Essential of Technology Entrep. & Innovation- Chapter three critical factors in managing technology

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In chapter three, we are discussing the critical factors of management of technology.
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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Essential of Technology Entrep. & Innovation- Chapter three critical factors in managing technology

  1. 1. CS443 Course Introduction To Entrepreneurship p p Spring 2009, Modern Science & Arts University Chapter Three: Critical Factors in Managing TechnologyInstructor:Al-Motaz Bellah Alaa Al-AgamawiChapter Source, “chapter three: critical factors in managing technology” from “customizedmanagement of technology” book, by Tarek Khalil, 2000, McGraw-Hill Companies, Inc. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  2. 2. Technology and Creativity2 Technology is an Expression of human Creativity. Managing Technology involves continuous effort in creating Technology, developing novel products and services, and successfully marketing them. This requires great creativity along with a system designed to exploit them. It also requires an investment in Research and Development-R&D. R&D is a costly endeavor. It is a risky investment and therefore needs to b well i tl d i ik i t t d th f d t be ll managed. It is an investment in the future that can not be neglected, nor can its value be underestimated. Technology creation and exploitation require a chain of events, starting with inventions and end at the market place. ve o s a d e d a e a e p ace. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  3. 3. The Link Between Science and Technology3 May never be developed into marketable products Invention Has No Instantaneous Scientific Innovation Adopting Invention commercial value Discovery Market Buying or ignoring the Place innovation Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  4. 4. The Link Between Science and Technology (Cont.)4 Scientific Knowledge focus on natural phenomena is neutral on the question of how this knowledge may be used. Historically Speaking scientific knowledge and technology progressed slowly until Speaking, very recently. Only when science and technology started to interact and enforce one another did the real explosion in knowledge and technology development. When we discuss science we mention scientific discoveries But when we talk about technology, we mention technology innovation gy, gy Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  5. 5. Types of Innovation5 Radical/Revolutionary: / y Radical breakthrough innovations are usually based on an invention. They change or create new industries. firm. They are relatively rare and typically start outside the boundaries of a firm When they are developed within the boundaries of a firm, they signify the introduction of something that is not only new to the organization but drastically different from its existing practice. Example: Invenstion as the transistor, which was invented in Bell Laboratories, was , , the starting point of phoniminal development in the electronics industry. Development of xeography by Carlson triggered radical innovation in the photocopying industry and created a market of more than 20 Billion USD. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  6. 6. Types of Innovation (Cont.)6 Incremental/Evolutionary: / y These are small but important improvements in a product, process or service. They are relatively common and are created within the firm of an industry. marketplace. They help companies maintain a competitive position in the marketplace Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  7. 7. Creativity and Innovation7 Innovation is associated with the creation of value or the satisfaction of a customer need. Creativity is the engine of innovation. The essence of creativity is combining two or more ideas to arrive at an entirely new one. For Example, Henry Ford assembly line was based on combining the production of standardized parts, as a concept that had been introduced a century earlier, with the idea of bringing the parts to the worker rather than moving the worker to the parts. p Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  8. 8. Bringing Innovation to Markets8 There are time lags between the different stages of the innovation cycle’s g g y sequence of events- science, invention, innnovation and market. The manipulation of these time spans is an important and effective competitive weapon. weapon Good Example: Microsoft: Strategy of licensing its DOS operating system for use by many computer companies and then making its Windows 95 program available on each PC, thus creating customer commitment to the product. The profit Microsoft makes on each unit of software is minimal, however, the market p , , penetration permits the cornering of the software market for many years. Apple Computer company on the other hand, kept its Macintosh user friendly operating system software proprietary for many years and refused to license it to other PC makers. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  9. 9. Apple Macintosh Launch Event- Video9 http://www.youtube.com/watch?v=lSiQA6KKyJo&feature=related Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  10. 10. Technology Price Relationship10 When an entity such as a company has a technological advantage, it is able to y p y g g , command a premium price for its technology. The magnitude of this premium is dependent on the value of technology to customers. customers If the knowledge gap between the company (as the owner of technology) and the customer is high, the owner can command a high price. As the customer gain experience with the technology, the knowledge gap shrink. The value of the technology, as well as the commanded price, will decline and eventually vanish. y Strategies for and appropriate rates of technology diffusion should be based on exploiting the price advantage of the difference in knowledge. One approach is to continue building a technological lead over time time. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  11. 11. Technology Gap/Price Relation11 echnolog Knowledge Own Price Knowledge gy GAP Customer Knowledge Te Technology Gap Time or Diffusion Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  12. 12. The Timing Factor12 One of the factors of vital concerns in proper management of technology is the p p g gy timely creation and introduction of technology into the marketplace. Equally important is the timing of the introduction of follow-up technology that will performance. improve performance Continuous improvement of products and the production capabilities of the corporation are vital for the firm’s health and survival. “Timely” is the key word in this discussion. Action must be taken at the right time if an enterprise is to succeed in a competitive marketplace. p p Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  13. 13. Osborn Computer Company- Case Study 13The Osborne Computer Corporation (OCC) wasfounded by Adam Osborne in 1980 based on aproduct of not just personal computers but portablecomputers. Adam Osborne asked Lee Felsenstein todeve op s portable co pu e wdevelop his po ab e computer with the result being e esu be gthe Osborne 1.The Osborne 1 featured a 5 inch (127 mm) 52-column display (this size of Screen only allows 60printed columns instead of the 80 commonly used bypeople migrating from punch card mainframes), twofloppy-disk drives, a Z80 microprocessor, 64k of RAM. Osborne struggled under heavy competition. K Ob l d d h KayproComputer offered portables that, like the Osborne 1,ran CP/M and included a software bundle, butKaypro offered larger 9 inch (229 mm) screens(supporting 80 columns). Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  14. 14. Osborn Computer Company- Case Study14In 1983, the inventor Adam Osborne pre-announced several next-generation , p gcomputer models (the "Executive" and "Vixen" models) which had not yet been built,highlighting the fact that they would outperform the existing model. According tothe myth sales of the Osborne 1 immediately plummeted as customers opted to myth,wait for these improved systems; this caused an attendant drop in cash flow andthus profits, and a few months later the company became bankrupt.Osborn shipped his first computer in July 1981. In two months the company hadits first $1 Million in sales, and by the second year its net revenues reached $100 $ , y y $million. Six months later the company was bankrupt. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  15. 15. The Vision to Change Strategy15 When a company has a strong market and its revenues are good, management p y g g , g tends to lose sight of environmental changes that may affect the company’s competitive position and sometimes even its survival. day-to-day It is very common for managers to be drawn into the routine day to day problems of running a business. This can make them lose their vision for change and enthusiasm for innovation. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  16. 16. Managing Change16 The only thing certain is change. y g g The tasks associated with generating new ideas, creating new products, controlling production, and dealing with a new breed of competitors and demanding customers are some of the challenges faced by today’s managers. today s managers The key issue for management in the current environment is how to utilize the existing capabilities of the organization to take advantage of the possibilities. The solution lies in creating a flexible, highly competitive organization capable of coping with the state of the external world. Whether it involves technologies, markets, suppliers, or competitors, successful g , , pp , p , managers of technology must be able to recognize and react to external change as early as possible. Survival is at risk if a company cannot forecast or foresee the changes in the external environment. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  17. 17. Leaders Versus Followers17 Winners are those who can bring technology to the market. In terms of g gy technological innovation, a firm can be one of three types: Leader: A Leader is a firm that is the first to market an innovation. Follower: This firm misses the initial wave of capitalization on the technology but recognizes the technology’s impact on its business. Such firm follow closely behind the leader. They may be able to catch up or surpass the leader if they can capitalize on their strength. Laggards: This type of firms realize a potential for profit on technology but seldom influences technology’s use. Laggards engage in “me-too” behavior, gy gg g g , according to Holt (1990). Often, their survival may depend on adopting new technology. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  18. 18. The Advantages of being a Leader in Innovation18 Name Recognition: The names of leaders with innovative products come to be g p well known by the public (Kleenex instead of tissue, Xerox instead of photocopy). Better Market Position: Being first to market gives a firm an opportunity to share. capture a large market share A chance to define industry standards. A Head start on the learning curve. Protective Barriers: By Patents and other means. High Profits: By Establishing a technology gaps between their products and their customers and competitors. p Delayed Customer Switching: Leaders establish special relation with their customers. Brand Royalty and cost of switching. Favorable response by outsiders: leaders have better potential for getting support from government, VC and other industries interested in their innovation. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  19. 19. The Disadvantages of being a Leader in Innovation19 The leader assumes the large cost associated with research, prototype, testing g ,p yp , g and overall development. The leader must be able to sustain the lead. There are cost associate with technology. updating the technology The initial investment in design, tooling, and production may create difficulty in reversing the course of action should a competitor introduce a better technology or an improved design. There is a market uncertainty associated with the introduction of new technology. It is difficult to predict demand and to set an optimal price. p p p The leader is a target for competition. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  20. 20. Chapter Assignment… Assignment Deadline: Next W k lecture. A i t D dli N t Week l t20 Class will be divided into three groups each group will take one of the following (note each group will have only 15 min to demonstrate its presentation): Microsoft, Apple, IBM Through Searching the internet, prepare a presentation about one of the above companies from the development of the PC perspective… Illustrate company History overview Quick overview about Personal Computer Market at this early time. Describe company PC strategy and describe if company was a leader or a follower in PC p y gy p y market (with justifications) How company managed the competition and what was its main competitive edge. Include company time line with the PC since early eights and until today, in brief. Describe your own perception about the following; what if the company had not entered the PC race, and the effect of this on the PC/information technology markets. Include all your references and source of information. Include as much graph, diagrams and video as possible. Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  21. 21. Extra Resources …21 For Microsoft, Apple and Osborne: http://www.youtube.com/watch?v=fUYy-y0Fyag&feature=related http://www.youtube.com/watch?v=uQV2m2pafaw&feature=related // / http://www.youtube.com/watch?v=oIwz6Amffb8 http://www.youtube.com/watch?v=lSiQA6KKyJo&feature=related http://en.wikipedia.org/wiki/Osborne_Computer_Corporation // / / http://en.wikipedia.org/wiki/Osborne_Effect#The_Osborne_Myth http://freepages.genealogy.rootsweb.ancestry.com/~tlosborne/Osborne/Osbornehist ory/Adamosborne/adamosborne.htm http://www.intosaiitaudit.org/intoit_articles/18p63top63.pdf http://entrepreneurs.about.com/od/famousentrepreneurs/p/adamosborne.htm Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  22. 22. Nice to See…22 Bill Gates and Steve Jobs interview: http://www.youtube.com/watch?v=_5Z7eal4uXI&feature=related http://www.youtube.com/watch?v=lK_HThS8DZo&feature=related // / http://www.youtube.com/watch?v=Scf6dV4FSf8&feature=related http://www.youtube.com/watch?v=cCvLTlQWT6A&feature=related Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi
  23. 23. 23 Q&A… Critical Factors in Managing Technology Chapter 3 By: Motaz Al-Agamawi

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