3m Innovation Way

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Innovation Management and New Product Development

New Product Management

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Innovation, Technology and Strategy

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Contents
1. Technology and Strategy (Part I - Intro) 2. Technology and Corporate Planning (Reading I-2) 3. Management Criteria for Effective Innovation (Reading I-4) 4. Core Competence (Reading I-3)

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Technology and Strategy
Porter’s 5-forces model

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Technology and Strategy
Porter’s “generic strategies” concept is a widely used framework for classifying competitive strategies. The generic strategies are: Industrywide differentiation Focused differentiation Industrywide cost leadership Focused cost leadership

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Technology and Strategy
Generic strategy Overall cost leadership Technological policies Product technological change Product development to reduce product cost by lowering materials content, facilitating ease of manufacture, simplifying logistical requirements, etc. Learning curve process improvement Process development to enhance economies of scale Product development to enhance product quality, features, deliverability, or switching costs Product development to design only enough performance for the segment's needs Product design to meet exactly the needs of the particular business segment application Overall differentiation Focus-segment cost leadership Focus-segment differentiation

Process technological change

Process development to support high tolerances, greater quality control, more reliable scheduling, faster response time to orders, and other dimensions that improve the ability to perform

Process development to tune production and delivery system to segment needs in order to lower cost

Process development to tune the production and delivery system to segment need in order to improve performance

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Technology and Strategy
Technology and Product-Market Strategy A firm’s strategy is expressed in the products and services it brings to market. One way to get at the integration of a firm’s technology and productmarket strategy is: Decompose each product or service into its constituting technologies and assess the relative strength—the degree of distinctive competence— the firm has with respect to that technology

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Technology and Strategy
Technology Portfolio Harris, Shaw, and Somers suggest: Once various technologies have been identified, they can be classified in terms of their importance for competitive advantage Next, the firm’s position relative to its competitors can be assessed

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Technology and Strategy

High

Bet

Draw

Cash in

Fold

ec nat r op m ygo onhce T i l

Low High Low

Relative technology position

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Technology and Strategy
Technology & Business Portfolio Couples Technology portfolio with McKinsey (BCG) framework for business portfolio based on competitive position and attractiveness...

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Technology and Strategy

High

B A

High

B

A

ss e ne v t artt A i

Low High Competitive position Low

ec nat r op m ygo onhce T i l

Low High Low

Relative technology position

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Technology and Strategy
Technology Forecasting It is the capacity to perform systematic technological forecasting. Some useful techniques for forecasting are:  Technological progress functions (S-curves)  Trend extrapolation  The Delphi method  Scenario development

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Technology and Corporate Planning
 Executives generally have low technology experience
 Black-box view on R&D  Delays, success rates,...?  Time horizon difference in planning

 Elements in planning
 Industry, competition, organizational resources...  Technology can result from inside or outside  Questions: How are...
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