STRATEGIC MANAGEMENT & INNOVATION
EMERGING INDUSTRIES & MANAGEMENT TECHNOLOGY.
DATE: 15TH JULY, 2011
Technology is a greatly dynamic field. Tools and systems of technology are constantly and ever changing. New ideas and innovations are coming up every other hour. The think tank of new technologies never sleeps. Needless to say, users of the same are always on the lookout for newer, better, cheaper and easier to use systems and tools of technology; those that offer faster and more convenient services than the previous. In view of this, technology based industries have no much choice but to keep abreast with the new and emerging changes in the industry. The growth in the technology industry brings with it a sharp rise in competition just as may be the case in all other growing industries. Technology based industries therefore need to determine and build on their competitive advantage as a way of ensuring sustainability in their dynamic environment of operation. ‘’In the expanding global economy, emerging technologies are creating and transforming industries at an unprecedented rate’’ (Mack Centre for Technological Innovation) This paper attempts to discuss the emerging industries and management of technology in light of the following three issues: 1.Determining the competitive advantage in technology based industries 2.The role of technology in sustainable strategy development 3.The appropriate strategies which should be exploited in the age of 21st century .
DETERMINING THE COMPETITIVE ADVANTAGE IN TECHNOLOGY BASED INDUSTRIES As stated earlier in the introduction, determining a competitive advantage becomes extremely important for technology based industries in order to attain sustainability in the ever changing environment of technology. The competitive advantage in technology based companies can be determined as outlined below. Competitive Advantage
Is defined as the set of unique or hard to duplicate abilities, competencies and capacities contained within an organization, that allows it to better compete within the markets it operates in. (Mather, 2005) When a firm earns, or has the potential to earn a persistently higher rate of profits than its rivals in the same industry (Grant, Contemporary Strategy Analysis, 2005) Michael Porter states that there are three generic types of competitive advantage strategies: Cost Leadership and Differentiation and Focus (Porter, 1985). (Bruner, 1998) defines cost leadership as stems from performing activities and processes in a less expensive way than the competitors. It is matching (or exceeding) the quality of the competing products and services, in order to provide a greater value to customers. He also describes differentiation as a matter of delivering non price value for which customers are willing to pay. It is more than delivering a different or better product
| Defined by Cost| Defined by distinctiveness|
Industrywide (Broad)| Low-cost Leadership| Differentiation| Specific Niche or Segment( Narrow)| Cost-based focus(a)| Differentiation-based focus(b)| Adapted from Competitive Strategy: Techniques for Analyzing Industries and Competitors by Michael E. Porter. Generic Strategic Approaches to Build Competitive Advantage (a) In cost focus a firm seeks a cost advantage in its target segment, while in (b) differentiation focus a firm seeks differentiation in its target segment. Both variants of the focus strategy rest on differences between a focuser's target segment and other segments in the industry. The target segments must either have buyers with unusual needs or else the production and delivery system that best serves the target segment must differ from that of other industry segments. Cost focus exploits differences in cost behaviour in some segments, while differentiation focus exploits the special needs of buyers in certain segments. (Porter's Generic Competitive...