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Chapter 11

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Chapter 11

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  1. Chapter11 Strategic Issues in Managing Technology and Innovation PowerPoint Slides Anthony F. Chelte Western New England College Chapter 11 Wheelen/Hunger

  2. Strategic Issues in Managing Technology and Innovation Role of Management: • Innovation • Management of technology Chapter 11 Wheelen/Hunger

  3. Strategic Issues in Managing Technology and Innovation Role of Management: • Encourage new product development • 33 - 60 percent of new products fail to make a profit • Ensure that technology is being used most effectively with the consumer in mind. Chapter 11 Wheelen/Hunger

  4. Strategic Issues in Managing Technology and Innovation Environmental Scanning: • External Scanning: • New developments in technology Chapter 11 Wheelen/Hunger

  5. Strategic Issues in Managing Technology and Innovation Impact of Stakeholders on Innovation: • Lead Users • Lay the foundation • Determine the trends • Identify lead users • Develop the breakthrough Chapter 11 Wheelen/Hunger

  6. Strategic Issues in Managing Technology and Innovation Impact of Stakeholders (continued): • Market research • New product experimentation Chapter 11 Wheelen/Hunger

  7. Strategic Issues in Managing Technology and Innovation Internal Scanning: • Has the company developed the resources needed to try new ideas? • Do the managers allow experimentation with new products or services? • Does the corporation encourage risk taking and tolerate mistakes? • Are people more concerned with new ideas or with defending their turf? • Is it easy to form autonomous project teams? Chapter 11 Wheelen/Hunger

  8. Strategic Issues in Managing Technology and Innovation Resource Allocation Issues: • R&D Intensity • Spending on R&D as a percentage of sales revenue • Principle means of gaining market share Chapter 11 Wheelen/Hunger

  9. Strategic Issues in Managing Technology and Innovation Time to Market Issues: • Time from inception to profitability • Cycle is short — 4 years Chapter 11 Wheelen/Hunger

  10. Strategic Issues in Managing Technology and Innovation Strategy Formulation: • R&D Strategy: • Leader or follower in terms of technology and market entry • Source of technology • Develop • Purchase Chapter 11 Wheelen/Hunger

  11. Strategic Issues in Managing Technology and Innovation Product vs. Process R&D • Product innovations • Process innovations Chapter 11 Wheelen/Hunger

  12. Cash Flow Innovation Cycle Time Product Is (Mostly Released to Product Production R&D) Positive Net Cash Profit Opportunity Flow Period Occurs Time Negative Cash Flow Project Breakeven Becomes Project Time Extinct Activity First (Mostly Begins Customers Process Are Satisfied Product Opportunity R&D) Definition Is Perceived and Plans Freeze Product and Process R&D in Innovative Life Cycle Chapter 11 Wheelen/Hunger

  13. Strategic Issues in Managing Technology and Innovation Technology Sourcing: • Make or buy decision • Strategic alliances Chapter 11 Wheelen/Hunger

  14. Strategic Issues in Managing Technology and Innovation Outsourcing Technology: • Technology is of low significance to competitive advantage • Supplier has proprietary technology • Supplier’s technology better/cheaper—easy to integrate • Strategy not based on development and manufacturing • Technology development process requires special expertise • Technology development process requires new resources Chapter 11 Wheelen/Hunger

  15. Strategic Issues in Managing Technology and Innovation Technological Competence: • Absorptive capacity • A firm’s ability to value, assimilate, and utilize new external knowledge. Chapter 11 Wheelen/Hunger

  16. Strategic Issues in Managing Technology and Innovation Product Portfolio: • Product/market evolution matrix • Competitive positions • Stages of product/market evolution Chapter 11 Wheelen/Hunger

  17. Strategic Issues in Managing Technology and Innovation Chapter 11 Wheelen/Hunger

  18. Strategic Issues in Managing Technology and Innovation Innovative, Entrepreneurial Culture: • Positive attitude toward change • Decentralized decision making • Complexity • Informal structure • Interconnectedness • Organizational slack • Large size • System openness Chapter 11 Wheelen/Hunger

  19. Strategic Issues in Managing Technology and Innovation Stages of New Product Development • Idea generation • Concept evaluation • Preliminary design • Prototype build and test • Final design and pilot production • New business development Chapter 11 Wheelen/Hunger

  20. Strategic Issues in Managing Technology and Innovation Entrepreneurial Roles: • Product champion • Sponsor • Orchestrator Chapter 11 Wheelen/Hunger

  21. Strategic Issues in Managing Technology and Innovation Entrepreneurial Roles: • Product Champion • Generates new idea and supports it through many organizational obstacles. Chapter 11 Wheelen/Hunger

  22. Strategic Issues in Managing Technology and Innovation Entrepreneurial Roles: • Sponsor • One who recognizes the value of the idea, helps obtain funding, facilitates implementation. Chapter 11 Wheelen/Hunger

  23. Strategic Issues in Managing Technology and Innovation Entrepreneurial Roles: • Orchestrator • Top management who articulates the need for innovation, provides funding for innovating activities, creates incentives for middle management, protects idea/product champion from other executives. Chapter 11 Wheelen/Hunger

  24. Strategic Issues in Managing Technology and Innovation Corporate entrepreneurship: • “Intrapreneurship” • Internal innovation or venturing • Transformation of organizations • Strategic renewal Chapter 11 Wheelen/Hunger

  25. Strategic Issues in Managing Technology and Innovation Chapter 11 Wheelen/Hunger

  26. Strategic Issues in Managing Technology and Innovation 13 Best Practices for Improving R&D: • Strategies are well defined and clearly communicated • Core technologies are defined and communicated to R&D • Investment in developing multinational R&D capabilities • Funding for basic research with long-term focus Chapter 11 Wheelen/Hunger

  27. Strategic Issues in Managing Technology and Innovation 13 Best Practices for Improving R&D: • Centralized basic and applied research facilities • Formal, cross-functional teams • Mechanisms for regular interaction among scientists and R&D and other functions • Analytical tools used for selecting projects Chapter 11 Wheelen/Hunger

  28. Strategic Issues in Managing Technology and Innovation 13 Best Practices for Improving R&D: • Technology transfer to business units • Career development at all levels in R&D • Effective and diverse recruitment • Internal development and third-party relationships • Mechanisms are used for monitoring external technological developments Chapter 11 Wheelen/Hunger