This document discusses strategic issues in managing technology and innovation. It begins by providing examples of innovation-focused mission statements from Gillette and Intel. It then discusses the role of management in innovation, new product development, and ensuring technology benefits consumers. Environmental scanning of external and internal factors is also important. The document also covers the impact of stakeholders on innovation, resource allocation for R&D, technology sourcing strategies, developing an entrepreneurial culture, and best practices for improving R&D functions.

1. Chapter – VII(b)
Strategic Issues in Managing
Technology and Innovation
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2. Examples of innovative emphasis on
Mission Statements
Gillette: “ We will invest in and master the key
technologies vital to category success.”
Intel: “To succeed we must maintain our
innovative environment. We strive to
embrace change, challenge the status quo,
listen to all ideas and viewpoints, encourage
and reward informed risk taking, and learn
from our success and mistakes.”
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3.  Role of Management:
Innovation
Management of technology
Encourage new product development
 33 - 60 percent of new products fail to make a profit
Ensure that technology is being used most effectively
with the consumer in mind.
 Environmental Scanning:
External Scanning:
 New developments in technology
Strategic Issues in Managing
Technology and Innovation
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4.  Impact of Stakeholders on Innovation:
Lead Users
 Lay the foundation
 Determine the trends
 Identify lead users
 Develop the breakthrough
Market research
New product experimentation
Strategic Issues in Managing
Technology and Innovation
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5.  Internal Scanning:
Has the company developed the resources needed to
try new ideas?
Do the managers allow experimentation with new
products or services?
Does the corporation encourage risk taking and
tolerate mistakes?
Are people more concerned with new ideas or with
defending their turf?
Is it easy to form autonomous project teams?
Strategic Issues in Managing
Technology and Innovation
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6.  Resource Allocation Issues:
 R&D Intensity
 Spending on R&D as a percentage of sales revenue
 Principle means of gaining market share
 Time to Deal with Market Issues:
 Time from inception to profitability
 Cycle is short — 4 years
 Strategy Formulation:
 R&D Strategy:
 Leader or follower in terms of technology and market
entry
 Source of technology
 Develop
 Purchase
 Product vs. Process R&D:
 Product innovations
 Process innovations
Strategic Issues in Managing
Technology and Innovation
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7. Product and Process R&D in Innovation Life
Cycle
Time
Cash
Flow
Innovation Cycle Time
ProfitOpportunity
Occurs
Project
Activity
Begins
Opportunity
Is Perceived
Breakeven
Time
First
Customers
Are Satisfied
Project
Becomes
Extinct
Product
Definition
and Plans
solidify
Product Is
Released to
Production
(Mostly
Product
R&D)
(Mostly
Process
R&D)
Positive
Cash
Flow
Negative
Cash
Flow
Net
Perio
d
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8.  Technology Sourcing:
Make or buy decision
Strategic alliances
Outsourcing Technology:
– Technology is of low significance to competitive
advantage
– Supplier has proprietary technology
– Supplier’s technology better/cheaper—easy to
integrate
– Strategy not based on development and
manufacturing
– Technology development process requires special
expertise
– Technology development process requires new
resources
Strategic Issues in Managing
Technology and Innovation
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9.  Technological Competence:
Absorptive capacity
 A firm’s ability to value, assimilate, and utilize
new external knowledge.
 Product Portfolio:
Product/market evolution matrix
 Competitive positions
 Stages of product/market evolution
Strategic Issues in Managing
Technology and Innovation
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10. Product Portfolio (Contd…)
Hofer’s Product- Market Evolution Matrix
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11. Contd…
In the figure, circles represent the sizes of the
industries involved and the pie wedges represent the
market shares of the businesses involved.
For example, firm B has not been successful in
securing a higher share of the market in spite of
having a strong competitive position.
The most important contribution of this matrix is
that firms with different stages of product can have
opportunities for selecting certain strategic options in
different competitive positions.
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12.  Innovative, Entrepreneurial Culture:
Positive attitude toward change
Decentralized decision making
Complexity
Informal structure
Interconnectedness
Organizational flexibility
Large size
System openness
Strategic Issues in Managing
Technology and Innovation
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13. Stages of New Product Development
 Idea generation
 Concept evaluation
 Preliminary design
 Prototype build and test
 Final design and pilot production
 New business development
Strategic Issues in Managing
Technology and Innovation
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14. Entrepreneurial Roles:
Product champion
Sponsor
Orchestrator
Strategic Issues in Managing
Technology and Innovation
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15. Entrepreneurial Roles:
 Product Champion
 Generates new idea and supports it through many
organizational obstacles.
 Sponsor
 One who recognizes the value of the idea, helps obtain
funding, facilitates implementation.
 Orchestrator
 Top management who desires the need for innovation,
provides funding for innovating activities, creates
incentives for middle management, protects
idea/product champion from other executives.
Strategic Issues in Managing
Technology and Innovation
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16. Corporate entrepreneurship:
 “Intrapreneurship”
 Internal innovation or venturing
 Transformation of organizations
 Strategic renewal
Strategic Issues in Managing
Technology and Innovation
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17. Strategic Issues in Managing
Technology and Innovation
13 Best Practices for Improving R&D:
1. Strategies are well defined and clearly
communicated
2. Core technologies are defined and
communicated to R&D
3. Investment in developing multinational R&D
capabilities
4. Funding for basic research with long-term focus
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18. Strategic Issues in Managing
Technology and Innovation
13 Best Practices for Improving R&D(contd…)
5. Centralized basic and applied research facilities
6. Formal, cross-functional teams
7. Mechanisms for regular interaction among
scientists and R&D and other functions
8. Analytical tools used for selecting projects
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19. Strategic Issues in Managing
Technology and Innovation
13 Best Practices for Improving R&D(contd…)
9. Technology transfer to business units
10. Career development at all levels in R&D
11. Effective and diverse recruitment
12. Internal development and third-party
relationships
13. Mechanisms are used for monitoring external
technological developments
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20. Thank You
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