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Chapter 1

The document discusses the importance of technological innovation for business competitiveness. It notes that innovation is now the single most important driver of success for many industries. Advances in information technology have enabled faster innovation and shorter product lifecycles. The document also discusses the importance of carefully crafting innovation strategies and processes, as most innovative ideas do not become successful new products.

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320 views16 pages

Chapter 1

The document discusses the importance of technological innovation for business competitiveness. It notes that innovation is now the single most important driver of success for many industries. Advances in information technology have enabled faster innovation and shorter product lifecycles. The document also discusses the importance of carefully crafting innovation strategies and processes, as most innovative ideas do not become successful new products.

Uploaded by

samaneh.mahmoudi71
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Because learning changes everything.

Chapter 1
Introduction

Strategic Management of
Technological Innovation, 7th Edition
Melissa A. Schilling

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
Importance of Technological Innovation 1

Technological innovation now the single most important


driver of competitive success in many industries.
• Many firms earn over one-third of sales on products developed
within last five years.
• Product innovations help firms protect margins by offering new,
differentiated features.
• Process innovations help make manufacturing more efficient.

© McGraw Hill, LLC 2


Importance of Technological Innovation 2

Advances in information technology have enabled faster


innovation.
• CAD/CAM systems enable rapid design and shorter production
runs.

Importance of innovation and advances in information


technology have lead to:
• Shorter product lifecycles (more rapid product obsolescence).
• More rapid new product introductions.
• Greater market segmentation.

© McGraw Hill, LLC 3


Impact on Society
Innovation enables a wider range of goods and services to
be delivered to people worldwide.
More efficient food production, improved medical technologies,
better transportation, etc.
Increases Gross Domestic Product by making labor and capital
more effective and efficient.
However, may result in negative externalities.
• For example, pollution, erosion, antibiotic-resistant bacteria.

© McGraw Hill, LLC 4


Innovation by Industry: The Importance of
Strategy
Successful innovation requires carefully crafted strategies and
implementation processes.
Innovation funnel.
Most innovative ideas do not become successful new products.
• For example, The New Product Development Funnel in Pharmaceuticals.

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© McGraw Hill, LLC 5
The Strategic Management of
Technological Innovation 1

Part One: The foundations of technological Innovation.


• Sources of innovation.
• Types and patterns of innovation.
• Standards battles and design dominance.
• Timing of Entry.

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© McGraw Hill, LLC 6
The Strategic Management of
Technological Innovation 2

Part Two: Formulating Technological Innovation Strategy.


• Defining the organization’s strategic direction.
• Choosing innovation projects.
• Collaboration strategies.
• Protecting innovation.

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© McGraw Hill, LLC 7
The Strategic Management of
Technological Innovation 3

Part Three: Implementing Technological Innovation Strategy.


• Organizing for innovation.
• Managing the new product development process.
• Managing new product development teams.
• Crafting a deployment strategy.

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© McGraw Hill, LLC 8
Discussion Questions
1. Why is innovation so important for firms to compete in
many industries?
2. What are some of the advantages of technological
innovation? Disadvantages?
3. Why do you think so many innovation projects fail to
generate an economic return?

© McGraw Hill, LLC 9


Part One: Industry Dynamics of
Technological Innovation
The sources from which innovation arises, including the role
of individuals, organizations, government institutions, and
networks.
Types of innovations, and common industry patterns of
technological evolution and diffusion.
The factors that determine whether industries experience
pressure to select a dominant design, and what drives which
technologies dominate others.
Effects of timing of entry, and how firms can identify (and
manage) their entry options.

© McGraw Hill, LLC 10


Because learning changes everything. ®

www.mheducation.com

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
Accessibility Content: Text Alternatives for Images

© McGraw Hill, LLC 12


Innovation by Industry: The Importance of
Strategy – Text Alternative
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An illustration shows the process involved in new product


development in pharmaceuticals. The illustration is shaped like a
funnel, which has been placed horizontally. The top part of the
funnel is labeled as 5000 compounds, leading to the middle part
labeled as 125 leads, leading to the bottom part labeled as 2 to 3
drugs tested and ending at the tip of the funnel labeled 1 drug. A
bottle labeled R x is placed at the end of the funnel. A rightward
pointing scale is placed at the bottom of the funnel and is divided
into three sections. The first section is labeled discovery and
preclinical, 3 to 6 years. The second section is labeled clinical
trials, 6 to 7 years. The third section is labeled approval, half to 2
years.

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© McGraw Hill, LLC 13
The Strategic Management of Technological
Innovation – Text Alternative
1

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Part 1, labeled Industry dynamics of technological innovation,


contains Chapter 2, Sources of Innovation, Chapter 3, Types
and patterns of Innovation, Chapter 4, Standards battles,
modularity, and platform competition, and Chapter 5, Timing
of entry.

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© McGraw Hill, LLC 14
The Strategic Management of Technological
Innovation – Text Alternative
2

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Part 2, labeled Formulating technological innovation strategy,


contains Chapter 6, Defining the organization's strategic
directions, that is further divided into Chapter 7, Choosing
innovation projects, Chapter 8, Collaboration strategies, and
Chapter 9, Protecting innovation.

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© McGraw Hill, LLC 15
The Strategic Management of Technological
Innovation – Text Alternative
3

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Part 3, labeled Implementing technological innovation


strategy, contains Chapter 10, Defining the organization's
strategic directions, Chapter 11, Managing the new product
development process, Chapter 12, Managing new product
development terms, and Chapter 13, Crafting a Deployment
strategy.

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© McGraw Hill, LLC 16

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