Exam 2

Question 1

Technology Strategy

Answer 1

an integrated set of choices about how to use new technology to produce superior financial returns in the long run.

Question 2

technology definition

Answer 2

the way an organization produces outputs from inputs

Question 3

Why is technology strategy different from conventional strategy?

Answer 3

Because new technology can create a new way to compete–as the wonder bread example shows–it can represent an enormous opportunity and a potent threat. It can create competitive advantage, undermine existing competitive advantage, radically reshape an industry, and even threaten an industry’s very existence. Strategists must understand the competitive implications of a new technology

Question 4

Why do firms pursue technology strategies?

Answer 4

the technology strategist needs to recognize the potential for new competitive positions and new sources of competitive advantage, and to perceive the most profitable opportunities and the most potent threats. Tech strategy also addresses the corporate strategy question: what business should we be in?

Question 5

How to manage technology risks

Answer 5

Failed technology may harm reputation or company; capturing value depends on ability to reduce or eliminate technical risk.

Question 6

How to commercialize new technology

Answer 6

attacker’s advantage; ideas factories; reputation-based ideas trading; greenfield competition

Question 7

Attacker’s advantage

Answer 7

the advantage an entrant with a new technology may have when it is difficult for incumbents to divert resources away from profitable and high-margin current technologies (Amazon v. Borders)

Question 8

Idea’s Factories

Answer 8

An innovator has a technology that the incumbent cannot exploit on its own, and the incumbent has complementary assets that enhance the value of the technology –> cooperation. (Genentech licensed IP to heal-care company)

Question 9

Reputation-based ideas trading

Answer 9

Incumbent’s who develop a reputation for being willing to participate in the market for ideas–for example, by paying licensing fees or acquiring companies at a fair price–provide an incentive for innovators to develop new technologies that enhance the value of the incumbent’s assets.

Question 10

Greenfield competition

Answer 10

The innovator has a technology idea that is difficult for an incumbent to develop, and the incumbent has no valuable complementary assets.

Question 11

Importance of platform technology

Answer 11

Allows a firm to control the ecosystem and shape the competitive environment by requiring firms to cooperate or risk exclusion from the ecosystem. (Google, Apple)

Question 12

Congruence building blocks

Answer 12

Hardware: critical tasks, the formal organization (metrics, rewards, organizational structure, and processes); Software: skills and competencies, culture.

Question 13

4 attributes of a nation

Answer 13

1. Factor conditions 2. Demand conditions 3. Related and supporting industries 4. Firm strategy, structure, rivalry

Question 14

Factor conditions

Answer 14

The nation’s position in factors of production, such as skilled labor or infrastructure, necessary to compete in a given industry

Question 15

Demand conditions

Answer 15

The nature of home-market demand for the industry’s product or service.

Question 16

Related and supporting industries

Answer 16

The presence or absence in the nation of supplier industries and other related industries that are internationally competitive.

Question 17

Firm strategy, structure, and rivalry

Answer 17

The conditions in the nation governing how companies are created, organized, managed, as well as the nature of domestic rivalry.