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    10 views40 pages

    S Curves

    Uploaded by

    Marija Ilievska

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    DESIGN AND IMPLEMENTATION OF TECHNOLOGY STRATEGY: AN EVOLUTIONARY PERSPECTIVE [EXHIBIT 1_ A Capabittes-Based Organizational 19 Framework of Technology Stratony oo poten 1. Which istincive technological competences ani apabites arw necessary 10 establish and maintain ‘competitive advantage? 2, Which technologies should be used to implement cote product design concepts and Row should hese technologies be embodied in products? 3, What shonld be the investment lovel in technology development? 4, How should variogs technologies be sourced — inteoaly or externally? ‘5. When and how should new tet tothe marker? {6 How should technology and innovation be organized nd managed? ‘Technology strategy encompasses but extends beyond RAD siategy (Mitchell, 1986; Adler, 1989). Suatery making concerning rechoology can be conceptualized as ‘an evolutionary organizational learing press. This shown in Exhibit | ogy be introduced Exhibit shows the inkages among technical competen- ces and capabilities, technology strategy, and experince ‘Technology strategy i function ofthe quantity and val ity of tecnica capabilities and competences. Experience ‘htsined rom enacting technology suaeay feeds back to technial capabilities and technology stateny ‘We will now examine the thee intrrelted elements ‘of technology strategy making. First, we will examine technological competencies and capabilities. Next, we will discuss the substance of technology strategy: the {heretic dimensions in which technology strategy can be expressed. Then, we'll review te internal and exter al forces that shape the evolution of arms technology strategy, Finally, wel discuss experience through the fenatmeat of technology stony the various key tasks through which the firm's technology stratepy is aeually implemented and experience accumulated ‘TECHNOLOGICAL COMPETENCE AND CAPABILITY ‘Over time orgunizations develop distinctive competences that ae closely associated with der ability to cope with environmental demands (Selznick, 1957). McKelvey fn Aldrich (1983) view distinctive competence a5 “the ‘combined workplace (echnologcal and organizational Knowledge and skills. hat together are most sent im determining the abit ofan organization to survive” (p- 112). Nelson and Winer (1982), in similar vin, use the concept of “outins.” which they consider to play a role similar to genes in biological evolution. Ii impor fant to note that research has revealed that distinctive ‘competences can become a competence tap (Levit and ‘Mareh, 1988) of core rigidity (Leonard-Barton, 1992), Other research has found that there are strong inertial forces assisted with distinctive technological compe tenoes, but that strong technological competences are tx ikely to generate sanovations (Burgelman, 1994) Th general a firm's distinctive competence involves the aliferentisied skills, complementary assets, ani routines used to create sustainable competitive advan- tage (Selonick, 1957; Androws, 1981; Teeee, Pisano and Shuen, 1990). Prahalad and Fame! (1990), build ing on the work of Selaick and Andrews, define core competencies "the collective leagning in the organ cation, especially how to coordinate diverse production ‘ills and integrate multiple streams of technologies’ {p82} these authors also provide criteria fr idemifying 2 firm's core competence (pp. 3-84}: A core compe tence shoul (1) provide potential access toa wide var ‘ty of markets, (2) make significant contribution wo the perceived customer heneis of the end product, and (3) be ifcul for competitors to imitate Here we ae primarily concerned with the subset of technological competences ofthe firm, but the ineme= Intionshipe with competences in other Key ares, such marketing are always to be considered as wel, ‘Stalk, Evans, and Shulman (1992) distinguish coe competence from fm’ sategic capabiis: "wheres ‘core competence eniphasizes technological ae productioa expertie at specific points along the value chain, capabl ‘ies are more broadly based encompassing thee ale ht (p66). They define a capabiliy 3 "ast of bas ‘ess processes sraogialy understood... The key i ‘comet them to eal customer need" (p62). Thus, tc okgicl competences and capabilites re complement) ‘concepts, ad vale chain analysis (@, Porter, 1985) po: ‘ies useful too for examining her inteelationips PART WO: DESI AND IMPLEMENTATION OF TECHNOLOGY STRATEGY: AN EVOUUTIONARY FEREPECTVE. 239 SUBSTANCE OF TECHNOLOGY STRATEGY ‘Technology stategy canbe discussed in terms of (1) the deployment of technology inthe firm's prodct-market staegy to postion itself in orm of differentiation (per ered value or quality) and delivered cost and to gain technology-based competitive advantage; (2) the use of| technology, more broadly, inthe varius atvities com ited by the ims value chain; (3) the firm's resource foraitent to various areas of technology and (4) the fis use of organization design and management ech rigoes to manage the technology function, Thee onst- tute four substantive dimensions of technology sratesy (Gurgelman and Rosenbloom, 1989: Hampson, 1993) ‘comapatitive Strategy Stance ‘Technology strategy i an instrument of more compre densve busines and cowporate strategies, AS part of these broader strategies, businoss defines the role that technology should playin increasing the dtfereniation andioe reducing the costs ofits products and services (Pontes, 1983, 1985) From a compete strategy point of view, technology can be wed defensively t stain achieved advantage in product differentiation or cost of “offensively as an instrament to create now advantage in established lines of business orto develop new procs td arte, Technology Choice Recent work on the distinction between design concepts and thee physical implemen tation (Cia, 1985) and on the distinction between Components and architecture in product design and ‘evelopment (Clank, 1987; Henderson and Clank, 1990) is useful to establish» framework for technology choice, ‘enderson and Clark (1990 offerte example of room fon, which is a system for moving air ina room. The "major components ofa oom fan ince the bade, the ‘motor that drives i the blade guar, the contol sytem, ‘andthe mechanical housing. A components defined as ‘uphyscally distinct portion ofthe product that embod- ies a core design concept and performs a well-defined function” (p. 2). Core design eoncepss correspond to the Various fonctions that the product design needs 10 embody so thatthe manufactured proddet will be able ‘o sve the purposes ofits user. For instance, the need forthe fan to move eorespands toa core design concept (Coe design concepts can be implemented in various ‘ays fo become components Fo instance, movement of the fan could be achieved through using manual power ‘or electrical motors. Bach ofthese implementations, in tor, refers to an underying technological knowledge base, For instance, designing and building electrical ‘motors requires knowledge of electical and mechanical engineering. Each of the core concepts ofa product ths centl technology choices. proct also fa in ad tion to components, an ahitectre tht determines how its components ft and work together, For instance, the ‘oom fan's overall architecture lays out how its various ‘components will work together, Product achiectres usualy become stale with he emergence of “dominant ‘design’ (Alsernaty and Uaerbak, 1978) in dhe industry. Product architecture also affect technology choice ‘Teetnology choices require careful assessments of technical as wel 5 marke factors and identify an array ‘of targets for technology development. Te ative ie versity of investments in technology mals teh nology choice and targets for technology development an especially salient dimension of technology stetegy ‘Targeted technology development may ange Irom mine mpeevements ina mature process tothe employment of ‘an cmerging technology in the firs new prot na new market (Rosenbloom, 1983), ‘Technology Leadership Tho implications of techno logical leadership have heen explored in earlier writings om technology and uatyy (et. Anson and Stewart, 1967; Maidiqe and Path, 1978). Discussions of techno Togical leadership ae ofton in terms the timing (relative to vals) of commercial usc of new technology — thas, in terms of product-markt strategy. A broader strategic ‘definition views technological leadership in terms of relative advantage in the command ofa body of techno logical competencies and capabilites. This sortof leader Ship results from contmitment to “pioneering” role in the development of a technology (Rosenbloom and ‘Cusumano, 1987), a8 opposed o a mace passive “moni toring” role Technological leaders thus Mave the capac ity to be frst movers but may elect not odo 0, A firm's competitive advantage is more likely t arise fiom the unique aspect of its technology strategy than from characteristics it shares with others. Companies that ae succesful over long periods of time develop technological competences and capabilites that are lisinet from those oftheir competitor and not easily replicable. Crown Cork and Seal, Marks and Spencer, and Bane One are examples we'll ety discuss. Canon (Praia and Hamel, 1990) and Wak Mart (Stalk ea, 1982) ate other examples. The capabilities base sta egies of such companies cannot easily be classified 240. rant Two. OeS1ON AN MIPENENTATION OF TECHRIDLOGY STRATEGY: AN EVOLUTNAY PERSPECTIVE simply in txms of differentiation or cost adership they combine both, The ability to mainsin unigue- ness tht slit inthe maketplace implies contina- ‘us alertness to wha competitors are doing and should pot be confused with insulation and an inward Jookng ‘orientation, "The competences and capabilities-based view of technological leadership draws attention t the mpor- tance of accumulation of capabilities (Barney, 1986; Iam, 1987). Technological leadership cannot be bought csi in the mrt or quikly plugged into an organiza tion A firm rst understand he statezic importance of Aferent competencies and capabilites and be willing build them patently andl persistently, eventhough it may sometimes teem cheaper or more efiient inthe shor fern to rely on outsiders for their procurement “Thinking sateically abou technology means ris- ing the question of how & particular technical eompe- tence or eapability may affect firm's fro degres of freedom ais contol over its ate This involves den fying and tracking key technical parameter, considering the impict on speed and flexibility of product and pro- ‘cess developmentas technologies move through therlife Cycles, also requires diatingnishing caeflly between the technologies that are common to all payers inthe indatry and have Title impact on competitive advan- fage and those that are proprietary and likely to have & Imjoe impact on competitive advantage. Furthermore ‘trepires paying stention 1 the new technologies that axe begining o manifest ter potential for competitive tuvantage and thos that are as yet only beginning to ‘merge (Anthae D. Lite, 1981). ‘Technology Entry Timing The timing of bringing technology to market, of course, remains a key sire tegic issue, Porter (1985) identies conditions under whic pionering is likely to be rewarded in tems of lasting fs-meover advantages. While noting the various potential advantages acruing o fst movers, Porter also ‘Mentfes the disadvantages that may ensue, highlighting the significance of managerial choice of timing and the portance of sitvational analysis to determine the likely ‘consequences along te path chosen. "Tee (1986) extonds the analysis by Wentfying the importance of appropriability regimes and contol of specialized ass. Approprablity regimes eoncera the fist movers ability to protect proprietary technologieal vantage. This usally depends on patens,propieary ‘know-how, andor trae secrets. The legal bate between Je and Advanced Micro Devices about access to ntel’s microcode for microprocessor development san exam pl ofthe importance of appropriablty regimes (Steere land Burgelman, 1994), An important consideration here isthe cost of defending one's proprietary technological position, For instance, the prospect of rapidly esala- {ing legal core andor claims on scarce top management time may sometimes make it difficult fr smaller fms to Exton for tn canis (competencies eapabitie), Com ‘id not have an R&D deparunen, but it developed sont links between a highly competent technical sles fore and ah applications oriented engineering group (0 Pe ble to provide complete technical solutions fr eas fs? fling needs" (competences capabilities). 10 face ofa miaor external technological innovation two-piece can—intsted by an aluminum compat echnology evolution), Crown was able to mobilize i ‘own eapabiites and those of its ste! suppliers quit aR TW: OES ANDINA MENTATION OF TECHNOLOGY STATEQY: AN EVOLLMONARY PERSPECTIVE. 245 to adap the innovation for use with tel, Ove several theculzs, CC&S continued to stick to what could do best (sratesic action)—manufactring snd selling real cans—drivea by strong customer-orentd cul tue (organizational comet) while is competitors were ‘recting their atention to diversification and raally Jost terest inthe metal can indastry (industry context). ‘CCAS has continued to refine the skill et (experience) that made i tbe only remaining independent metal ean company ofthe four exginal major payers. ‘A socond clasical ease concerns the success of Marks and Spencer (M&S), a British retailer witha worldwide reputation for quality, which vas based on consisten ‘ntegy founded on an unswerving commitment tog” ing the customer “good vale for money.” The genesis of is technology strategy was the transformation, in 1936, ffs tetile-esting department into a “Merchandise Development Department” designed to work closely wrth vendors to bring about improvements in quality ‘Tie years later, its technical staff, then numbering more than 200 persons working on foo technology as ella textiles and home goods, allowed M&S to contol the cost structure ofits suppliers. The development ofthe technical capabity set was driven by the strong value of exellent supplier reatonships held and continously ‘einoeed hy top maagement ‘A tid classical ease concotns Banc One Coxporation .Midyest banking group that consistently ranked among. the mos¢proitable U.S. banking operations bythe time it ‘es sired by JP Morgan Chase Co in 2004, In 1958, the now CBO of Cty National Bank of Columbus, Ohio (CNB), John G. McCoy, persuaded his board to invest 3 Fercen of pets each year to support a "veserch and evelopment” activity. Over the next two decades, CNB, which became the lead bank of Bane One Corporation, developed capabilities that made i @ national leader in the application of electronic information processing ‘echaologes to retail Banking I as the fs bank to ‘axl automatic teller machines and a pioneer in the evelopment of bank credit ands, point-of-sale tansae- tion processing, and home banking, While not al ofits innovative ventures succeeded, each contributed the éunulative development of 2 deep and powerful tckni-

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