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Ch. 5 Technology and Competition

Ch. 5 Technology and Competition. Process of Technical Change. Technology Environment. Consequences. Innovation Diffusion. Competitive Dynamic Organization. Globalisasi Time Compression Technology Integration. THEORITICAL LINKAGES.

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Ch. 5 Technology and Competition

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  1. Ch. 5Technology and Competition

  2. Process of Technical Change Technology Environment Consequences Innovation Diffusion • Competitive Dynamic • Organization Globalisasi Time Compression Technology Integration THEORITICAL LINKAGES

  3. Competitive domain refer to arenas where multiple firms compete for the hearts and minds of customers. • In many instances, industries constitute the primary competitive domains of technology. COMPETITIVE DOMAIN

  4. TECHNOLOGY Competitive Dynamics Competitive Advantage Value Creation TECHNOLOGY AND COMPETITIVE ADVANTAGE

  5. FOUR clusters of consequences evolve from technological change: • Creation of new product • Change in Value chain • Change in Value constellation • Competitive rivalry COMPETITIVE CONSEQUENCES OF TECHNOLOGICAL CHANGE

  6. New product represent arguably the most visible battleground in the marketplace. • Product improvement (incremental and modular innovations), architectural innovation, radically new product, and technology convergence, are the manifest ways that product competition evolves. 1. CREATION OF NEW PRODUCT

  7. Product Improvements. Product improvement have helped firms extend the market reach of their products. • Architectural innovation. Architectural innovation provide opportunities to serve previously untapped market segments and enable firms to change their competitive position. • Radically New Product. Technological innovation sometimes spawns totally new products. • Technology Convergence. Technology integration leads to convergence. For example, convergence is now taking place in the computer, telecommunications, and entertainment to converge to form an “information industry”. 1. CREATION OF NEW PRODUCT

  8. Technological changes enable firms to reconfigure their value chains, thus influencing the cost and speed of doing business. • We may identify two ways in which value chains are transformed: • Automation, and • Reconfiguration of process. 2. CHANGE IN VALUE CHAIN

  9. Automation refers to the replacement of labor with less expensive capital-intensive technologies. • Automation has been an ongoing phenomenon in developed countries during the twentieth century, with capital-intensive equipment and machinery replacing blue-collar job. (1) Automation

  10. Firm also reconfigure their value chains by introducing superior processes into their operations. • Superior processes may evolve from technology progression or technology evolution. (2) Reconfiguration of process.

  11. The value constellations (IN: tatanannilai) of firms are often upset by technological developments in three ways: • Shifting balance of power, shift the balance of power between firms and their suppliers and distributors. • Potential for outsourcing. As a result of the market forces and the standardization of production processes, firms are discovering opportunities to outsource many activities that had hitherto been conducted in-house. • Different ways of managing value constellation. Better manage their supplier and distributor relationship. 3. CHANGE IN VALUE CONSTELLATION

  12. Product and process innovations are two means by which the competitive game is played and won. • This innovations enable firms • to erect entry barriers to competitors; • to bring about product and process substitution; and • to redefine the rules of competition. 4. COMPETITIVE RIVALRY

  13. Barrier to entry. Misaldenganhak patent, makadapatmenghalangi new entrance untukmemasukiindustri. Contoh lain adalahperusahaan yang bersaingberbasispada know-how yang dihasilkandarikegiatan R&D, makaakanmembatasi new entrance. • Product and process substitution.Contoh: plastiksebagaipengganti plat baja, word processor sebagaipenggantimesinketik, microwave oven sebagaipengganti oven biasa. Jugadiferensiasiproduk: mengasilkan DVD yang menghasilkan play time yang lebihpanjang, gambarlebihtajam, suaralebihjernih, dsb. • Redefine the rules of competition. Contoh: denganmempelajariJepang yang memperkenalkanmesinfotocopyukurankecil, maka Xerox menemukancara lain untukmenjual, salurandistribusi, danbersaing.< 4. COMPETITIVE RIVALRY

  14. Technological characteristics of competitive domains

  15. Six characteristics of competitive domains influence the rivalry: Technological Opportunity Appropriability Resource Requirement Collateral Assets Institutional Milieu Speed

  16. Technological opportunity, refer to the degree to which innovation potential exists in an industry. • Appropriability, refer to the degree to which the potential economic benefits from an innovation can be appropriated by the firms engaged in technology development. Technological Characteristics of COMPETITIVE DOMAIN

  17. Resource requirement. Competitive domains differ in the magnitude of resource commitments required to bring about an innovation. Competitive domains differ in terms of the resources flowing into technology development. Competitive domains differ vastly in terms of their resource requirements and commitments. • Collateral assets, of competitive domains is the need and availability of collateral assets for an innovation to yield a firm competitive advantage. Technological Characteristics of COMPETITIVE DOMAIN

  18. Institutional milieu. In many competitive domains, technology-based rivalry gets enacted not merely in the marketplace but in the institutions that are linked to the technology, as well. Three sets of institutional players: market participants, nonmarket institutions, enabling institution. • Speed. Competitive domains also differ in terms of the speed of execution they demand of competing firms. Speed refers to the velocity of change in a competitive domain that sets the pace of the internal operations of the competing firms. Technological Characteristics of COMPETITIVE DOMAIN

  19. Industry Types and Characteristics of Competitive Domain

  20. DYNAMICS OF CHANGE IN COMPETITIVE DOMAINS

  21. Technology change can create turbulence as well as predictable incremental change in competitive domains: • During certain periods, radical innovations create upheavals within an industry, and the patterns of technology change drive the evolution of competitive domains. • During other periods, we witness predictable evolution of technology when existing characteristics of industries exert a major influence on technology development. • These two periods correspond respectively to the two types of innovation identified by Joseph Schumpeter: entrepreneurial innovation and managerial innovation. DYNAMICS OF CHANGE IN COMPETITIVE DOMAINS

  22. The incremental change phase The Technology Emergence Phase Overturn Stability Appearance of Technological Discontinuity Process Innovation Era of Ferment (bergejolak) Emergence of Dominant Design Incremental Product Innovation EVOLUTION OF COMPETITIVE DOMAINS

  23. Technical Economic Activities Applied R&D Testing Manufacturing Marketing & Distribution Resource Endowments Basic Science Finance Competent Labor Institutional Arrangement Legitimation Regulation Standards FRAMEWORK OF TECHNOLOGY EMERGENCE ANALYSIS

  24. The scope of competition is increasingly global: • Competitors from all over the world can potentially compete on many technological battlegrounds. • Technological competition is not confined to markets but extends to the institution milieu; institutions in different parts of the world follow different practices, regulations, and approaches. Knowing each one of them is a formidable task. • On the positive side, globalization has provided opportunities for rapidly acquiring collateral assets, because the number of possible alliances has increased considerably. GLOBALIZATION

  25. Membutuhkanrespon yang cepatdalampersainganantarperusahaan. TIME COMPRESSION

  26. Perusahaan kecildapatbergabungdengan yang lebihbesaruntukmelengkapi value chain. TECHNOLOGY INTEGRATION

  27. Competitive Strategy • Investment in Innovation • Learning • Internal Operation. MANAGERIAL IMPLICATION

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