Arab Open University - Faculty of Business Studies
B222 A: Technology and Innovation Management II
Mid-Term Assessment (MTA)
Spring 2013-2014
Time Allowed: 2 hours
INSTRUCTIONS TO STUDENTS:
- This examination consists of FIVE (5) questions, attempt FOURquestion
- The marks for each part of the question are next to the question.
- Students must not begin writing before the invigilator announces the start of the examination.
- No mobile phones or electronic data devices are allowed into the exam room.
- Any form of cheating should not be tolerated, and should be subject to AOU cheating policy.
- Keep ALL your belongings (bags, mobiles, etc.) in the specified space in the exam room.
- Your ID card should be displayed on the desk for invigilators to see.
- It is absolutely prohibited to exchange or borrow such objects from anyone during the exam.
- The final exam is worth 30% of total course assessment
- PLEASE WRITE IN BLACK OR BLUE INK.
- Do not remove this questions paper from the examination room unless the invigilator has given you the permission to do so.
- The questions you have chosen to answer must be indicated clearly in the answer book.
- At the end of the examination, candidates must remain seated until the invigilators have collected and checked all the answer books.
Question 1: 25 marks
- Define Technology Management stating the associated challenges and listing the six activities related to TM.
- Explain why technological capabilities are considered a subset of dynamic capabilities.
- What in your opinion what differs technological innovation from innovation?
Possible answer
a-Technology management (TM) is the processes of planning, directing, controlling and coordinating the development and implementation of technological capabilities that help the firm accomplish its strategic and operational objectives.
Challenges: The challenges associated to technology management are: increasing cost, complexity and pace of technology advancement, diversity of technology sources, the globalization of competition and alliances. Activities related to TM: Acquisition, exploitation, Identification, Learning, Protection, and Selection.
b- Technological capabilities are considered dynamic because of their ability to reconfigure, redirect, transform and integrate existing core competencies with complementary assets to meet the challenge of a rapidly changing world of competition and imitation.
c-Innovation can arise from different sources, like individuals, firms, universities…, it’s about making something new and not limited to technology. However technological innovation refers to practical and technical knowledge and skills used to develop products/services/processes of production.
Question 2: 25 marks
- The different forms of external collaboration between firms depend on two main dimensions, elaborate on each dimension
- List and explain the five forms of external acquisitions stating the advantages, disadvantages and challenges of each form.
Possible answers
- Sourcing technology externally demands relationships with other organizarions and managers. There are five forms of collaboration, depending on two dimensions: degree of control that the firm wishes to have over the innovation and duration of commitment with the other firm.
- Purchasing/arm’s length transactions(3 marks)
This form necessitates the least degree of collaboration between firms among all five forms of collaborations. Purchasing act is a one-time event and does not require a close relationship. However continuous purchasing from a technology supplier might result in a relationship development. In a purchase, a company buys the new technology and in some cases the supplier/vendor may initiate the transaction.
- Contracted-out R&D(3 marks)
It is the case where the company uses the services of a research organization or consultants/experts/researchers/universities to develop a new process or product, through a contract. This form of collaboration is suitable when the company has a low standing in technological area.
- Licensing (3 marks)
Licensing is the conventional situation where a company holds a license for the use of a product design, a process or a marketing package. The company looks at what is available, decides to buy and then negotiate the price. Licensing initiates a long-term relationship between licensor and licensee company equivalent to license duration. The major advantage is to speed the technology adoption and reduce the risk and cost of developing the technology.
- Alliances (3 marks)
Several types of alliances are possible, from ad-hoc partnerships to complex alliances and joint-ventures, to complete acquisitions. Ad-hoc alliances are flexible. They are formed to solve specific critical problems for two or more businesses. Complex alliances and joint-ventures are especially helpful when two or more businesses of different sectors to pool their resources to gain access to a technology in which they are weak. (i.e: iPod music player was not developed in-house. Apple used a Toshiba disk-drive, placed iPod software on a platform developed by Portal-player, and the music management software by Pixo.)
- M&A – Merge and Acquisition (3 marks)
Acquisition of a company is the most certain and fast way of securing a technology and preventing others from acquiring it. The goal is to acquire and integrate external entity into the existing company. It is a way of transferring external critical capabilities and resources into the firm to support its internal core competencies. Challenges: organizational culture clashes and managerial problems that may result in the failure of the merger.
Question 3: 25 marks
Internal development of technologies (internal R&D) capability) is an in-house series of activities.
a)What are the three main processes within the R&D context? (3 marks)
b)Elaborate on each of them. (22 marks)
Possible answers
- R&D portfolio management (1 mark)
- New product/service development(1 mark)
- New process development(1 mark)
R&D portfolio management:(8 marks)
In the finance domain, the portfolio concerns the set of assets to purchase, the investments to make…Similar thinking applies to R&D portfolio although the type of assets differ. The main challenge of R&D portfolio management:
-the uncertainty and the complexity of a multiproject decision model
-changing information about technology
-the existence of dynamic opportunities
-high interdependence among projects
-multiple decision makers from different management units
New product/service development:(7 marks)
‘New product development’ is the process of bringing a new product or service to the market. Some products are completely new to the market and to the company. Some products may be new to a particular market but not to the company, these are called ‘repositioned products’. Some products are neither new to the market nor to the company; product’ changes in this case are called ‘incremental’.
The phases of a new product development are known as development funnel or idea-project funnel. Two parallel paths are involved in this process: the first is the idea generation/product design/production and development, the second is market research and marketing analysis. R&D activities are most integrated with creativity and commercialization.
New product development should also take into consideration product family. A product family consists of products that have similar features, with a shared technology basis. The variety of products can be derived from the basic product family. This creates the opportunity to reuse and differentiate products in the family.
New process development:(7 marks)
Certain product strategies may necessitate a corresponding process technology. Products and processes evolve together depending on the life cycle stages as well as the product variety and volume. For this, the product/process matrix is used to facilitate the strategic options available to a company depending on two dimensions: the structure of the process used for the production and the variety and volume of the product.
New process development can range from incremental to radical process change. This is why any design of a new process should take into consideration: understanding existing processes (their structure, flow, performance), identifying the elements to change in order to meet the innovation, designing the new process, implementing it, adjust it according to results. This model is called business process re-engineering.
Question 4: 25 marks
Some customers are more open to new products than others.
a)Explain the importance to understand the adopters’ types and elaborate on how the innovation curve relates to targeting in technology marketing. (20 marks)
b) Draw an illustration of the innovation adoption curve. (5 marks)
Possible answers
Targeting is about finding the right customers and learning their characteristics in order to decide which segments of the market to decide on for marketing the product. For this it is very important to understand the adopters types.
Some customers are more open to new products than others. The adopters types are the following:
-Innovators: lead the change and are important for communicating the benefits of a new innovation to other adopters.
-Early adapters: are willing to try out new ideas.
-Early majority adopters: are willing to accept change more quickly than the average.
-Late majority adopters: will only use new ideas after the majority has tried them.
-Laggards: they are critical of new ideas and don’t adopt them unless they become common in use.
Based on this, it is more logical to convince innovators and early adopters of a new technology rather than other segments of the adopters market. Trying to convince the mass market will be a waste of time and money. (20 marks)
(5 marks)
Question 5: 25 marks
Technology auditing and forecasting aretwo important processes of technology identification.
- Elaborate on technology auditing and explain the criteria’s of technologies assessment and ranking.
Possible answers
a-Auditing should be a detailed evaluation of the available in-house technologies and their status. The main objectives of this technology auditing process are identifying and evaluating the firm’s technological resources and capabilities as well as assessing and ranking technologies. The process works as follows: after the technologies have been identified and listed, they are assessed and ranked on the basis of different criterias: categories of technologies, maturity of technologies, competitive position, location in the supply chain, levels of competencies, and finally impact of technologies. The technologies are then listed according to their importance for the company and their link with particular products and markets.A good way to classify technologies is according to their competitive potential:
-Base/enabling technologies.
-Critical/key technologies.
-Pacing technologies.
-Emerging technologies.
(13 marks)