Technology and innovation are important factors for business competitiveness and future development. Firms must assess their innovative capabilities by evaluating how innovative their products/services and production systems have been, how well their innovation capabilities fit their business strategies, and what innovation capabilities are needed to support long-term strategies. Five factors influence business innovation strategies: resources for innovation, understanding competitors' strategies, understanding relevant technologies, organizational culture supporting entrepreneurship, and strategic management of innovation initiatives. Integrating technology and strategy is dynamic and requires understanding how technologies affect a firm's value chain and competitive advantage.

1. The rol end importance of technology and innovation in entreprizes
Currently the technology and innovation is a relevant factor in both the business world, and
in the research field, it has a greater importance when it is associated with variables such as
competitiveness and the impact is greater because the trend of the variable of technological
innovation makes in the future of business development is perceived. Tuday the firms differ
because they develop competencies in different technologies. Asymmetries in knowledge
endowments may provide a basis for technological heterogeneity. On the other hand firms may
also differ in the way they exploit or deploy the available / acquired technology.
For innovative capabilities and construct a development plan for the future all the firms
must address at least three questions:
1. How has the firm been innovative in the arias of product and service offerings
and/or production and delivery sistems ?
2. How good is the fit between the firm’s current business and corporate strategies
and its innovative capabilities ?
3. What are the firm’s needs in terms of innovative capabilities to support its long-
term business and corporate competitive strategies ?
This questions can have positive answers if enterprise have innovative capabilities who, can be
defined as the comprehensive set of characteristics of an organization that facilitate and support
innovation strategies.
Five important categories of variables influence the innovation strategies of a business:
 Resources available for innovative activity;
 Capacity to understand competitors’ strategies and industry evolution with respect to
innovation;
 Capacity to understand technological developments relevant to the business unit;
 Structural and cultural context of the buisness unit affecting internal entrepreneurial
behavior;
 Strategic management capacity to deal with internal entrepreneurial initiatives.

2. EXHIBIT 1 Innovative Capabilities Audit Framwork- Buisness Unit Level 1
The first three categories listed above are important inputs for the formulation of business unit
innovation strategies; the final two, for the implementation of business unit innovation strategies.
Technological change is one of the most important forces affecting a firm’s competitive
position, and research suggests that firms find it difficult to respond to such changes. Integrating
technology and strategy should therefore be a dynamic process, and it requires that the firm
understand the dynamics of the life cycle of the various technologies is employs. In the broadest
sense, the term technology encompasses the entire set of technologies employed in the sequence
of activies that constitute a firm’s value chain1. Exhibit 3 shows an example of various
technologies can affect in firm’s value chain.
Fig3. Representative Technologies in a Firm’s Value Chain
Transportation technology
Material handling
technology
Storage and preservation
technology
Basic product
technology
Materials
technology
Machine tool
technology
Transportation
technology
Material handling
technology
Packaging
technology
Media technology
Audio and video
recording
technology
Communication
system technology
Diagnostic and
testing
technology
Communication
system
technology
1 Robert A. Burgelman, Modesto A. Maidique, Strategic Management of Technology and Innovation, NY, 2001
Business
unit
innovative
strategy
Resource
availability
Understanding
business unit
technological
environment
Business unit
strategic
management
capacity
Understanding
competitors’
innovative
strategies and
industry
evolution
Business unit
structural and
cultural
context

3. Communication system
technology
Testing technology
Information system
technology
Material handling
technology
Packaging
technology
Maintenance
methods
Testing technology
Building design
operation
technology
Information system
technology
Communication
system technology
Information
system technology
Information
system technology
Information
system
technology
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Any of these technologies can affect the industry structure or a firm’s differentiation or
cost position – and, therefore, its competitive advantage. Hence, it is important for the general
manager to track the evolution of all the technologies that affect the firm’s value activities.
Designing a technology strategy requires that the firm decide how each technology can be used
for competitive advantage, and wheather a given technology should be developed in-house or
procured.
Also, technology and, particular, software have experienced positive trends that relate to
business and business processes. These include the following:
 Improved price performance and reliability. You have heard about this for years. However
the changes are now more integrated, occur faster, and have a greater impacton society and
individuals. Look at the sharp rise in tools that use the Internet for voice communications
and faxing;
 Greater standardization. With the earlier dominance of several hardware firms and now
with several software firms (one in particular), thereis much more standardization that was
previously the case. What does standardization mean? It means that you can more easily
implement systems and have less maintenance later;
 Integration and easier interfaces. This relates to standards in that the rise of ODBC, OLE,
and ActiveX have all suported simpler interfaces and integration among systems. Without
this there would be need for much more custom programming and development to establish
and support interfaces;
 Reduced learning curve for professionals to come up to speed. Yes, current tools require
learning time.

4. As mentioned above, innovation results in smarter apps, improved data storage, faster
processing, and wider information distribution. Innovation makes businesses run more efficiently.
And innovation increases value, enhances quality, and boosts productivity. Inside the enterprise
this process takes place as it is represented in EXIBIT 4 .
EXIBIT 4 The chain of changes in an enterprise through technologies
Technology
Strategy
Organizational
Factors
Technological
Innovation
Performance
Government
policies
Rules &
Regulations
Operational Business
Business Strategy
(Gap Analysis)