Chapter-2

Business Strategy
Contents

2.1 Business Strategy Management

2.2 Technological Strategy Management

2.3 Business Industry

2.4 Chapter Quiz

Technological Strategy Management
Planning of Technological Strategy and Technology
Development Plan
• Developing new technologies and improving the existing technologies is considered to be the most important
matter for the management and continued existence of a company.

• However, in the current scenario when the environment surrounding the companies and the markets change
every second, it is necessary to perform research and development from a long-term standpoint and not just
stick to the temporary trends and consumer needs, so as to develop the technical skills of the company.

1. Technology development strategy and technology development plan

2. Production system
Technological strategy
• A Technological strategy refers to clearly specifying the areas where research and development needs to be
strengthened and the areas where research and development needs to be reduced, and deciding the
directionality of research and development in the company and the important areas of investment with the
purpose of securing a competitive edge in the market in future.

• When the technological strategy is decided, the cooperation between the management department and the
research and development department is indispensable.

• The management department contemplates the future of the company, while the research and development
department contemplates the future of technology, and both departments set up an interconnected policy.
Technological Development Strategy
• Once the areas where research and development needs to be strengthened have been decided according to the
technological strategy, a “Technology development strategy” is decided in order to deploy the technology.

• The technology development strategy is used to examine how to procure the necessary technologies.
Specifically, it is necessary to estimate the profit brought about by research and development, such as
deciding whether to perform in-house research and development of a technology or introduce it from outside,
and decide the extent of investment as well as the effect expected to be seen from that investment.

• In addition, a road map and a technology portfolio reflecting these decisions and predictions are prepared,
and specific technological development is promoted.

• Sometimes, a technology development strategy may rescue weakened corporate management.

Technological Development Strategy
• There is a need for a technology development strategy by which the value of a company improves through
investment in research and development, leading to an improvement in the motivation of employees.
MOT (Management of Technology)
• “MOT” refers to management performed for creating an economic value by ascertaining the possibilities of a
technology and linking them with business.

• In order to make important investment decisions for sustainable development of one’s company, it is
important to perform examination from the viewpoint of MOT, and improve the compatibility between the
business strategy and the technology development strategy.
Patent strategy
• It is a strategy for understanding the purpose of filing of patent applications and the methods of using patents
so as to acquire the patents that can contribute to the profit of the company.

Road map strategy

• A “Road map” of a company shows the decisions necessary for implementing the technological strategy, as
well as the changes and transition in predictions according to the time axis.
Technology portfolio
• A “Technology portfolio” refers to the combination of technologies that one’s company possesses.

Technology estimate method

• The “Technology estimate method” is a technique of predicting the phenomena that may occur in future, and
thus predicting the development and necessity of technology.
Production system

• A production process is designed in view of the characteristics of the product to be manufactured, as

well as requirements such as cost, quality, delivery schedule, etc.

• There is a need for the re-designing of a production system that can comply with each of the
requirements of high-mix low-volume production, production at a short deadline, reduction in
inventory, etc.

• The main production systems include the following:

1. Cell production system

2. Line production system

3. BTO (Built-to-Order)
Cell Production system
• This is a production system according to which one operator to a few
operators are responsible for all processes in the assembly
manufacturing process, from installation of components to assembly,
processing, and inspection.
• It derives its name from the fact that the components and tools are
arranged in the form of cells, and work is thus performed.
• This system is advantageous since it can flexibly comply with several
production types as the product to be assembled can be changed only by
changing the operator, component, or work order.
Line Production system
• This is a continuous and repetitive form of production
system in which a dedicated line, such as a belt conveyor, is
set up, and several operators assemble each component that
they are in charge of.
• This system has the advantage of being a highly productive
system since a specific product can be manufactured
repeatedly.
BTO (Built-to-Order)
• This is a production system according to which the production of a product is started after an
order from a customer is received.
• Since components are assembled and shipped in response to the customer order, it is possible
to reduce the risk of maintaining surplus inventory.
• This production system is adopted in several manufacturing and sales companies such as
those engaged in computers, automobiles, etc.
Process innovation and Product innovation
• “Process innovation” refers to innovation of business processes such as the development
process and manufacturing process from the aspect of production technology.
• In contrast, “Product innovation” refers to the innovation from the aspect of product
development such as the development of new products and new inventions.
Concurrent engineering
• Concurrent engineering refers to the participation of persons from the departments who are
concerned with the postprocessing stage of product development from the pre-processing stage
itself, so as to concurrently perform each process from design to production preparation, and
manufacturing.
• As a result, the production efficiency can be improved, which leads to shortening of the time
period of product development.
Q&A