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Technology and Competitiveness

Technology and Competitiveness. Chapter 3. Chapter Objectives. This chapter will identify: The influence of technology on competitiveness To find out about Porter's Generic Strategies The use of technology in strategic implementation The role of technology in the creation of wealth.

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Technology and Competitiveness

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  1. Technology and Competitiveness Chapter 3

  2. Chapter Objectives This chapter will identify: • The influence of technology on competitiveness • To find out about Porter's Generic Strategies • The use of technology in strategic implementation • The role of technology in the creation of wealth

  3. 1-Introduction • What are the mega trends that are increasing competitiveness? • If one of the implications is that firms have to compete on the basis of technology, what do they need to know to do so? How does technology enhance competitiveness? • To survive and grow firms must learn to compete on the basis of technology.

  4. 2-The influence of technology on competitiveness • Though a firm may have many strengths and weakness vis a vis its competitors, it attains competitive advantage either due to: • Cost advantage or • Differentiation • In a cost advantage strategy a firm tries to become the lower cost producer in the industry. However, its product must be seen as comparable to products of the quality and other expectations of the buyers.

  5. Porter's Generic Strategies

  6. In differentiation strategy, a firm tries to produce something that is unique with respect to certain dimensions that are widely valued by buyers. The firm may position itself to cater to some or all of those dimensions. For providing these valued attributes the firm will charge a premium. • Firms may adopt these strategies in specific segments of the industry and specialized in niches. • In implementing these strategies a firm should look at the influence of technology on the following: • Its value chain ; and • Its industry structure

  7. Uses of technology to implement business level strategy • Differentiate strategy • technology help a firm to add value to product and services. • case of ANZ Royal Bank uses technology to differentiate their services with competitor: • Provide client uses Internet access to act • ATM (24/7) • Online Transfer • Buy Cellcard through ATM

  8. Low cost strategy • technology help a firm to cut down cost of production or service process. • case of AirAsia Airline uses technology to cut down price of air ticket. • Sale Directly (Online Booking) • Bypass distributor (no commission added) • Paperless ticket • Reduce Overhead Cost (no building and sale agent)

  9. Group Discussion • Discussion # 1 • Do you know AirAsia Company? • Why AirAsia can offer a low price fly in among of Airline Industry? How they do it?

  10. Group Discussion • Discussion # 2 • Suppose you are a manager of tourism company. • If your company is a global firm (big) what strategy you will use to enter market? why? how to do it? • If your company is a local firm (small) what strategy you will use to enter market? why? how to do it?

  11. 3-The role of technology in the wealth creation • Technology – Creation of Wealth • Technological development – the most important source of economic growth • Capital – the 2nd most important source • Physical and human capital

  12. Long-wave Cycle • Discoveries in science create technological innovation. • e.g. Einstein (from Stimulated Emission of Light -> LASER) • Technological innovation creates new products. • New products create new markets and new industries. • New industries continue to innovate in products and processes, expanding market Create income and Job.

  13. 4-Conclusion • Achieving competitiveness through technology is the only way to attain sustained growth and profitability. • This requires a firm to develop its technology strategy very carefully based on a good understanding of how technology can influence its competitiveness advantage. • In implementing its technology – based competitive strategy the firm must understanding the following: • How its technology is embodied in the firm • How capable it is in utilizing and improving the embodied technology and • How it can get the technology it needs

  14. Group Discussion • How the following web site generate income • www.Cellcard.com.kh • www.Yahoo.com • www.google.com • www.Facebook.com • www.eBay.com • Reading and Answer the case study “Alliance and technology race”

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