This document discusses technology acquisition, including reasons for acquiring technology, internal versus external sources, and collaboration types. It describes internal acquisition through in-house R&D and the R&D process. External acquisition involves collaboration with external partners through various types such as licensing, alliances, and mergers and acquisitions. The advantages, disadvantages, and impacts of both internal and external acquisition are examined. Open innovation and factors in designing collaboration networks are also covered.

1. 1
TECHNOLOGY MANAGEMENT
BTMU 1023
Lecture 7
TECHNOLOGY ACQUISITION

2. Lesson outcome
At the end of the lesson, the student should be able to
• Understand Reasons to acquire technology
• Differentiate the two types of technology sources : internal
and external acquisition.
• Identify the advantages and the disadvantages of each
type.
• Learn about the variety of collaboration/alliance/network
types and the process of external acquisition.
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3. ACQUISITION
• Acquisition relates to how the company obtain the technologies
needed for its business.
3
Reasons to
acquire
technology
Where to get
the
technology

4. Reasons to acquire technology
4
Develop
technological
capabilities
•Create new product
•Fill the capability
/technology gap
Competitive
environment
•Rapid technological
change
Increase efficiency
•Faster
•Cheaper

5. Types of technology acquisition
• Two types of acquisition
– Internal acquisition through internal R&D capability
– External acquisition through collaboration with external
partners or purchasing from external developers.
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6. Internal Acquisition: R&D
• R&D is a set of processes for creating firms
technologies in-house
• Two main goals of R&D
– Doing research to generate new knowledge and
technical ideas aim at developing new and enhanced
product and manufacturing services and processes
– Developing activities where ides are transformed into
working prototypes and embodies into new product and
services
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13. Corporate
strategy
Technology
strategy
R&D
department
Portfolio of
project
Selection of
project
13
Internal Acquisition: R&d

14. R&D Processes
R&D PORTFOLIO
MANAGEMENT
NEW PRODUCT AND
SERVICE
DEVELOPMENT
NEW PROCESS
DEVELOPMENT
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Selecting, prioritizing a set of projects
Projects can be clustered into groups
Complete process of bringing new product or
Service to the market
Newness of process
From mass production to mass customization

15. Portfolio Management
R&D Portfolio
Management
Optimizing
resources
Finding balance
Short term vs long
term
Risk vs return
Budget and
performance
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16. New Product Development
• Capture and exploit the knowledge
generated by R&D activities
• Can be represented by the NPD FUNNEL
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17. The New-Product Development Process
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New-Product Strategy
New-Product Strategy
Idea Generation
Idea Generation
Idea Screening
Idea Screening
Business Analysis
Business Analysis
Development
Development
Test Marketing
Test Marketing
Commercialization
Commercialization
New Product
New Product
Copyright 2012 by CengageLearning Inc. All Rights Reserved
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18. Categoriesof New Products
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New-to-the-World
New Product Lines
Product Line Additions
Improvements or Revisions
Repositioned Products
Lower-Priced Products
Copyright 2012 by CengageLearning Inc. All RightsReserved
18

19. R&D PROCESSES (3)
• History of process development
– Craft Production
– Process Of Manufacturing Without The Aid Of
Tools
– Example Job Production – Making Canoe,
Pottery
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New process development

20. New process development
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21. Mass Production
• Manufacturing large quantity of standardized
products
• Example : Cars( Ford Motor), Coca Cola, Newsweek
( Magazine)
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New process development

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New process development

23. Mass customization
It is a the process in which the different departments of
the organization such as marketing or manufacturing
make the procedures flexible enough to made the end
products in a way that customer wants
Mass production + customization
“made to order”
Example : self serve design (shoes), self customization (
bicycle )
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New process development

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25. REASON BEHIND TECHNOLOGY ACQUISITION
External Technology Acquisition
• Limited internal resources
• Time pressure
• Lack of Complementary assets
• Protecting image
• Diversification
• Supporting internal technologies
• Avoid development risks
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26. External Technology Acquisition Processes
• Goal setting
• Finding technology suppliers
• Choosing acquisition method
• Contract preparation and negotiation
• Technology transfer
• Managing long term collaboration
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27. Types Of External Technology
Acquisition(1)
1. COLLABORATION
Dimensions of collaboration
• Degree of control
• Duration of commitment
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28. Categories of collaboration
• Purchasing/ arms-length transaction
– One off,
• Subcontracting/contracted-out R&D
– Firm uses the service of research organization to develop new
product/process
• Licensing
– License for the use of technology on a franchise basis
• Alliances
– Ad hoc, joint venture, consortium
• M&A
– Acquire and integrate a foreign entity in the company
Types Of External Technology
Acquisition(2)
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29. Acquısıtıon Channels(1)
• Sponsoring university research
• External R&D centers
• Consultants
• Licensing agreements
• Vendors/ suppliers
• Acquiring machinery or the firm
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30. Make Or Buy Or Collaborate Decision Depends
On
1) strength of the organization’s own
capabilities.
2) respective transaction and governance costs
– contract price, cost of information, monitoring
performance, committing specific assets, handling
complexity in reaching agreements
3) dynamic transaction costs
– costs of persuading, negotiating, coordinating, and
teaching outside suppliers
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31. https://www.dhuautomotive.edu.my/
https://paultan.org/2019/09/24/proton-msias-
first-and-only-proper-oem-faisal-albar/

32. Expected resulting impacts of technology
acquisition
• productivity
• quality
• product development cycle
• labor-management relations
• accuracy of the information flows
• production costs
• flexibility (volume, machine, process,..)
• maintenance costs
• service performance
• sales
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33. Open Innovation
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Open Innovation incorporates external
knowledge into innovation management
A bridge between internal team and external
network.
Co creation
crowdsourcing
Create – share platform

34. Issues in collaboration network design:
• Aim
• Partners
• Duration
• Contract
• Management
• Investment / Re-engineering
• Division of labour
• Strategy
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35. How To Decide On The Type Of Network For
Collaboration?
• The objective of the collaboration
• The content of the collaboration
• The typology of partners involved
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36. 1. What are the advantages of internal and external
acquisition?
2. What are the disadvantages of internal and external
acquisition?
3. What are the major types of collaboration/network used for
external acquisition?
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Discussion questions

37. References
1. Cetindamar, D., Phaal, R., & Probert, D.
(2016). Technology management: activities and
tools. Macmillan International Higher Education.
2. Other sources from the internet
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