Ch 12 Deployment of Technology in The Value Chain

1. Ch 12Deployment of Technology in The Value Chain http://jaryono.blog.unsoed.ac.id E-mail: jaryono@gmail.com

2. Principle of Technology Deployment in The Value Chain (Guided by environmental and firm-related factor) • Where in the Value Chain are the opportunities for deployment of technology? • Which technologies are available? • What are the reasons for deploying technology? • Do we have adequate resources to do so?

3. Strategic Context [Should we deploy technologies?] Technology Context Industry Context Technology Choice [Do we have appropiate technologies to deploy?] [Where in the value chain do we deploy technologies?] Resources and Capabilities [Can we deploy appropriate technologies?] DRIVERS OF TECHNOLOGY STRATEGY IN THE VALUE CHAIN

4. Environmentan Context • The industry and technology factors constitute the environmental context in which technologies to be deployed in the value chain are chosen. These factors are not necessarily coupled: Technology environment may evolve independently of the industry, and vice versa. • Thus, technolgy intelligence––outputs of the analysis of technology environment—and the analysis of competitive domains should inform these decisions.

5. Technology Context • The technology context determines the availability of the technologies that are appropriate for a firm to deploy in its value chain. • These may be technologies that are available in-house or technologies that can be acquired from outside.

6. Product-Market Scope and Value Chain Configuration

7. Compete Domains • On the ohter hand, the characteristics of competitive domains determine where in the value chain the firm should deploy its technologies so as to support its corporate strategy. • They dictate the deployment of specific technologies and offer opportunities for changing the nature of rivalry.

8. Value Chain Focus and Evolution of Competitive Domains

9. Firm Related Factors • A firm’s strategic context and its resources and capabilities represenbt the managerial dimension in the technology deployment in the value chain. These vacrors are interrelated: • On the on hand, the strategies a firm pursues are dependent on its resources and capabilities; on the other hand, the strategies it pursues may, in turn, enable it to build its resources and capabilities. • Thus, technology choices in the value chain may reflect both attempts to build resources and capabilites and deployment of existing value chain elements to furtheer business strategies.

10. Firms need the emphasize four unique principles in their deployment of thecnologies in value chain: • The thrust of technology deployment should be based on a firm’s business strategy; • During the implementation of business strategy, broad objectives need to be broken down into very specific, clearly articulated objectives; • Technology deployment in the value chain requires inter-functional integration; • Finally, new product introductions require changes in the value chain configuration as the new product moves from the dewign to the commercialization phase.

11. Business Strategy • The business strategy—low cost versus differentiation—pursued by a firm has an important influence on the scope and timing of technologies to be deployed in the value chain.

12. Strategic Context and Technology Choice

13. Business Strategy • In recent years, competitive benchmarking has become increasingly common as a tool by which companies try to achieve their value chain objectives. • Competitive benchmarking involve analyzing the performance and practicces of the best-in-class companies. • Their performance becomes a benchmark to which a firm can compare its won performance, and their practices are used to improve the focal firm’s own practices.

14. Specific Objectives • To be implementable, the objective behind technology deployment in the value chain needs to be operationalized in concrete and specific terms. • Broadly speaking, one can identify four specific objectives that can lead to a low cost or differentiation strategy: • superior efficiency; • superior quality; • superior customer responsiveness; or • superior innovation.

15. Strategic Context and Value Chain Objectives Efficiency Quality Innovation Customer Responsiveness Low Cost Differentiation

16. Inter-Functional Integration • The specific goals—efficiency, quality, innovation, and customer responsiveness—require technology strategies that embrace several distinct value chain activities. • In other words, these goals need to be regarded as cross-fuctional goals that cut accross different value activities within the company and require substantial cross-functional integration.

17. Product-Value Chain Linkage

18. Decision Criteria Four major criteria should drive the decision to deploy a specific technology in the value chain activities of a firm: • To what extent dowes it accomplish the objectives? • To what extent do we have the resources to deploy the technology? • Cost-benefit analysis: Do the benefits outweigh the cost? Can we appropriete enough benefits from the deployment to offset the costs? • Can we implement the deployment fast enough to accomplish the objectives?