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Technologie- und Innovationsmanagement (Subject) / 3) Strategic technology management (Lesson)
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- Technology management - all management tasks to maintain and improve competitiveness of a firm with regard to its technologies- push oriented or pull oriented management -> push: active; innovate from your own incentive (company "pushes" technology into market) -> pull: passive; competitors are forcing to innovate (market "pulls" technology into market)- outsourcing or insourcing in production Key tasks:- passive: adapt the company technologically to changing environmental requirements- active: (re)shape the "technological environment" with own activities Areas of management where considering new technologies is necessary:- establishing and maintaining the competitive requirements- selecting and interlinking suppliers and customers- developing internal relations and structures- creating new or adjusting existing business units- improving the manufacturing process- enhancing information and communication systems Central points of interest:- technology portfolios; focusing on one key technology; technology bundles- protecting technology potential through property rights and HR policy- systematic technology intelligence and close observation of competitors- technology forecasting, evaluation and impact assessment; technology scouting- outsourcing technological services to suppliers; technological alliances etc- independent exploitation of technological knowledge 3, 4
- Sustaining vs. Disruptive technologies Sustaining technologies:- innovations improve existing products- oriented towards central customer needs in existing markets- can be radical; can appear unexpectedly- example: new model of a particular car brand (improvement of an already existing product; technology remains largely intact; improvements based on each other may happen; design is modified: frequent "facelifts" of cars by car manufactures); sailboat, mechanical watch, film camera, music CD, combustion engine, telephone, offset printing Disruptive technologies:- unexpected innovations in a SIMILAR product area- creating new markets- in the beginning innovations don't achieve the performance of established products but they can completely replace established products over time- strategy for dealing with disruptions for established companies (Christensen 2011): autonomous spin-out organization: "spinout" of an independent organization from the existing organization; new organization is small enough to pursue small profits in the beginning; focused on customers that are particularly in need of new product features- example: app-based car sharing sercive on demand (creates a new market; satisfied the needs of customers who don't own or don't (want to) use a car; mobility and immediate usability at different locations possible through car sharing; customers can track and rent the car via app or internet); steamboat, digital camera, MP3, electric car, digital printing, quartz watch, voice over IP 5, 6, 7
- Kodak: innovator's dilemma (established companies lose the competition for disruptive innovations) - Kodak went bankrupt in 2012; they had 90% market share in the US film market in 1976- analog cameras were nearly completely replaced by digital cameras but Kodak didn't innovate or progress in the digital camera market (they didn't exploit their products)- they rested on their success instead of investing in the future/potential new products- Kodak invented digital photography but couldn't keep up with the technology- maintained the status quo (didn't risk anything; avoided innovating)- no knowledge about competitors- too limited by company rules and policies- old manufacturing process- too afraid of making mistakes- didn't want their digital photography products to cannibalize their other products (so they were instead cannibalized by their competitors) What did Kodak do wrong?- looked at the new technology from the point of view of the existing market; were TOO consumer-oriented (too focused on already existing customers)- TOO growth-oriented and TOO profit-oriented when analyzing the new technology- instructed a seperate but not fully autonomous business unit with dealing with the new technology 8-11
- ____ Disruption within the computer industry Mainframe -> Minicomputer -> Desktop -> Pc and Laptop -> Smartphone -> Tablet -> Smartwatches Example of Microsoft: Courier- product concept: digital, dual-screen and booklet-like tablet- intended functions: foldable journal for drafts and sketches ("digital notebook") based on touch input and handwriting recognition- product development was already advanced (and a lot of money had already been spent) but Courier never made it to the market; project was cancelled before launch in 2010- possible reasons for project cancellation: -> Microsoft is a software-oriented company not a hardware-oriented company, maybe they thought Courier doesn't fit their image -> Courier couldn't run apps that Microsoft customers were used to; no email function -> customers misunderstood the use (supposed to be complementary to PCs but was perceived as a replacement for PCs) -> Courier didn't match Microsoft's overall vision -> conflicting goals (push the radically different Courier forward or focus on the development of Windows?) -> too focused on existing customer base (didn't use niche for Courier) VIDEO 16 und 17 12-17
- ?(Disruption for Microsoft) 18
- Lessons learned concerning strategic technology management 1) Initially, disruptive technologies have disadvantages regarding main performance parameters of the mass market- Solution: not aiming for mass market but a niche or targeting non-consumers that greatly benefit from the disruptive technology- Example: Tesla (electric car in luxury segment) 2) competition for resources within the firm: disruptive technologies mustn't prevail against/dominate more established technologies- Solution: form autonomous spin-out organization endowed with independent resources responsible for the disruptive technology- Example:BMW i3 (development wasn't done by the main company (BMW Group)) 3) Large companies require large markets in order to achieve their growth targets - disruptive technologies start in niche markets- Solution: form a small/smaller spin-out organization that can be motivated even by minor achievements- Example: Apple Newton (first PDA; withdrawn from market because revenue target wasn't achieved but it still sold a lot; would have sufficient revenue for a small company) 4) Disruptive innovations can't be successfully marketed by focusing on the existing cost structures, value-adding, sales or revenue logics of established business units- Solution: developing own business models for disruptive technologies- Example: full service airline successfully building and running a low-cost airline under the same roof 5) Market forecasts for disruptive technologies are rarely reliable- Solution: identifying the disruptive technology's driving forces and blocking obstacles; realizing when the obstacles disappear- Example: as soon as the digital camera had at least 4 megapixel it sold well in the mass market and made the analog camera obsolete 19, 20
- Strategic technology management - compromises managerial tasks that deal with establishing and controlling technological success and market success of a company- defines own technological competitive position (for example technological leader or follower) (sticking to competitive position and not withdrawing products)- focusing business processes on competitively relevant technologies- including technological potential into the competitive strategies 21
- Aspects of technological decision tasks 22 Which way to go?- selection of technologies Make or buy?- technology sourcing Keep or sell?- exploiting technologies - selling technologies or "licensing them out" if they don't match the business focus Aims of technology management:- finding an optimal portfolio of procurement sources for technological innovations- dealing with new and old/already used technologies
- Technology intelligence and its 3 levels Technology intelligence:- systemized process that identifies, captures, evaluates and disseminates (verbreiten) internal and external technological trends to determine threats and opportunities to the business- technology information push => identify -> capture -> analyse/evaluate -> disseminate (<- technology intelligence process)- there are TI tools for every step of the technology intelligence process 3 levels of technology intelligence:- technology intelligence organization (top-down or bottom-up approach)- technology intelligence process (identify technologies, capture technologies, analyse technologies, disseminate technologies)- technology intelligence tools (for every step of the process there is a tool) 24
- Technology intelligence organization 25 - first step to create an effective technology intelligence program- technology intelligence system must link market requirements to various technologies, and the sources of intelligence to the needs of decision makers- market requirements influence technologies/the kind of technologies developed Methods of technology intelligence organization:- structural/hierarchical method of coordination (company-based, corporate level, top-down-dissemination; dedicated TI-unit, TI-unit can work themself or delegate the work to lower units)- hybrid method of coordination (project-based; best method to use; team consisting of members from lower units; + more flexibility; + can immediately react to market changes; - dissemination is not done (knowledge stays in the team), + efficient/effective)- informal method of coordination (individual-based; most often used by companies; people from different units are doing different tasks for the technology intelligence coordination; - knowledge isn't shared/"stays" with one person (when the person is gone and their knowledge isn't disseminated/documented, their knowledge is gone too); - no dissemination)
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- Technology intelligence process 26-30 - second step to creating an effective technology intelligence program- the way information is gathered and then transformed into useable intelligence (Technology information push -->) Identification -> Capturing -> Analysis -> Dissemination Identification:- Goal: Find sources of information and find out what type of information is desired- formal sources or informal sources of information- formal sources: -> explicit, codified information -> academic journals, annual reports, patents, trade journals, white papers, government statistics + easier & faster to spread -/+ everybody has access to this information - takes longer to be published (journals, reports, patents); therefore information can be outdated- informal sources: -> implicit, non-codified information -> events, conferences, trade shows, academic roundtables - has to be codified first - time-consuming to capture -/+ information might not be widely known or accessible (-> can be a competitive advantage) + newest accessible/available information Capturing:- Goal: creating a centralized database where information is integrated by different business functions- bring together information to make it ready for analysis of importance- 4 different modes for identification and capturing: Trawl, Mine, Scan, Target- Trawl (Schleppnetz): -> internal (the company searches for information itself) but the searcher doesn't know where the information is kept or if it has been aquired at all -> not aware of intelligence, known intelligence provision, internal focus/inside knowledge -> bad dissemination of information (-> loss of information) -> solutions: corporate incentive awards, internal newsletters, tech landscape maps, big data- Mine: -> aware of intelligence, known intelligence provision, internal focus/inside knowledge -> internal; searcher is aware that information has been gathered and where it is -> information is available in the company but has to be searched for/found -> knowledge management, online search engines, roadmapping, tech radars- Scan: -> not aware of intelligence, not-known intelligence provision (intelligence is not provided??), external focus/outside knowledge -> scan done by external technology scouts -> external (information is sourced outside the company); searcher has not previously identified which information to acquire -> trend workshops, listening posts, innovation panels, opinion papers, bibliometrics, tech brokers, crowd sourcing, patent analysis, technology scouts- Target: -> aware of intelligence, not-known intelligence provision (intelligence is not provided??), external focus/outside knowledge -> external (information is sourced outside the company); searcher knows what to look for, outside the company boundaries -> Venture Capital fund, innovation service consultants, scenario planning, tech transfer organizations, feature papers, delphi interviews Analysis:- analyse information with regard to the ability to meet intelligence requirements of the decision makers and the long-term needs of the organization- 3 functions of the analysis stage: Filter, Integration, Assessment 1) Filter: reducing the amount of information 2) Integration: how captured information can be applied 3) Assessment: reduce duplicate efforts => simple information is transformed into active intelligence Dissemination:- dissemination: communication or embedding of information/knowledge- Goal: easy integration of new found information into the decision process of managers, embedding information into organizational memory, communication of information/knowledge- intelligence is communicated to relevant parties (especially decision makers) in the company- Decision areas: focus on impact on business, systemize findings (integration into decision process), tailored information, breadth of info supply
- Technology intelligence tools 31-34 see slide 31 Incentive Awards, Big Data, Knowledge Management, Patent & Bibliometrics, Online Search, Crowd Sourcing, Technology Brokers, Scenario Planning, Technology Scouts, Venture Capital Funds, Tech Landscape Maps, Listening Posts, Trend Workshops, Innovation Panels, Technology Radars, Newsletters, Feature & Opinion Papers Technology Scouts:- part of the staff of a company or of an external consultant- gather information concerning one specific technological area or technology in general- Goal: facilitate or execute the company's technology sourcing; using weak signals in the market to gain knowledge about potential innovation developments Advantages:+ making sense of innovations that are in the infancy of their life cycles Disadvantages:- scout network is necessary to make the process work- expensive- when technologies scouts are gone, their knowledge is also gone (info has to be codified) Technology Radars:- tool of dissemination- visualizes information that is collected during the technology intelligence process- can be used to identify and pick the best technologies for new projects- Goal: aggregating technologies by their field of application, relevance to the company and stage of development (for example: maturity level)- Zalando: 4 rings (assess, trial, adopt, hold) Advantages:+ effective and efficient for decision makers because information can be quickly and visually appealing presented+ radars can be used as a centralized tool to evaluate and prioritize innovations across the portfolio Disadvantages:- significant input from experts is required to allocate and rank the technologies- tendency to suffer from biases of individuals and group-thinking
- Technology Sourcing - General Goal and characteristics:- enhance and develop competencies- exclusive and protected know-how- risk (development risk, integration risk, exploitation risk)- effort emerging from acquisition and implementation- flexibility (external sourcing is more flexible; internal: building competencies, gaining knowledge, lot of time and money invested into technology development)- Are competencies already existing in the company? Relevant criteria concerning make-or-buy-decisions:- efficiency of internal markets- firm specific- R&D frequency- uncertainty concerning future developments- competitive relevance of technology- balance of power between involved parties 36
- Alternatives of technology sourcing see 37-39 Are competencies already existing in the company?Are the wanted technologies already available? Available technologies:internal R&Dexternal acquisition: licensing-in, R&D suppliers, technology purchase, mergers & acquisitions (M&A), coordinated individual R&D Non-available technologies:external R&D: R&D exchange, joint research, contract researchinternal R&D Cooperative hybrids (acquiring technology but further developing it with the developer(s)) - more flexibility when external sourcing- internal sourcing: build competencies, gain knowledge; lot of time and money invested into technology development- choose alternative depending on most relevant/important criteria External Internalexternal acquisition external R&D cooperative hybrids internal R&D -------------------------------------------increasing vertical integration---------------------------------------> (To what extent is technology sourcing integrated/internal?) Internal R&D:+ high possibility to build up core competencies+ high possibility to influence R&D- not flexible- not time efficient-> use when: long TLC (enough time to build core competencies), stable market External acquisition:+ highly flexible+ highly time efficient- no possibility to build core competencies- no possibility to influence R&D-> use when: turbulent technology development market
- Internal R&D Goal:- giving room for creativity and proactivity through self-organization and quick task fulfilment 2 organizational systems:- internal organization of R&D department- integration of R&D department into the overall organization Localization:- staff- main department level- sub-department level- decentralization Advantages:+ stable market: continuous development of technologies; cost amortisation+ side products can be found (diversification strategies); entering new markets/segments+ exclusive rights+ first-mover; technology leader; reputation Disadvantages:- at first: really expensive; only costs and no revenues in development phase- continuous development- bounded human resources (employees have to work on it and can't work on their actual tasks- not flexible; less flexible than external R&D- danger of parallel research (with competitors)- if decentral: organisation problems 40
- Licensing-in - Definition, Advantages and Disadvantages, Conclusion - external acquisition- licensee buys license from a licensor; the license authorizes the use (often for a limited time) in exchange for a monetary compensation- licensor remains the owner of the technology- forms of licenses: -> patent licenses, know-how-licenses -> exclusive licenses (only 1 company is allowed to use it)- should only complement core technologies but not be the core technology Advantages:+ closing technological and capacity-related gaps; time savings; reduced risk Disadvantage:- dependencies on the licensor Conclusion:- valid alternative... -> in "bottleneck situations" (Engpasssituation) -> if quick actions or fast market entry is required -> to complement (not fully replace) own technological capabilities Examples:- Apple: uses moldable, durable, hard and castable (gießbar) alloys (Legierung); exclusive license from a metal specialist- Apple: uses clock design ("Schweizerische Bundesbahnen") for iPad; had to purchase license after using it without permission- Apple: iTunes interface resembles sketch of Mirror Worlds Inc.; buys license- Apple: Apple Music licenses concept of "Carpool Karaoke" to produce spin-off show=> for licensors: better licensing it out than selling it because license contracts can be negotiated every time the license runs out and Apple is dependent on the license (-> more revenue by licensing out instead of selling) 42, 43
- Technology purchase - external acquisition- buyer purchases ownership and exclusive rights of use of a certain knowledge- Goal of the seller: solve specific technological problems ("waste products")- special form: wooing away technical personnel Advantages:+ quick availability of the technology+ risk can be easily calculated+ prevents that company is licensing technologies to other companies+ also buying the staff -> easier to integrate+ quick/fast/time-efficient Disadvantages: - problematic implementation (cultural aspects)- company doesn't have skills needed for implementation Conclusion:- only an advisable alternative if... -> adequate technologies are hardly available -> the acquisition of exclusive rights of use is guaranteed -> time-related bottlenecks can be overcome 44
- Cooperative hybrids - agreement in form of a contract between two or multiple independent companies with the goal to mutually complete operational tasks and to strengthen all involved parties- prerequisit (Voraussetzung): partner should have even or more know-how, trust in the other company /trustworthy partner company- always cooperate with companies that have something you don't have - Intensity (often determined by the scope of the outsourced task from the original, individual firm processes): -> mere exchange of experiences -> collective execution of individual or multiple tasks -> complete outsourcing in the form of a joint venture- forms of cooperation: -> horizontal cooperation (same level of value chain; have the same goal) -> vertical cooperation (upstream or downstream) -> joint venture Advantages:+ overcoming a shortage of own financial and human resources+ share risk between companies+ make use of synergy effects (complementary skills/assets/know-how) Disadvantage:- insecurity concerning confidentiality and exclusivity Conclusion:- effective instrument to increase competitiveness of the cooperation partners (if it is the only possibility to develop technologies with high technological and market potential when development risks are high and there are not enough resources available for the involved parties) Example: BASF and Adidas- Infinergy- vertical cooperation (no (direct) competitors cooperating (don't have the same goal; -> conflict of interest); adidas is BASF's customer; co-dependency (more risky than horizontal co-op))- BASF developed the needed technology (foam with high elasticity; rebound effect)- Adidas uses foam in their products (running shoes) 45, 46, 47, 48
- Contract research - external R&D- private or public institutions take over a company's R&D activities and provide the company with results- often used by small companies (because they don't have enough capacities/resources or don't find a co-op partner) Advantages:+ often the only way for small companies (goal: imitating a technological leading role)+ rather cheap Disadvantages:- insecurity concerning confidentiality and exclusivity- no learning effects in own research processes- company is not familiar with organizational and market circumstances of the contract research company- potential coordination difficulties between partners Conclusion:- alternative to internal R&D activities if -> there are highly specific problems which require developing own capacities -> shortages need to be overcome -> there is a demand for specific expert knowledge Example:- Dr. Severin sells skin care products but the product development is outsourced 49, 50
- Objectives/Goals of technology exploitation 52 Internal exploitation (to achieve a technological successful position) External exploitation:-> financial goals: generating additional funds; amortizing R&D costs; reducing tax burden; securing "freedom to operate"-> strategic goals: entering new markets; accelerating diffusion; setting standards; defending the technological leadership; improving company reputation; strenghtening the corporate network; taking advantage of learning effects
- Technological exploitation possibilities 53 - keep or sell-decision Internal exploitation:- internal utilization Joint exploitation with external partners:- joint exploitation without equity participation: virtual business, strategic alliance- joint exploitation with equity participation: joint venture, spin-off, company sale Selling of rights and know-how:- joint utilization- technology sale- licensing-out 53
- Internal utilization - internal exploitation- exploiting the technology in marketable products or production processes Exclusive internal utilization is recommended for technology fields...- which enable high monopolization potential- which allow to exploit synergies- which are in an early stage of development- which possibly have a long technology life cycle- for which the company possesses sufficient capacities concerning market entry and penetration- with a high attractiveness Disadvantages:- high commitment (developing the technology further so that it won't be outdated)- opportunity cost if technology can be better used by another company and therefore sold at a higher price (benefit of selling technology license is higher than benefit of using the technology themselves) Conclusion:- benefits of exclusive know-how have to be compared with benefits of full exploitation of potential returns Example:- Nike Dri-Fit technology: Nike developed Dri-Fit technology and decided to use it only for itself 54, 55
- Joint utilization - selling rights and know-how- collaborative exploitation of a technology mostly emerges from a R&D cooperation- only use it with vertical cooperation Advantages:+ sharing market development costs and marketing risks+ exclusive utilization of the technology's monopolization potential for involved companies+ more controllable knowledge diffusion compared to licensing out Disadvantages:- transaction costs- no exclusive utilization that could lead to a potentially sole competitive advantage Example:- Bosch and Siemens: technology Home Connect; BSH Haushaltsgeräte GmbH is joint venture of Bosch and Siemens 56, 57
- Technology sale - selling rights and know-how- selling the property and giving up the right to use the technology- suitable for technologies that don't match the company's basic strategic orientation or its purpose or technologies for which there are no exploitation possibilites in the company or the entire industry Distribution channels:- patent exploitation companies- SIGNO partners- direct or indirect addressing- informative mails- fairs or exhibitions- publications or press releases- online marketplaces example:Transcatheter Technologies GmbH: they develop technologies and then sell them; develop new technologies from money gained by selling other technologies 58, 59
- Licensing-Out - selling of rights and know-how- temporary selling of the rights to use against a license fee- performance level of competitors is way higher -> better to buy it from them- if licensor and licensee are competitors: licensee wants exclusive license, licensor wants sole license- region-based licenses: can be used as a test market when licensees use technology in another market where licensor isn't present Advantages:+ preventing or delaying the development of rival technologies+ technology-specific return optimization+ vertical licensing (licensing to non-competitors) can ensure the required performance level of inputs+ customers are (highly) dependent on you(r company) and your license; especially if technology is a kew technology for the customer Disadvantages:- giving up differentiation possibilities because of conscious standardization of the technology structure Questions concerning licensing-out to select relevant technologies:- Is the technology licensable? (characteristics: sufficient certainty regarding future developments in this technology sector; high performance level, high technological competence of licensor; high relevance for potential licensee; broad application possibilities; high potential concerning future developments of the licensor; insufficient internal exploitation possibilities for licensor)- Should the technology be licensed? -> depends on TLC and performance potential -> non-exclusive: technology should be widely applicable -> licensing out and developing it further (safer because patent will run out & technology can be copied by others); when it won't be further developed: rather sell technology than licensing it out Example: Ibuprofen- 65-67 60, 61, 65-67
- Licensing-Out - Licensing scope Sole license:- exclusive license but licensor don't let the licensee exploit the intellectual property Non-exclusive license:- licensee buys the right of use but licensors are allowed to sell the license to others and to exploit the intellectual property themselves Exclusive license:- licensee buys the right to use and exploit a technology/innovation (limited to a certain territory or market)- advantages for licensee: + possibility of generating monopoly profits + (advantage???) using the license may come with high development and switching costs- disadvantage for licensee: -> market penetration of the innovation can be more difficult than with multiple licensees -> higher risk; especially for small firms- advantages for licensor: + higher royalty and better contract conditions + low transfer costs + easier control of use- disadvantages for licensor: -- higher incentive for competitors to pursue "innovations for circumvention" (Umgehung) (competitors develop "same but different"-technologies) -> patented technology will lose value (will be worth less) - often start-ups and small companies buy licenses from companies because they can't develop it themselves- 62
- Licensing-Out - determination of royalty fees 63 extent of royalty fee depends on:- perceived value for licensor (development costs; costs of license administration; project costs; planned profit/benefit)- perceived value for licensee (cost-benefit analysis; technological monopoly situation/market transparency)- perceived value for approving authority (macroeconomic utility; private or political interests)
- Licensing-Out - overview of different compensation forms 64 monetary compensation:- direct payments: -> "lump sum" royalty: pay per license (if value of technology can be estimated); fixed amount; pay first (entire amount); + good for licensor (no further risk) -> "running" royalty: based on sales license fees is determined/paid; quota-license (if quota is reached license has to be paid); licensee: pays patent with revenue, information duty (but often licensee doesn't want to share this information)- indirect payments (license is free but licensee is asked to buy products from licensor) non-monetary compensation:- transfer of know-how -> licensee gets license, develops it further and has to share new info with licensor -> sharing of entire script -> staying up-to-date with own technology -> next license is worth more because of more developed technology- transfer of tangible goods -> products and services based on technology (result of technology exploitation) is shared with licensor - most often used compensation: quota license based on profit mixed with lump-sum royalty