Lecture 09 Challenges of Technology Management - Tagged

LB5124
BUSINESS INNOVATION &

TECHNOLOGY MANAGEMENT
Lecture 9
Challenges of Technology Management
LB5207 Managing Entrepreneurial Enterprises

Objectives of Lecture 9
• What are the determinants of success in

innovation?
• What are the limitations of using innovation
models?
• What is the technical potency of the new
innovation?
• How will the technology influence the market?
• How will the technology impact the firm?
• What are the business dynamics of an
innovation?
Determinants of Success in Innovation
• Technology must offer value to its customers;
• Technologies are part of a system, which must be

managed;
• The criteria customers use to evaluate an innovation may

be multidimensional and vary with time;
• Successful new products depend as much on standards

and infrastructure, as they do on performance;
• A radically new technology requires a new business

organization for success.
Limitations of Innovation Models
• Stage models: innovation is treated as a sequential

linear activity;
• Conversion models: innovation is described as a

conversion process, with inputs converted into products
and services;
• Integrative models: process and product innovation are

integrated to a technology life cycle;
• Decision models: innovation is viewed in terms of

decisions taken in the process.
Limitations of Innovation Models
• Most models overlook the complexity of the pre-

innovation stage;
• All models fail to include the dimension of time;
• Environmental considerations are generally

excluded;
• Strategic alliances are hardly considered;
• All models fail to recognize the cumulative and

somewhat chaotic nature of innovation.

Class Exercise 1
Read the article ‘BlaBlaCar: Value creation on a digital
platform’
Technical Potency of an Innovation
Limiting Technical Constraints:
• Identify the physical constraints underlying the

previous technologies;
• Assess the significance of removing those

constraints with the new technology;
• Example: old aircraft with piston engines had a

compression ratio, compared to those currently
using a turbine, which have no compression
ratio.
New Technical Constraints:
• What fundamental constraints limit the

effectiveness of the new innovation?
• Example: old aircraft with propellers had a

higher ‘wake’ efficiency (improves propulsion)
than one using a turbine - a new constraint.

Technical Balance:
• Compare, limiting technical constraints of

existing technologies, with new constraints
arising from the innovative technology;
• Make a qualitative assessment on how

favourable is the relief of the former, weighed
against the stringencies of the latter.

Innovation in Context
Enhancement of End Product:
• What are the changes to be made to a product, if

the innovation is to be used in it?
• Example: the introduction of a technology such

as the transistor, did not change the frequency
section of the radio, but made the power supply
on which it depended on, more stable.

Enhancement of Innovation:
• What is the effect on the innovation itself, of the

changes required for its use in the product?
• The embodiment of the product itself,

surrounding the new innovation, must enhance
and not dilute the innovation.

New Innovation Opportunities:
• Does the additional embodiment of the product

offer opportunity for further innovative
enhancement?
• On balance, does the new innovation increase or

decrease the acceptability of the product into
which it is incorporated?

Business in Context
New Business Opportunities:
• Assess the nature and cost of new business

operations, required by adoption of the new
technology.
• Example: innovations in consumer electronics

by Japanese producers in the 1960s and 1970s,
involved a simultaneous innovation in
distribution and retail marketing.
Business in Context
Displaced Business from Innovation:
• Assess the potential changes in the existing

business that will be brought about by the
innovation.
• Example: the entry of the transistor in

electronics, and its impact on the dealer service
network.

Business in Context
Favourability of Innovation on Business:
• How favourable is cessation of the former

practices, against provision of new business
practices, as a result of the innovation?
• Make a qualitative business balance

assessment or analysis of the new innovation.

Market Dynamics
Enhanced Effectiveness to User:
• Does the product incorporating the new

technology, enhance effectiveness in the
marketplace serving the end user?
• There may be no economic payback from

market expansion - a question of demand.

Market Dynamics
Impact on Cost:
• Does the innovation reduce the cost of

delivering the product or service?
• This concerns supply. How then would the firm

deal with the innovation, if it concerns questions
of supply and/or demand?

Market Dynamics
Characteristics of Markets:
• Does latent demand expansion, or price

elasticity expansion, determine the
characteristics of new markets?
• Generally, change in a market is driven by a

dramatic change in the new product’s
effectiveness, compared to other ‘similar’
products.
Market Dynamics
Return on Investments:
• Evaluations of an innovation must not be based

on assumptions of return on investments;
• The innovation should be evaluated on its new

inventive concept, in a beneficial embodiment in
either a product or service, which will enhance
its value in a major latent market, at a reduced
operational cost.
Read the article ‘CompSupport: A series of unfortunate
events
Technical Potency of an Innovation:

• What are the limiting and new technical constraints
CompSupport?
Innovation in Context:
• Evaluate the ‘product and market’ fit for CompSupport. Is it
appropriate?
Business in Context
• Trace the evolution of CompSupport’s business strategy and
identify the benefits to customers/partners.
• With each change, how did CompSupport’s actions continue
to match the strategy?
• Evaluate CompSupport’s revenue model and their financial
standing.
Market Dynamics
• How would you classify CompSupport’s offering?
(service/product/solution) Do you thinkCompSupport would
have been more successful as a software company?
• Which alternative should Thomas and McLeod choose?

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LB5124

BUSINESS INNOVATION &

LB5207 Managing Entrepreneurial Enterprises

• What are the determinants of success in

• Technology must offer value to its customers;

• Technologies are part of a system, which must be

• The criteria customers use to evaluate an innovation may

• Successful new products depend as much on standards

• A radically new technology requires a new business

• Stage models: innovation is treated as a sequential

• Conversion models: innovation is described as a

• Integrative models: process and product innovation are

• Decision models: innovation is viewed in terms of

• Most models overlook the complexity of the pre-

• All models fail to include the dimension of time;

• Environmental considerations are generally

• Strategic alliances are hardly considered;

• All models fail to recognize the cumulative and

somewhat chaotic nature of innovation.

Limiting Technical Constraints:

• Identify the physical constraints underlying the

• Assess the significance of removing those

• Example: old aircraft with piston engines had a

New Technical Constraints:

• What fundamental constraints limit the

• Example: old aircraft with propellers had a

LB5207 Managing Entrepreneurial Enterprises

• Compare, limiting technical constraints of

• Make a qualitative assessment on how

LB5207 Managing Entrepreneurial Enterprises

Enhancement of End Product:

• What are the changes to be made to a product, if

• Example: the introduction of a technology such

LB5207 Managing Entrepreneurial Enterprises

• What is the effect on the innovation itself, of the

• The embodiment of the product itself,

LB5207 Managing Entrepreneurial Enterprises

New Innovation Opportunities:

• Does the additional embodiment of the product

• On balance, does the new innovation increase or

LB5207 Managing Entrepreneurial Enterprises

New Business Opportunities:

• Assess the nature and cost of new business

• Example: innovations in consumer electronics

Displaced Business from Innovation:

• Assess the potential changes in the existing

• Example: the entry of the transistor in

LB5207 Managing Entrepreneurial Enterprises

Favourability of Innovation on Business:

• How favourable is cessation of the former

• Make a qualitative business balance

LB5207 Managing Entrepreneurial Enterprises

Enhanced Effectiveness to User:

• Does the product incorporating the new

• There may be no economic payback from

LB5207 Managing Entrepreneurial Enterprises

• Does the innovation reduce the cost of

• This concerns supply. How then would the firm

LB5207 Managing Entrepreneurial Enterprises

• Does latent demand expansion, or price

• Generally, change in a market is driven by a

• Evaluations of an innovation must not be based

• The innovation should be evaluated on its new