Date post: | 25-Dec-2015 |
Category: |
Documents |
Upload: | madison-paul |
View: | 216 times |
Download: | 0 times |
© Sakari Luukkainen
TMitTI 1
T-109.5410 Technology Management in the Telecommunications Industry (3 cr)
© Sakari Luukkainen
TMitTI 2
Background of the course
• R&D investments in Finland are 5 billion € of which is privately financed 72 %, major R&D performed by telecommunications industry
• Telecom company´s cost structure is dominated by the R&D cost, which is biggest fixed cost
• Majority of those fixed costs are sunk costs which can not be easily recovered if technology commercialization fails
© Sakari Luukkainen
TMitTI 3
Growth by industrial sector
Source: Stat Finland
0
1 000 000
2 000 000
3 000 000
4 000 000
5 000 000
6 000 000
7 000 000
8 000 000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Pro
du
ctio
n
Electronics
Paper
© Sakari Luukkainen
TMitTI 4
• Current slowdown - the development moves two steps forward and one step backward
• Media catalysts overestimated expectations in growth phase, and panic in decline phase
• Asymmetric information in the technology financing market
• High 3G license costs delay development
• Most of the success is related to GSM technologies, hyper price competition in mobile voice and SMS
• No history data of business – difficult to forecast, unreliable market research
Background of the course
© Sakari Luukkainen
TMitTI 5
Background of the course
• VC financing has so far resulted in a very few new success stories
• Only 20 % of R&D performed by companies can be exploited commercially
• The role of liquidity constraints is negligible in determining R&D investment – steady R&D spending
• Market uncertainty is however high - many technical possibilities open up with unclear market need - many failures and unexpected success
• Incumbent companies often lose their competitive position in discontinuous technological change
© Sakari Luukkainen
TMitTI 6
Goal of the course
• To describe technology management as a part of the business process of a telecommunications company
• The course handles the structure of the telecommunications industry and its innovation characteristics, technology choices, R & D financing, standardization and product strategy
© Sakari Luukkainen
TMitTI 7
Graduating the course
• The course is especially designed to students taking Telecommunications Management / Networking Business for their major or minor, but is suitable for all students that are interested in techno-economic issues related to telecommunications
• The preferred but not compulsory prerequisite for this course is TU-91.2005 Strategic Management of Technology and Innovation, it can be graduated e.g. parallel during this course
• Replaces courses T-109.410, T-111.050 and TU-91.126
© Sakari Luukkainen
TMitTI 8
Graduating the course
• 9 lectures, 2 industry speakers, on Tuesdays hall T3, at 10.15-12
• Exam requirements consist of the lectures and the following books:
Carl Shapiro, Hal R. Varian, Information Rules, A Strategic Guide to the Network Economy, 1999Michael E. McGrath: Product Strategy for High Technology Companies, 2001
• Following books will also be touched in the lectures:
Mäenpää, K., Luukkainen, S.: From Telecommunications Technology to Multimedia Communications: The Competitiveness of the Telecommunications Cluster, 1994 Luukkainen, S: The Effect of the Developmental Dynamics of the Line of Business on the International Competitiveness of the Telecommunications Industry, 1996 Gawer, A., Cusumano, M.: Platform Leadership: How Intel, Microsoft, and Cisco Drive Industry Innovation, 2002 Christensen, C.: Seeing What's Next: Using the Theories of Innovation to Predict Industry Change, 2004 Afuah, A.: Innovation Management: Strategies, Implementation and Profits, 2003 Palmberg, C., Martikainen, O.: Overcoming a Technological Discontinuity - The Case of the Finnish Telecom Industry and the GSM, 2003
© Sakari Luukkainen
TMitTI 9
Graduating the course
• First examination is 17.12.2006 at 9 - 12 in lecture hall T1 and the enrollment to the exam will be done via Topi, 4 exams / year
• Exam consists of three essay questions of which two is compulsory, six concept definitions and one applied question concerning some real life business case
© Sakari Luukkainen
TMitTI 10Telecom Management / Networking Business
Telecommunications(Application area,research target)
IndustrialManagement (Theory)
Internet & Multimedia(Application area,research target)
© Sakari Luukkainen
TMitTI 11
TU-91.2005 Strategic Management of Technology and Innovation 5
S-38.3001 Telecommunications Forum 1-5
S-38.3041 Operaattoriliiketoiminta 3-5
T-109.7510 Research Seminar on Telecommunications Business 5
T-124.5100 Verkottuneet liiketoimintaprosessit ja –mallit 4
Related courses
© Sakari Luukkainen
TMitTI 12
Master’s Thesis Scope
Emerging technology / Product strategy analysis
New telecom service design
Integration of ICT & business processes
© Sakari Luukkainen
TMitTI 13
Product Management Organization
Vice President, Sales and Marketing
MarketingServices
Advertising MarketingResearch
ProductManagement
Sales
ProductManager
ProductManager
AccountManager
AccountManager
© Sakari Luukkainen
TMitTI 14Product management is business process management
Product Manager
R&D
TopManagement
Sales
FinancePurchasing
Production
Customers Legal
Marketing
© Sakari Luukkainen
TMitTI 15Business Assessment: Hierarchy of Strategies
VisionCorporate StrategyDivisional StrategyProduct/Market StrategyMarketing TacticsCustomer Satisfaction
Source: Gorchels
Focus ondeveloping andleveraging corecompetencies
Focus oncustomer-specific needs
© Sakari Luukkainen
TMitTI 16PM´s balance of management activities
strategicstrategic
the goal the reality
short-term
day-to-day
short-term
day-to-day
Source: Gorchels
© Sakari Luukkainen
TMitTI 17
Characteristics of Innovation
• New or improved product, service or process from market point of view, which contains new technological solutions and has been commercially successfully introduced to the market
• Radical, disruptive, sustained, incremental, architectural, service and process innovations
• Innovator gets competitive advantage through timing advance and IPR protection by patents – short monopoly
• Monopoly will loosen through trade of patents and licenses or knowledge spillovers when competitors copy the technology and proprietary technology gets common to all players in the industry
© Sakari Luukkainen
TMitTI 18
Science base
Generictechnologies
Proprietarytechnologies
R&Dinvestment
Technology push
Market appeal
Product innovation
Service innovation
Process innovation
X.400, ISDN, WAP, ERMES, ATM, UMTS?
GSM, Internet, fax, I-mode, Ethernet, IN, ADSL, CATV data
Innovation process
© Sakari Luukkainen
TMitTI 19
Discontinuous technology
Incremental change
Discontinuous change
Mag
nitu
de o
f C
hang
e
Time
Impr
ovem
ent t
rajec
tory
of in
cum
bent
s
Source Tushman, 1997
© Sakari Luukkainen
TMitTI 20
Era ofIncrementalChange
Era ofFerment
TechnologicalDiscontinuity
DominantDesign
Variation
Selection
TechnologicalSubstitution
Retention
Era ofIncrementalChange
Era ofFerment
TechnologicalDiscontinuity
DominantDesign
Variation
Selection
Retention
Era ofIncrementalChange
Era ofFerment
TechnologicalDiscontinuity
DominantDesign
Variation
Selection
TechnologicalSubstitution
Retention
Era ofIncrementalChange
Era ofFerment
TechnologicalDiscontinuity
DominantDesign
Variation
Selection
Retention
Technology cycle
Source Tushman, 1997
© Sakari Luukkainen
TMitTI 21
Disruptive technology
Per
form
ance
Time
Improve
ment trajecto
ry of in
cubents
Disruptive technology
Source Christensen, 1997
© Sakari Luukkainen
TMitTI 22
Technology Management
• Technology is a resource that is as pervasively important in the organization as are financial and human resources
• The deployment of technology in the firm´s product-market strategy strategy to position itself in terms of differentiation and cost, and gain technology-based competitive advantage
• The firm´s resource commitment to various areas of technology
• The firm´s use of organization design and management techniques to manage the technology function
• Vieving technology as a functional capability implies the need to develop a technology strategy
© Sakari Luukkainen
TMitTI 23
Technology Strategy
Interrelated decisions related to
• Technology choice
• Technology sourcing
• Level of technology competence
• Level of funding for R&D
• Organization for R&D
• Timing
• Technology introduction in new products/services
• Marketing of products/services
© Sakari Luukkainen
TMitTI 24
Technological change
Market change
Standardization Productization MarketingR&D
TechnologyAssessmentand Forecasting
MarketAssessmentand Forecasting
Innovation process
© Sakari Luukkainen
TMitTI 25
Technology strategy process in firms
Autonomous strategic
action
Induced strategic
action
Emergingcontext
Existing context
Concept of corporate strategy
© Sakari Luukkainen
TMitTI 26
Technology strategy enactment in firms
Induced- applied research on new technologies opportunities and
threats to support existing businesses- standardization, alliances- product development- joint ventures- acquisitions
Autonomous- science-based research- internal corporate venturing- external corporate venturing: VC, venturing alliances
and if they fail the last change is followership by copying / contracting / licensing without timing and cost advantage
© Sakari Luukkainen
TMitTI 27
Timetable
25.9. Introduction, Sakari Luukkainen2.10. R&D Management, Sakari Luukkainen 9.10. Standardization Strategy, Sakari Luukkainen16.10. Product Strategy, Sakari Luukkainen 30.10. Market Dynamics of Telecom Industry, Sakari Luukkainen6.11. Cases ERMES and GSM, Sakari Luukkainen13.11. Cases DOCSIS and ADSL, Sakari Luukkainen20.11. Technology Management in Nokia Siemens Networks, Ossi Pöllänen27.11 Technology Management in Ericsson, Visa Friström
17.12. Examination