1) Technology can impact businesses by enabling new business models or changing existing ones. It allows companies to organize their activities and generate revenue differently. 2) Companies must assess whether technology presents an opportunity or threat to their competitive position. It may allow some businesses to gain an advantage while threatening others. 3) When developing new technologies, companies can choose between in-house development, alliances, or acquisitions, with each approach having different risks and requirements.

1. Technological
Environment
Technological
Environment
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Presented By –
•Lokesh Irabatti
•Shubham Joshi
•Omkar Kshirsagar
•Tanya Birdi

2. Strategic importance of technology
• The key relationship to consider is that
between technology and strategic success
• Technology may not be a source of
competitive advantage – if competitors
exploit it too
• Rapid technological change can challenge all
competitors in a market
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3. How technology can change a “business model”
What is a business model?What is a business model?
How a business organises its activities to generate income
(revenues) and incur costs
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4. Examples of “business models” (1)
Facebook generates revenues from advertising, using
the platform of over 500 million users.
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5. Examples of “business models” (2)
Low-cost airline generates revenues by selling direct to
consumers (avoiding intermediaries) with a high proportion of
bookings made online
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6. Technological change provides an opportunity to
change business models
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7. Technology mechanisms
Technology
Mechanism
How It Potentially Creates an
Advantage
Example
A new process Produce faster, at lower cost or
better quality
Online video
streaming
Solve a complex
problem
Do something competitors find
hard to master
Google search
engine
A new product The first product to market The iPad & iPhone
Protect a
valuable idea
Have something others can only
sell if they pay for a licence
Pfizer’s Viagra
Rewrite the rules A completely new approach
which makes other products and
markets redundant
Smartphones
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8. Technology and Porter’s Five Forces?
Force Examples of Potential Impact of Technology
Barriers to entry May reduce economies of scale – encouraging new
entrants (e.g. digital publishing)
In some case barriers may rise – as products become
more complex and processes difficult to copy
Substitutes New products may displace old – e.g. Online streaming
for DVD, which in turn replaced videotape
Technology in other markets may “steal” customer
spending from other markets – e.g. more spending on
smartphone apps may reduce spending on PC software
Power of customers
(buyers) & suppliers
Technology may free businesses from a single source of
supply – e.g. Cloud-based applications v Microsoft
Competitive rivalry Rivalry is diminished is technology is successfully
patented and licensed
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9. Opportunity or Threat?
• Some businesses may be technology leaders –
where technology enables them to gain an
advantage
• Most other businesses need to assess the
threat posed by technology on their
competitive position
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10. Examples of technology as a threat
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11. Examples of technology as a threat
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12. Examples of technology as a threat
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13. Innovation and technology
• Developing new technology is usually
expensive
• The investment returns depend on the extent
and pace at which a market adopts new
products, or improved versions of existing
products
• This is known as innovation diffusion
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14. Supply-side factors affecting innovation
diffusion
Supply Factor Potential Effect on Technology
Degree of
improvement
Does the technological change provide enough incentive for
customers to change?
Compatibility Is the new technology compatible with existing products?; Are
older products likely to become obsolete?
Complexity Does the product or the way it is marketed (e.g. pricing) make it
too complicated for the majority of customers to understand?
Experimentation Can customers test the new technology before committing to
buying it? What feedback is available from early-adopters?
Customer service How easy is it for potential customers to get answers to their
questions before committing to the new technology?
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15. Demand factors affecting innovation
diffusion
Demand Factor Potential Effect on Technology
Market
awareness
How aware is the market of the new technology?
What promotional activity is required in order for
customers and distributors to support the technology?
Observability What is the potential for a “band-wagon effect”?
How easy is it for customers and distributors to see the
technology in action and observe the benefits that is
brings?
Customers Which customers are likely to adopt the technology first?
What approach is most appropriate for a successful
launch of the innovation?
How are existing customers going to be supported in
transferring to the new technology?
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16. What is a “tipping point”?
The point in time at
which some new
technology becomes
mainstream
The point in time at
which some new
technology becomes
mainstream
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17. Tipping points
• With innovation diffusion, demands tends not
to increase steadily
• Often a slow process of adoption
• Then a tipping point – when demand
suddenly takes off (or declines!)
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18. Tablets are past their tipping point?
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19. Tipping point – the amazing growth of Apps
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20. Developing or acquiring
technology
Three main optionsThree main options
In-house
Development
In-house
Development
AlliancesAlliances AcquisitionAcquisition
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21. In-house development
• Favoured if technology is a key competitive
advantage
• Business may have experience of achieving
first-mover advantage
• Requires strong insights into technology and
market needs
• Business must also be willing to take
commercial and financial risks
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22. Perhaps the best example of in-house
development
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23. Alliances
• Appropriate for technologies which are
important, but which do not confer competitive
advantage (e.g. packaging)
• Business may want to “follow & imitate” rather
than be a market innovator
• New technology may be well beyond the skills
and experience of the business
• Helps limit commercial and financial risk
• A good link with “outsourcing”
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24. Technology alliance examples
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25. Technology alliance examples
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26. Acquisition
• Often important if speed is important – i.e. no
time for learning
• May be essential if the technology is complex
or if it is providing competitors with an
advantage
• Acquisitions are high risk – have to be sure
that the right technology is being bought
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27. Technology acquisition - examples
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28. Technology acquisition - examples
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29. Technology acquisition - examples
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