Technology Strategy and
Innovation Dynamics
Technology Strategy and Innovation Dynamics
• Technology Life Cycles and S-Curves
• Product Life cycle and patterns of introduction, growth, maturity, and
• replacement.
• Technology Cycle: awareness, acquisition, adaptation, advancement,
• abandonment
• Technology Acquisition Strategies
• Source and type of Innovation (incremental vs. disruptive).
Innovation
• Way to Gain Competitive Advantage
• Innovation Endows Resources With a New Capacity to Create, or it
Creates a New Resource
• Innovation is the Result of the Implementation of New Ideas
• Innovation is the Way of Turning Ingenuity Into Realities
3
A disruptive innovation initially offers a lower
performance according to what the
mainstream market has historically demanded.
At the same time it provides some new
performance attributes, which in turn makes it
prosper in a different market.
As it improves along the traditional
performance parameters it eventually displaces
the former technology.
Innovation
• Innovation Can
• Cause Change
• Exploit Change
• Innovation Can Be
• Accidental
• Systematic
• Systematic Innovation That Exploits Change is Generally the Most
Effective
5
examples of disruptive innovation
Example 1: The transistor Radio
Traditional Performance: Worse sound
New Performance
Portable
Low Battery consumption
The Transistor Radio
As the sound
quality improved,
it eventually
displaced the
analogue, big
furniture radios.
Pocket Calculator
Pocket calculator Desktop calculator
Traditional Worse computing performance
performance
New Portable
performance
Pocket calculators
Over time, the computing
performance of these smaller,
simpler calculators was
improved.
As they became cheaper and were sold in larger and larger
volumes, sales offices lost their value. Calculators started to
be sold in bookstores and large retail stores.
Example 3: LCD TV
When the image quality had
become good enough,
they displaced CRT TVs in the
2000s
LCD TV versus Cathod Ray Tube (CRT) TV
LCD TV CRT TV
Traditional Worse image quality
performance
New Low battery consumption
performance Low weight
LCD screens initially prospered in various
applications where image quality wasn’t important.
Example 4: Mobile Phone
In mobile phones, portable video games and cameras,
battery consumption and weight were more important.
Cell phone Old phones
Traditional Worse sound quality
performance Expensive
New Portable
performance
As mobile phones became cheaper, the
sound quality improved and new functions
were added, it eventually displaced
the analogue phones.
WHAT IS AN INNOVATION?
vIt is an idea, practice or object that is perceived as new by an
individual or other unit of adoption.
vIt is a use of new knowledge to offer a new product or service
that customers want. Thus, it is
Invention + Commercialization.
“Innovation is the search for and the discovery, developed,
improvement, adoption and commercialization of new
processes, new products and new organization structures
and procedures.”
CHARACTERISTICS OF INNOVATION
vThere is an object or target which is being changed.
vIt can be a product, a process, an individual’s lifestyle, an
organization's strategy, a society culture.
vInnovation vary in extent or magnitude i.e. degree to which
one deviates from the past.
vIt is closely related to problem solving since generation &
implementation of ideas for change never transpire
without difficulty.
vA final characteristic is the impact of the change, the
significance or range of its effects.
Invention
Scientific
Innovation
Discovery
Market
.
Difference between Innovation & Invention
Invention Innovation
1. It’s creation of new product, service 1. It is the introduction of new product,
or process. service or process into the
marketplace.
2. May not be commercialized 2. Results into commercialization
3. It can be autonomous or induced 3. Usually induced
4. Can be for economic or non- 4. Economic motive
economic motive
5. Usually restricted to R&D centre 5.Spread across the organization
6. May bring few changes in 6. Brings organizational change
organization
7. Precedes innovation 7.Succeeds invention
WHY INNOVATE ???
TURBULENT AND
RAPIDLY CHANGING
ECONOMY
ORGANIZATION
PREPARE
THEMSELVES TO
INNOVATE ON A
OTHERWISE THEIR
CONTINUING BASIS
SURVIVAL CHANCES
ARE SERIOUSLY
THREATENED
GOALS OF INNOVATION
• Improving quality
• Creation of new markets
• Extension of the product range
• Reducing labor cost
• Improving production process
• Reducing materials
• Reducing environmental damage
• Replacement of products/services
• Reducing energy consumption
• Conformance to regulations
SOURCES OF INNOVATION
Ø Organizational Structure.
- Organic structures positively influence innovation. As there is lower
vertical differentiation, formalization, centralization. Organic organizations
facilitate the flexibility, adaptation & cross-fertilization.
Ø Long tenure in Management
- Managerial tenure apparently provides legitimacy & knowledge of how to
accomplish a task and obtain desired outcomes.
Ø Slack Resources
- Having an abundance of resources allows an organization to afford to
purchase innovations, bear the cost of instituting innovations & absorb
failures.
Ø Interunit Communications
- Innovative organizations are high users of committees, task forces, cross-
functional teams that facilitate interaction across departmental lines.
TYPES OF INNOVATION
§ Product & Process Innovation
§ Open & Closed Innovation
§ Incremental & Radical Innovation
§ Modular and Architectural Innovation
Open & Closed Innovation
PROJECT CONCEPT MARKET
START FROZEN INTRODUCTION
Concept
Implementation
Development
Closed Model For Innovation
PROJECT CONCEPT
START FROZEN
MARKET
Concept
INTRODUCTION
Development
Implementation
Open Model For Innovation
Class of Innovation
Breakthrough
Distinctive
Incremental
26 Glocal Vantage, Inc.
INCREMENTAL INNOVATION
Improving Inherent
Processes/Inputs to achieve
Higher Output
Incremental
Breakthrough Incremental
Productivity
Distinctive
Incremental
Distinctive
Time
Incremental
28 Glocal Vantage, Inc.
Types of Innovation
• Nature
• Product
• Process
• Procedure
• Class
• Breakthrough
• Distinctive
• Incremental
29 Glocal Vantage, Inc.
Innovation Map
t al gh
en t i ve ro u
rem in
c
kth
c ist e a
In D Br
Product
Process
Procedure
30 Glocal Vantage, Inc.
RADICAL INNOVATION
Displacing Existing Technology
Revolutionary (Disruptive, Evolutionary (Incremental)
Radical) Innovation Innovation
Major product/process Incremental product/process
breakthrough improvement.
Maintain competitive position
Create or exchange an industry
within an industry
Typically, originate outside of the Typically, originate within the firms
firms in an industry in an industry
Relatively rare Relatively common
Generated by and create
Improve operations of established
opportunities for small
firms
entrepreneurial firms to enter an
industry.
Observations
• It’s the Pattern of Innovation
• Matches Customer Needs
• Provides Competitive Differentiation
• Is Organization Dependent
• Changes Over Time
• Can Anticipate and Delight
• Ultimately Driven by the Culture
• Must Involve Everyone
33 Glocal Vantage, Inc.
Innovation Development
• Identify a Market
• Discover the Innovation Opportunities and Threats in the Market
• Understand the Innovation Desires of the Stakeholders
• Assess the Innovation Capability and Capacity of the Organization
34 Glocal Vantage, Inc.
Innovation Development (cont.)
• Create an Innovation Strategy
• Align the Innovation Focus of the Organization Through the
Strategy to the Future Market (customers, competition &
technology)
• Develop the Organization to Effectively and Efficiently Implement
the Strategy
• Utilize a Common Language of Innovation Throughout
• Involve Everyone
35 Glocal Vantage, Inc.
Architectural
Innovation
Change in
Product Structure
Modular
Innovation
Steam Engine Fuel Engine
of Car Change in of Car
Component
Technology
INNOVATION PROCESS
vRecognizing or scanning the environment.
vAligning the overall business strategy & proposed
innovation.
vAcquiring technology from outside.
vGenerating technology in-house.
vExploring & selecting the most suitable response to the
environment.
vExecuting & implementing innovation.
vLearning lessons for improvement.
vDeveloping the organization.
INNOVATION OCCURS AT
THREE LEVELS
GOVT. POLICIES &
NATIONAL LEVEL SUPPORT
ENTERPRISE
ENTERPRISE LEVEL POLICIES, SUPPORT
& INITIATIVES
INDIVIDUAL &
INDIVIDUAL LEVEL GROUP INNOVATION
ACTIVITIES
The World's Most Innovative Companies : 2018 Rankings
12-Month Sales
Rank Company Country Innovation Premium*
Growth
#1 ServiceNow United States 39.02% 89.22%
#2 Workday United States 36.07% 82.84%
#3 Salesforce.com United States 24.88% 82.27%
#4 Tesla United States 67.98% 78.27%
#5 Amazon.com United States 30.8% 77.4%
#6 Netflix United States 32.41% 71.23%
#7 Incyte United States 38.93% 70.59%
#8 Hindustan Unilever India 11.49% 67.2%
#9 Naver South Korea 19.36% 64.62%
#10 Facebook United States 47.09% 64.42%
Source : https://www.forbes.com/innovative-
companies/list/#tab:rank
Knowledge push
• Knowledge push
• Innovation that came out from scientific research
• R & D processes
• E.g: Intel chips
• Antibiotics
• CDs
42
Need pull
• Need Pull
• “Necessity is the mother of invention”
• Particularly important at mature stages in industry/product life cycles
• Eg: Energy saving cars
43
Product B
BUSINESS
Product A
TECHNOLOGY DYNAMICS
Innovation
Technology PUSH Market PULL
§ Unknown value § Existing business
§ Business evolves § Instant value
perspective
§ Takes time
§ Lower perceived risk
New
Markets The
Entrepreneurial
Zone
Emerging &
Adjacent
Markets
Existing
The
Markets “CORE”
Company New
Technology Technology
Technology Extensions
PowerZone Opportunities
Shocks to the system
• Whose needs?
• Existing customers
• New & potential customers eg: small entrepreneurs who want to
save costs
• Emerging markets
• “Bottom of the pyramid”-80% under the poverty line
• Eg: Poverty in Arica-created demand for cheap food in low prices
46
Advertising and mass customization
• Challenge in markets-buyers want variety and
customization at the same time
• Eg: Rising individuality has opened up new market for
customized products
47
Users as innovators
• Create innovative solutions on a continuing
basis
• Eg: Tech-hobbyists keep on providing ideas on
technological innovations-new models for pc,
phones
48
Extreme Users
“Tough customers mean good designs”
• The users in the toughest environments may have
needs which by definition are at edge
• E.g: Military needs inspire more innovations within the
security industry
49
Watching Others
• Concept of benchmarking
• Eg: Korea manufacturing field that came from
the concept of “copy and develop”
50
Combination & recombination
‘Crossover’
• Combination of industries
• Eg: Nike fashionable shock-absorbing shoes-
combination of arts, health and fitness industry
51
Regulation
• Restrict certain things and opens up new ones
• Eg: New tax rules on cigarettes- restricts sales of
cigarettes, opens up new market of ‘fake cigarettes’ and
aids to quit smoking
52
Futures and forecasting
• Exploring alternatives
• E.g.; Exxon and Shell exploring possibilities for
alternatives for oil and gas
53
Accidents
• Mistakes that turned out to be important inventions
54
• No ‘inertia’
• Modular
• No ‘limits’ ?
• Fast experimentation
• Few principles and
laws
• Function of components/
• Clear principles/laws processes
• Predictive
• Quantitative
Technology Space • Systems complexity
• Trends; not ‘laws’
• Definitive • Slow, ambiguous
experimentation experimentation
?
leading
Technology Space
Map™: Mapping your Position strong
company’s technology
capable
strengths
Choose One
Your Company’s
Technology
PowerZoneTM
leading
Where is your Position strong
future
competition? capable
Choose One
Your Company’s
Technology
? PowerZoneTM
leading
Where is your Position strong
future
opportunities? capable
Choose One
Your Company’s
Technology
PowerZoneTM
CONCEPT DEFINITION
•Conceptual definition
TECHNICAL ANALYSIS
of product or service Resources required
•Setting technical goals Resources available
IDEA GENERATION and priorities
•Recognizion of need Time frame for
•Setting expected development
•Alternative ways to performance
meet the need
•Analysis of alternative
solutions
•Selection of best Approval by
solution and criteria top management
for selection
•Proposal for •MARKET ANALYSIS
implementation •Defining the market
BUSINESS PLAN
•Analysis of current and •SWOT
future needs •Economic Analysis
•Know the customers
•Capital
•Know the competitiors •Strategic outlook
•Window of opportunity
FULL PRODUCTION AND TEST MKT
COMMERCIALIZATION •Strategy for market DEVELOPMENT
•Production introduction •Prototype
DISPOSAL
•Environmental •Tooling •Marketing innovations •Testing
consciousness •Operation control •Timing •Start up needs
•Supply organization •Measuring response
•Logistics
Technology Progress
Economic Growth
Improved Healthcare
Increasing Mobility
Environmental Decline
Increasing De-Culturization
“We humans do not have to accept our fate passively. We can act to create a
different future for ourselves- to avert specific problems or create new
benefits that are not now on the horizon. Scenarios help us to understand
our options for the future.”
Quantitative Advanced
Techniques
Trend Analysis
Roadmapping
Scanning
Expert Judgment
Qualitative
Present Mid-range Long term
Static Dynamic
Developing New Products And Services
• When one considers a variety of different industries, a decline in product
innovations is matched only by a decline in market share. The importance of
innovation and how the effective management of that process can lead to
corporate success.
• To many people, new products are the outputs of the innovation process,
where the new product development (NPD) process is a sub-process of
innovation.
• Managing innovation concerns the conditions that have to be in place to
ensure that the organisation as a whole is given the opportunity to develop
new products.
• The actual development of new products is the process of transforming
business opportunities into tangible products
Dynamic competences enable innovation
• Every firm has a baseline set of routines that enable it to serve the purpose of
producing and marketing the given products and services currently in the
portfolio.
• Some firms have dynamic capabilities that relate to the innovation of
products and services, to the innovation of the production process, or to the
search and attraction of new customer segments. This enables many firms to
adapt and evolve.
• There is, then, a further level of capabilities, so-called dynamic capabilities
that relate to the
• innovation of the way innovation is pursued. These are highly creative
‘reconfigurations’ of thinking and methods for innovating.
• Examples would include: Dyson’s development of the bagless vacuum
cleaner, Pfizer’s Viagra or Tesla’s electric sports car.
INNOVATION MANAGEMENT
vInnovation management is all about
- learning to find the most appropriate solution
- to the problem of consistently managing
aforestated process
- doing so in the ways best suited to the particular
circumstances in which the organization finds itself.
vIt is the search of effective routines.
vIt is about managing the learning process to deal
with the challenge of the innovation process.
Innovation Management
“Innovation management” thus refers to handling of all the
activities needed to “Introduce something new”, which
in practice means things like coming up with ideas,
developing, prioritizing and implementing them, as well as
putting them into practice.
Innovation management initiatives focus on
disruptive or step changes that transform the
business in some significant way.
Innovation Management
Management of Innovation comprises three
things:
- linking of engineering,
- science &
- management disciplines
Ø to plan, develop & implement technological
capabilities to shape & accomplish the strategic &
operational objectives of an organization.
Need/Objectives of Innovation Management
vTo reap in the economic benefits of new technological
inventions by commercializing them on time
vTo integrate technology into overall strategic objective of
the organization.
vTo get into and out of the technologies faster and more
efficiently.
vTo accomplish technology transfer.
vTo reduce new product development time.
vTo manage large ,complex & interdisciplinary projects and
systems.
CHALLENGES FACED WHILE
MANAGING INNOVATION
1. Why Change?
- Only innovation matters.
2. What to Change?
- Ranging from changes in product & service to the ways(i.e.
process innovation).
3. Understanding Innovation.
- Understanding common problems associated with partial
views of innovation.
4. Building an Innovation Culture.
- Managing Innovation is all about creating firm specific
routines(i.e. repeated, reinforced patterns of behavior)
which define its particular approach to the problem.
CONTD……….
5. Continuous Learning
- Firms constantly needs to develop their routines to deal
with the environmental challenges.
6. High Involvement Innovation
- Higher level of participations in innovation represents
a competitive advantage.
7. Managing Connections
- In current scenario business organizations are required to
operate in relationship with others rather than in splendid
isolation.
What are barriers to innovation?
BARRIERS TO INNOVATION
v External Barriers
- Market-Related Barrier
- Government & its Policies
- Others (Technical, Societal, & Inter Organizational Barriers)
vInternal Barriers
- People Related
- Structural
- Strategy Related
LEARNING TO MANAGE INNOVATION
HOW TO OVERCOME THESE BARRIERS
SHARED VISION, • Clearly articulated & shared
LEADERSHIP & sense of purpose
THE WILL TO • Stretching strategic intent
INNOVATE. • Top management
commitment.
• Encouraging creativity
• Enabling learning &
APPROPRIATE
interaction
CULTURE
• Balancing between ‘organic
& mechanistic’
CONTD.
• Promoters, champions &
KEY INDIVIDUALS other roles which facilitate
innovation
• Use of teams at cross-
functional & inter-
EFFECTIVE TEAM
organizational level
WORKING
• Investment in team
selection & building
CONTINUING & • Education & training of
STRETCHING employees to ensure high
INDIVIDUAL level of skills &
DEVELOPMENT competence
EXTENSIVE • Within & between the
COMMUNICATION organization and outside
• Positive approach to
CREATIVE CLIMATE creative ideas,
supported by relevant
motivation systems
• High level of involvement
within & outside the firm
LEARNING in proactive
ORGANISATION experimentation
• Knowledge capture &
dissemination
innovative enterprises
Enterprises should emphasize
Planning & Respect for Tolerance for
Controlling Individual mistakes
Systems Initiative And
With high And Allowing
degree of Personal Room for
Flexibility Growth Failure
