technology (e.g. gasoline engine in the car industry) dominates and the many companies that bet on a different technology disappear At this stage performance is measured primarily on a single dimension (e.g. image resolution). Competition is often focused solely on that single dimension The competitive advantage goes to the company able to execute the learning cycles faster As product performance improves, certain customer segments start valuing different product dimensions price, availability, The winners are those companies that are able to read the market and understand the differences across market segments As the technology market is becoming mature, competing players focus more and more in efficiency and sustaining technologies Radical innovations may appear and force the start a new lifecycle The focus shifts to manage complementarities: synergies with other products and businesses, networks with partners, At this stage companies are most vulnerable to radical changes in their environment Source: Davila et al (2005) Making Innovation Work Introduction to Technology Mgmt - Student Material 16 (62)

17 Market and Technology The Business Model construct Technical Inputs Feasibility Performance Other Business Model? Economic Outputs Value Price Profit Other Measured in Technical Domain Measured in Social Domain Source: Henry Chesbrough (2003) Open Innovation: The new imperative for creating and profiting from technology Introduction to Technology Mgmt - Student Material 17 (62)

18 Market and Technology The Business Model construct A new cool Technology does not have a value per se; a suitable Business Model must be found and applied Technical Inputs Feasibility Performance Other Measured in Technical Domain Business Model: Value proposition Market Segment Position in the Value Chain Cost Structure and Target Margins Value network Competitive strategy Economic Outputs Value Price Profit Other Measured in Social Domain Source: Henry Chesbrough (2003) Open Innovation: The new imperative for creating and profiting from technology Introduction to Technology Mgmt - Student Material 18 (62)

19 Market and Technology The Business Model construct VALUE PROPOSITION What? COST STRUCTURE AND MARGINS How much? MARKET SEGMENT Who to? VALUE NETWORK Whowith? POSITION IN VALUE CHAIN Where? COMPETITIVE STRATEGY How to? Introduction to Technology Mgmt - Student Material 19 (62)

20 Market and Technology Business Model Examples Subscription business model Razor and blades business model (bait and hook) Pyramid scheme business model Multi-level marketing business model Network effects business model Monopolistic business model Cutting out the middleman model Auction business model Online auction business model Bricks and clicks business model Loyalty business models Collective business models Industrialization of services business model Servitization of products business model Low-cost carrier business model Online content business model Freemium business model Premium business model Direct sales model Value Added Reseller model Professional open-source model Various distribution business models See Introduction to Technology Mgmt - Student Material 20 (62)

21 Strategy and Technology What is strategy? the match an organization makes between its internal resources and skills and the opportunities and risks created by its external environment. Source: Hofer and Schendel (1978) Introduction to Technology Mgmt - Student Material 21 (62)

22 Strategy and Technology The two basic principles of Strategic Management of Technology are: 1. Focus on your Customers 2. Leverage your Core Competencies Introduction to Technology Mgmt - Student Material 22 (62)

23 Strategy and Technology Make or Buy? Introduction to Technology Mgmt - Student Material 23 (62)

24 Strategy and Technology Make or Buy? Technology/Knowledge Established Emerging RESEARCH BUY-IN DEVELOP OPTIMIZE AND/OR OUTSOURCE High Low Business Application Low High In-house Level of Knowledge Introduction to Technology Mgmt - Student Material 24 (62)

25 Strategy and Technology Adaptability Defining and executing a strategy is a must but unplanned things happen and adaptability is equally important Introduction to Technology Mgmt - Student Material 25 (62)

26 Strategy and Technology Adaptability: Core Competencies & Core Rigidities The development and use of competencies and resources are guided by the firm s dominant management logic Competencies become routines, which are difficult to change Core Competencies become Core Rigidities Companies miss out innovation opportunities So sometimes (only sometimes, but sometimes) it is right: Not to ask your customer and review the business landscape around Not to stick to your core competencies and learn again Introduction to Technology Mgmt - Student Material 26 (62)

27 Strategy and Technology R&D Long-term & Short-term (Ericsson Approach) Strategic and New Areas Business Decision Development Units Strategic Direction Ericsson Research Group Function R&D External Research Cooperations Universities Operators EU FP projects Focus Now 5 years 10 years Introduction to Technology Mgmt - Student Material 27 (62)

28 References Rogers, E. M. (1962, latest edition 2003). Diffusion of innovations (5th ed.). New York: Free Press. Moore, G. (1991, revised 1999) Crossing the Chasm: Marketing and Selling High-tech Products to Mainstream Customers. Collins Business Essentials Christensen, C. (1997).The Innovator s dilemma. Collins Business Essentials Chesbrough, H. (2003). Open Innovation:The new imperative for creating and profiting from Technology. Harvard Business School Press Davila, T. (2003). Making innovation work. Wharton School Publishing Adner, R (2005). Disruptive Technologies and the emergence of competition. RAND Journal of Economics, Vol. 36, No. 2, Summer 2005, pp Introduction to Technology Mgmt - Student Material 28 (62)