Management 7310

Technology Strategy

Class 1: Introduction

Manav Raj
 My sell on the course

Tech is relevant in every industry

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 An Important Paradox:
Commercial Failure of “Great” Tech Innovations

Glass Newton PDA

Segway (Apple)
(Google)

Iridium Battery Swapping Network Desktop Computer

(Motorola) (Better Place) (Xerox)

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 Warmup Breakout (10 mins)

Why do companies fail to generate value from promising

inventions?

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 The “Xerox” Problem

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 The “Nokia” Problem

Nokia’s R&D Expenses and Key Innovations (US$ Bn)

8.0 2000 Nokia

Symbian became the Nov 2005
7.0 Apple
first modern smartphone Nokia launched
OS with launch of first internet tablet
6.0 Ericsson R380 N770
5.0
1996 Aug 2007
4.0 Nokia introduced Nokia launched
its first smartphone, its mobile
3.0 Nokia 9000 Nov 2004 internet platform
Communicator Launched Nokia 7710, Ovi
2.0 first smartphone with
touch screen device
1.0
-
'96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07

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 Nokia 9000 Communicator (1996)

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 Tale of Two Start-ups

Same idea around the same time…but with

fundamentally different strategies

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 Monthly U.S. Visitors (000s)

Source: comScore

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 Digital Navigation Maps (Garmin vs. Google)

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 The challenge of technology entrepreneurs and
firms is not so much about coming up with
great ideas or recognizing the technology
trends….

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 The hard part is creating and capturing
value from that idea.

Inventions Innovation

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 Breakout (5 mins)

What are some companies you think have done well in

creating and/or capturing value from technology?

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 What is Technology Strategy?
Technology Strategy is a plan that identifies a set of choices for
value creation (market demand) and value capture (profits)
from a technological innovation before the opportunity for
value capture is dissipated.

• Innovation within or external to a firm.

• Not a passive process, but the active choices that allow a

firm to set expectations, establish priorities, achieve internal
coherence, make commitments, and ensure value capture

• A plan for choosing what NOT to do

• A plan that forms the basis for change in choices over time

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 What makes tech strategy different?

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 The Challenge of Technology Strategy

Traditional Strategy Technology Strategy

• Clear understanding of customers and • Diffuse understanding of customer

willingness-to-pay (WTP) needs and potential willingness-to-pay

• Clear relationship between WTP • Significant uncertainty about how

drivers and cost structure investments and other costs shape
WTP (typically 2-5 years after
• Fixed Industry Structure (Five-Forces) investment)

• Sufficient resources and time to • Highly dynamic and uncertain industry

achieve operational effectiveness structure (new technologies, business
models spread across the ecosystem)
• Potential opportunities to establish a
position that can then be made • Start-ups with limited resources and
immune to competition limited time

• Established firms with existing

businesses and organizational inertia

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 Through this class, we will discuss how…

• To evaluate choices and model decision-

making:
- Technologies
- Markets
- Business Models

• To change them as technologies and

industries evolve

• For both emerging and established firms

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 Course Conceptual Structure

Platforms
(Ecosystems,
Two/Multi-sided
markets)

Disruption Dynamics
(Start-ups/Established
Firms)

Technology Development and

Commercialization (Fundamentals)

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 Learning Approach
• Interactive discussion-based class sessions
• In-course content:
Lectures to discuss key concepts and ideas
Cases to understand the application and extension of theories/logics
Simulations to further expand upon these thoughts
• Guest speakers to further tie concepts to the real world.
• Outside of class:
Companion readings to expand upon concepts, theories and
frameworks discussed in class
• Feedback is always welcomed.

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 Broad Spectrum of Technology (not just IT)

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 Cases

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 Simulations

• An established firm • Video game simulation to

managing R&D investment examine strategy and
decisions in existing and network effects in a
emerging battery platform setting.
technologies to ensure
long-term value creation

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 Evaluation

• Participation (45 points)

Attendance (15 points)
In-class contribution (20 points)
Pre-class poll assignments (10 points)
• Written assignments (22.5 points)
Case write-up (7.5 points)
Current events analysis (7.5 points)
BBB simulation write-up (7.5 points)
• Final group project (32.5 points)

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 Class Participation
• Attendance tracked through Wharton’s app.
Absences excused only for illness or personal emergencies.
• Pre-class online poll
Due on 12pm pre-class. Late submissions will not be accepted.
• In class comments
 High quality comments are those that:
- move the class discussion forward; build on other comments;
draw on specific facts from the case or personal experience
 Don’t be afraid to be “wrong”!
 “Warm” calling for cases.
• Bringing questions/cases to the class!
• Respect for others and the classroom environment
 No phones, laptops, or tablets in the classroom.
 If you are going to be doing something else, don’t come.

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 AI policy

• You are welcome (and encouraged!) to use AI tools to help in

completing any course assignments.
• I ask that you please briefly (i.e., two to three sentences)
disclose how you used AI in any assignment. This will not
affect evaluation of the assignments.
e.g., “AI Disclosure: I used ChatGPT for this assignment by
providing it with the case and asking it to summarize key points. I
then wrote the case write-up based on the summary.” or “I fed
ChatGPT my notes and asked it to generate a write-up for me.”

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 About me
• Background in economic
consulting (pharma and IP).
• PhD at NYU Stern
• Research studies:
How do firms and markets
respond to tech change?
How do non-market forces affect
innovation?
Variety of settings/phenomenon:
platforms, AI, music, books,
restaurants, start-ups, patents…
• Love cooking/eating, fiction
novels (sci-fi), hip hop, and the
Denver Broncos.

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 About You: Past Experiences

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 Tech-based companies excited about

19 apple
14 openai
12 nvidia
12 google
11 amazon
9 tesla
9 microsoft
8 spotify
6 netflix
6 adobe
5 cruise
5 stripe
5 spacex

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 Tech-based companies you are not excited about:
21 meta
18 twitter
11 ibm
8 netflix
8 microsoft
7 snap
7 ebay
6 uber
6 salesforce
5 dell
5 google
5 snapchat
5 tesla
5 yahoo

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 From last year’s MBA class:

Google/Alphabet 8 1
Amazon 7 1
Apple 5 2
Snap 4
Netflix 5
IBM 5
Meta/Facebook 4 11

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 Next Week: Microfoundations

1. Technology Development
2. Technology Adoption
3. Technology Ecosystem
4. Technology Business Model

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