Exploitation

Technology
Management
Activities and
Tools
 Contents

(1) Commercialization
(2) Technology transfer
(3) Utilization
 (1) Commercialization

Successful transfer of an invention / idea

to a sellable product in markets.

It might be at the firm or national level.

 How to organize
commercialization
activities?
 Types of
commercialization

• In-house commercialization
– production and distribution of
technology
• Selling technology
– idea, prototype
– patent (licensing)
• Joint commercialization
– joint ventures, alliances..
 Decision on
commercialization:
• Careful planning of the relationships
among: a company’s technologies, its
markets, and its development activities.
• Planing for the fullest market exploitation
of all its technologies to maximize the rate
of return on its technology investment.
• R&D --> commercialization
OR
Commercialization --> R&D
 External commercialization:
Why sell technologies?
• ever increasing costs and risks of R&D
• not fit into a company’s overall strategy
• limited patents protection
• competition fear
• financial and other problems preventing
market exploitation
• lack of production facilities all the world
markets for a given technology
• antitrust legislation
Prerequisites for the marketing of a technology:
 A strategy for a full portfolio of technologies.
 Decisions on acquisition or divestment of individual
technologies.
 Awareness of the value of developing technology.
 Clear understanding of the sale of a technology through
license and the sale of products based on that
technology.
 Recognition of difference between a technology buyer
and a technology seller.
• Reliance on technology marketers.
Discuss:
When should a company
commercialize a product,
and when should it sell the
idea?
Things to consider for executives
before selling:
• Internal factors:
– Competencies
– Corporate resources
• External factors:
– Industry characteristics
– Competitors
– Suppliers
– Customers
– Technology life cycle
Profiting from Technological
Innovation

• Why innovating firms often fail to obtain

significant economic returns from an
innovation, while customers, imitators,
and other industry participants benefit?

– EMI Computerized Axial Tomography

scanner example
– IBM PC example
 Profiting from Innovation (Source: Teece, 1986)

Who wins from innovation?

– the firm who is first to market,
– follower firms,
– firms that have related capabilities that the
innovator needs.
A model explaining who wins from innovation
suggests the following:
 Regimes of appropriability
 Dominant design
– Complementary assets
• When imitation is easy, markets don’t work
well, and the profits from innovation goes to
the owners of certain complementary assets
NOT to innovator.
• Solution for the innovating firm to establish a
prior position in the complementary assets.
• Innovating firms without the requisite
manufacturing and related capacities may
die.
 Channel Strategy
issues:
 Contractual modes
 Integration modes
 Mixed Modes
 Start here

1
2
Innovation requires access Yes No
Complementary assets Contract for access
to complementary assets for
specialized
commercial success

No Yes

Commercialize immediately 3 No
Appropriability regime weak Contract for access

Yes

4 No
Contract for access
Specialized asset critical

Yes

5 No
Contract for access
Cash position OK
Yes

6 Yes
No
Integrate Imitators/competitors better Contract for access
positioned
Source: Teece, 1986
Discuss:
Is marketing high tech
product different than any
other product’s
marketing?
(2) Technology transfer

• Technology transfer is the process by

which technology, knowledge, and
information developed by a creator is
applied and utilised by an applier
(Khalil, 2000).
Types of Technology Transfer

• TT from a company to a company

• TT from a non-profit organization to a
company
• TT from R&D to manufacturing
department
• TT from individual to department
• International TT
Stages of Technology Transfer

• Awareness
• Association
• Assimilation
• Application
 Modes of TT

• over-the-wall
• receivers as consultants (developers
have main responsibility)
• team mode: receivers as co-developers
• apprenticeship mode: receivers as
developers
What are the important
factors for success in
technology transfer?

Do success factors change

with the type of technology
transfer?
Primary factors in TT

• Technical understanding
 Feasibility
 Advanced development overlap
 Growth potential
 Existence of an advocate
 Advanced technology activities in a
development laboratory
 External pressures
 Joint programs
 Secondary factors in TT

• Timeliness
 Internal users
 Demand
 High-level involvement
 Individual corporate responsibility
 Proximity
 Barriers to transfers
• Lack of awareness
• Lack of funds
• Lack of common interest
• Conflict of interest
• Lack of trust
• Poor communications
• Lack of resources
• Lack of time
• Technical problems
• Organizational problems
International Technology
Transfer forms

• Reverse engineering
• Pirating
• Original equipment manufacture
• Turn-key plants
• Personnel transfer
• Licensing
• Acquisition
 Issues in Technology
Transfer

• Integration
• Utilization
• Organizational issues
• Deal & negotiations
• Commercialization
• Regulations
• Learning (absorptive, receiver capacity)
Elements in the diffusion of
innovations (Rogers, 1995)

• Innovation
• Communication
channels
• Time
• Social system
Innovation
• Technology has 2 components: hardware and
software
• Technology clusters
• Characteristics of innovations
Communication channels
• mass media channels, interpersonal channels.
Time
• innovation-decision process
• adopter categories
• rate of adoption
Social system
• norms and values
• opinion leaders and change agents
• Type of innovation decision and consequences of
innovations
 (3) Utilization

• Maintaining technologies
• Adjusting/ customizing technologies
• Improving technologies
• Integrating technologies for synergies
What are the factors influencing
the utilization of technologies in a
firm?

Is there a difference between

service and manufacturing firms?
 Technology utilization

• At the plant level

• At the national level / multi-plants
• At the international level
 Success of technology
utilization depends on
• Characteristics of the technology itself
• Factors in external environment of the
organization
– Demand changes
– Supplier and customer relations
• Factors within the organization
– Integration of technologies
– Linkage between hardware and software
– Bottlenecks and capacity limits
– Continuous improvement
– Available competencies
 Different technologies

• Specialized needs of one line of products

today would often drive improvements in
other lines tomorrow.
• Knowledge must be integrated and
applied.
• Partial investments/ installments.
• Different standards.
• Integrate, discipline, and standardize
manufacturing and process development.
 Supplier and customer relationships
Customers
Distribution Warehouses
Manufacturers Centers

Supply

Inventory &
warehousing
costs
Production/ Transportation
purchase Transportation Inventory & costs
costs costs warehousing
costs
 Buyer-Supplier Relationships

Confrontation Arm’s Length Acceptance of Full

Relationship Mutual Goals Partnership

Traditional Relationship New Relationship

Confrontation Cooperation
Suspicion Trust
Outsourcing Outpartnering

Source: Melnyk and Denzler, 1996)

Increasing new product concepts
via the lead user method

• Faster and cheaper than the traditional

methods
• Lead users display 2 characteristics:
– face needs that will be general in a
marketplace
– expect to benefit significantly by obtaining
a solution to those needs.
 4 steps in a lead user study:

 specifying the characteristics lead users will

have
 identify a sample of lead users
 bring the sample of lead users together with
company engineering and marketing
personnel to engage in group problem-
solving sessions.
• test whether concepts found valuable by lead
users also will be valued by the more typical
users in the target market.
 Managerial challenges

• Less standardized products & quasi-

continuous process
• Rethinking a considerable range of
managerial practices:
– Strategy
– Evaluating projects
– Managing change
– Implementation
– Labor force considerations
 PRODUCT VARIETY AND VOLUME
LOW MANY SEVERAL ONE PROD.
VOLUME- PRODUCTS PRODUCTS VERY
UNIQUE LOW VOL. HIGH VOL. HIGH VOL.

NO FLOW
PROJECT
process focus
IDENTIFIED PROCESS

JUMBLED
FLOW JOB SHOP
MIXED intermediate
BATCH
WITH
focus
DOM.
PATTERN

FLOWS
LINE ASSEMBLY
FLOW LINE
CONT. OR CONT.
AUTOMA- PROCESS
product focus
TED
Source: Hayes and Wheelwright, 1984
 Organizational needs:
• Technology management
• Organization techniques need to be
complementary to hardware technologies.
– JIT, cell manufacturing, etc.
• MRP, production planning, capacity
planning, layout
• Complementary competencies
• Perceived impact of technology
• Openness of personnel
• Structure (database, …)
• Human resources management
– Roles and responsibilities
– Incentives and rewards
– Organizational structure and chart should
be revised according to technologies
– Training
– Learning
 Main success factors

• Human resource development:

– Recruitment
– Evaluations and rewards
– Trust-based relationships
– Career patterns
– Good communication channels
 Some suggestions to
technology utilization
• Re-engineer
• Clarify your value chain goals
• Conduct a technology readiness audit
• Measure the performance of technologies
• Develop a business case to improve utilization
• Establish a technology coordination unit
• Begin technology integration
• Find ways of diversifying the use of
technologies and take actions
• Educate and motivate
 Selection

Acquisition

Exploitation
Identification

Business model Protection:

IPR portfolio

In-house
Learning production-distribution
Technology
Selling technology transfer

Joint
production-distribution product / service /
process / license /
knowledge
performance
Output
Marketing measurement:
utilization projects