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Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
Essential of Technology Entrep. & Innovation- Chapter four  technology life cycles
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Essential of Technology Entrep. & Innovation- Chapter four technology life cycles

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In chapter four of the course we are discussing the technology life cycle. …

In chapter four of the course we are discussing the technology life cycle.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization

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  • 1. CS443 Course Introduction To Entrepreneurship p p Spring 2009, Modern Science & Arts University Chapter Four: Technology Life CyclesInstructor:Al-Motaz Bellah Alaa Al-AgamawiChapter Source, “chapter five: technology life cycles” from “customized management oftechnology” book, by Tarek Khalil, 2000, McGraw-Hill Companies, Inc. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 2. The S-Curve of Technological Progress2 A technology s improvementof performance follows th S- f f f ll the Scurve. When a technologyperformance parameter (y axis)is plotted against time (x axis), pthe result resembles an s-shapeddiagram culled the S-curve. Technological performance canhe expressed in terms of anyattribute, such as density in theelectronics industry (number oftransistors per chip) or aircraft i hi ) i fspeed in miles per hour. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 3. Technology Progress Life Cycle- TLC3 (1) the new invention period, also known as the embryonic stage The new invention period is characterized by a period of slow initial growth . This is the time when experimentation and initial hugs are worked out of the system. (2) the technology improvement period, also known as the growth stage The technology improvement period is characterized by rapid and sustained growth. growth (3) the mature-technology period . The technology becomes vulnerable to substitution or obsolescence when a new or better-performing techno logy emerges. Th mature-technology period starts when the upper limit of the technology is The h l i d h h li i f h h l i approached and progress in performance slows down, This is when the technology reaches its natural limits as dictated by factors such as physical limits . Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 4. Example4 The vacuum tube technology was limited by the tubes size and the power consumption of the heated filament. Both of these factors were natural barriers to electron conduction in a vacuum tube, Electronic engineers could not overcome these limitations. The arrival of the solid-state technology, or transistor, which permitted electron conduction in solid material, changed the physical barriers of size and power. The t Th transistor t h l i t technology started a new t h l t t d technology life cycle and rendered lif l d d d the vacuum-tube technology obsolete. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 5. Changes in Natural Limits of Technology5 A technology may progress on curve A or A , depending on a number of factors, including the type of the technology itself and the cost and time devoted to its development. A newer technology d l t t h l (B) has a higher limit of performance for the same parameter. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 6. Changes in Natural Limits of Technology6 When a technology reaches its natural limits it becomes a mature technology vulnerable to substitution or obsolescence. A technology s rate of performance improvement is dependent on the effort technologys devoted t0 its development. It may progress at a faster rate and will influence the progression of the older technology. t h l Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 7. Example7 Ceramics, which have higher operating temperatures and substitute for metals used in internal combustion engines; the newer technology permits better performance of the engines. The performance of the engines can continue to improve as a result of a sequence of newer technologies, each with a higher limit of the th performance parameter of interest. f t fi t t Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 8. Technology Life Cycle and Market growth8 When technology reaches the market, it generates income. Technology under development has no real income-producing value. Technology on the shelf (i.e., not being marketed) provides no return. As technology develops. following the recognized technology life cycle, market penetration occurs and so does market growth, expressed as market volume growth volume. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 9. Technology Life Cycle and Market growth9 The x axis represents time and th y axis represents th market the i t the k t volume expected at six technology phases: ( I ) technology development phase, (2) application launch phase, (3) application growth phase, (4) mature-technology phase, (5) technology substitution t h l b tit ti phase, and (6) technology obsolescence phase. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 10. Technology Life Cycle and Market growth10 During the technology development phase the market does not recognize the technology at all; it has zero response. However, this is the important period in which scientists and engineers are spending significant amounts of effort and money to create the technology, develop prototypes, and test the new technology. The goal of any R&D manager should be to reduce this time period as much as g y g p possible, since it is very expensive and does not produce revenue. Once the first wave of the new technology application is launched into the market, market the market volume follows the path of technological progress. This is progress characterized by slow initial growth during the launching period, followed by rapid growth. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 11. Technology Life Cycle and Market growth11 During the growth phase of the technology penetration into the market will technology, depend on the rate of innovation and the market needs for the new technology. The growth rate slows down as the technology approaches its maturity. At some point, the market volume will peak and then start to decline. This will happen when the technology matures and enters its substitution phase. Companies that continue to use the old technology in this phase will be faced with p gy p a shrinking market share and a fall in revenues. The final phase is technology obsolescence, during which the technology has little or no value value. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 12. Multiple- Generation Technologies12 Technology like all systems Technology. systems, has a hierarchy. A system can consist of a number of subsystems, and each subsystem may have a number of components. p Technology need not consist of a single component or derive from a single innovation innovation. Technology can consist of multiple technologies and derive from different generations of innovation. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 13. Example13 The personal computer is a technology and has a technology life cycle. It consists of several sub technologies, One such sub technology is the microprocessor, which can also be defined as a technology with a technology life cycle all its own. In turn the microprocessor has its own multiple-generation technologies or sub technologies. For example, the microprocessor technology developed by a company such as Intel has undergone several generations of changes (8088, 286. 386, 486, Pentium). Each of these generations of innovation helped boost the technology life cycle of the microprocessor and, in turn. that of the PC. The same concept applies to software technology, Any software developed for a major application undergoes several generations of change. The changes improve the change software and extend its useful life. If a company developing software stops its development after one generation and another company continues to develop new generations, the former wilt fi d it lf unable 10 compete with Ih l tt s newer ti th f ilt find itself bl t ith Ihe latter generation technology. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 14. Technology and Market Interaction14 A very strong dynamic relationship exists between technological innovation and the marketplace. The presence of a market or the creation of a new market represents the reward for technological development. It is only when technological developments find a market that scientific research pays off and the development cost is reimbursed in economic or social terms. ff d h d l i i b di i i l Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 15. Science-Technology Push15 we can say that science provides the base for the technological push. Innovations that ensued from the technologies caused major industry upheavals and totally changed the markets markets. They brought major economic growth. Radical innovations of products within a technology area create similar effects. An A example of a radical innovation that created a major change in the way we l f di l i i h d j h i h do business is xerography. When the Xerox machine was developed, it was dubbed an invention with little promise and a product concept without a mark et (Mort, 1990). Observe where this copying industry is today. Radical innovations create new markets and expand existing markets. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 16. Market Pull16 Technological development is also stimulated by market pull. Technology is often g p y p gy developed to meet a market need or demand. In the majority of cases, market pull is stimulated by consumers. Consumers may or may not know whether a new technology exists or is being developed, or if they do, they may not understand the technology. Most of the technological developments stimulated by market pull are of an incremental nature, or represent improvements to existing technologies. Incremental technological improvements have a cumulative effect , and they can have a tremendous impact on productivity and competitiveness. p p y p When there is a strong collective demand for a solution to a specific problem (such as a vaccine for AIDS), market pull may provoke major breakthroughs. Both mechanisms push and pull . contribute to stimulating innovation and mechanisms, technological change. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 17. Integrating Technology Push and Market Pull17 Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 18. The Product Life Cycle18 A product life cycle closelyresembles the profile of thetechnology life cycle and itsassociated market-growth profile. A product emerges from aconcept. Which is translated into anengineering design and usuallyillustrated through an engineeringdrawing. A prototype is developed andtested to make sure that the productspecifications are met and theperformance parameters achieved. f t hi d Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 19. The Product Life Cycle19 I thi i iti l d i In this initial design-and-prototype- d l d t t development phase. th product h not yet met t h the d t has t t tthe market and has no wealth value to the company. The second phase is the product-launching phase. followed by the growth phase.whose profile depends on the market response to the product. Typically, sales start slow and then accelerate as the product becomes known andaccepted in the marketplace. As the product is diffused in the market and the market becomes saturated with awell-established mature-technology product, the growth rate is likely to slow down. New N products threaten mature-technology products and may substitute for them and d t th t t t h l d t d b tit t f th deventually render them obsolete. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 20. Competition at Different Phases of Technology20 In the early stage of the technology life cycle, also known as the embryonic oremerging technology stage, competition is based o n innovation. In this stage, thetechnology is still developing and has not been fully accepted. Companies depend ontheir innovation to add value to products and services they bring to their customers .The introduced technology has not yet demonstrated its potential for changing thebas is of competition. In the I th early phase of th growth stage of th technology life cycle , th i t d d l h f the th t f the t h l lif l the introducedtechnology helps expand the market size for the product or service offered. Thetechnology becomes a pacing technology in that it has the potential for changing thebasis of the competition. In this stage a company must be able to balance its growthstrategies with its marketing strategies. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 21. Competition at Different Phases of Technology21 Once the innovation has proved itself in the market , it permits its Owner to take apatented position or to define the industry standard. A dominant design of theproduct emerges, and the technology has a major impact on the value -added streamof performance, cost, and quality. Technology in this phase of the growth stage is known as key technology, and acompany should increase its capabilities in this area to compete. When the t h l Wh th technology reaches a stage of maturity and the rate of innovation h t f t it d th t fi tideclines, it becomes a commodity, available e to all competitors. Technologies in thiscategory are also recognized as base technologies and have little ability to give acompany a strong competitive edge. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 22. Competition With Product and Process Innovation22 When a new product or process is introduced to the market, it creates certainenergy within the innovation community, triggering a series of changes to the productor process. Over ti O time, th rate of i the t f innovation of new products or processes increases, reaches a ti f d t i hplateau, and then decreases, creating the inverted V-shaped curve shown. At the early stages of product development, competition in innovation andimprovement delays agreement on a standard design. A leader in innovation has the opportunity to set the standard. A company should strive to be in such a position because once a dominant design isestablished in the market by another company, it will be too late for the company toset a different industry standard based on its own product. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 23. Competition With Product and Process Innovation23 It may have to settle for being a follower, in which case it will have to developanother strategy to obtain a leading position in the marketplace. One approach is 10 rely on process innovation to reduce cost. Another is to rely o ncomplementary assets. such as, name recognition, to increase market share . l t t h iti t i k t h Yet another is to use marketing innovation and improve customer service to lurecustomers away from competitors . Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 24. Competition in Mature Technology24 The competition switches from being based on innovation to being based on price andquality. Process innovations tend to dominate, and they assume greater importance In edge.achieving a competitive edge Companies compete by introducing product lines into segmented markets. Companies rely on economy of scale to reduce price . Specialization and production efficiency within companies assume greater importance. ff Only firms with dominant markets tend to survive. This favors large companies.Mergers and acquisitions of companies assume greater importance in companiesstrategies. Large organizations with mature technology tend to be rigid. bureaucratic, andmultilayered. Such a structure often impedes innovation and is a threat to sustainablesuccess. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 25. Competition in Mature Technology25 Companies with mature technology become subject to increased competition bythose who have lower production costs, lower labor rates, or lower overheads. Thisintroduces international competition as a major factor. Mature t h l M t technology i continuously th t d by substitution of newer technology. is ti l threatened b b tit ti f t h lManagement must be alert to emerging or competing technologies. A companys success in introducing a product innovation gives it a leading edge but does not guarantee sustained competitive advantage. Managing technological innovation requires that an organization continue to introduce incremental innovations and forecast future changes in order to ensure continued existence in the face of discontinuous innovation. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 26. Diffusion of Technology26 A technological innovation. a new idea, or a new system is considered to besuccessful when it is adopted by users and diffused through the user population. Diffusion is the process by which an innovation is communicated, over time, throughcertain channels t members or a social system t i h l to b i l t Adoption of a certain type of technology is usually based on the possible efficacyof that technology in solving a perceived problem. Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi
  • 27. 27 Q&A… Technology Life Cycles Chapter 4 By: Motaz Al-Agamawi

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