Strategic Technology Deployment in Value Chains

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Discover the principles and drivers of technology deployment in the value chain, considering environmental and firm-related factors. Learn about opportunities, available technologies, reasons for deployment, and resource considerations. Explore the strategic and industry contexts, technology choices, and resources needed for effective technology strategy in the value chain.

  • Technology Deployment
  • Value Chain
  • Strategic Context
  • Industry Context
  • Technology Choice

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  1. Ch 12 Deployment of Technology in The Value Chain http://jaryono.blog.unsoed.ac.id E-mail: jaryono@gmail.com

  2. Principle of Technology Deployment in The Value Chain (Guided by environmental and firm-related factor) Where in the Value Chain are the opportunities for deployment of technology? Which technologies are available? What are the reasons for deploying technology? Do we have adequate resources to do so?

  3. Strategic Context [Should we deploy technologies?] Industry Context Technology Choice Technology Context [Do we have appropiate technologies to deploy?] [Where in the value chain do we deploy technologies?] Resources and Capabilities [Can we deploy appropriate technologies?] DRIVERS OF TECHNOLOGY STRATEGY IN THE VALUE CHAIN

  4. Environmentan Context The industry and technology factors constitute the environmental context in which technologies to be deployed in the value chain are chosen. These factors are not necessarily coupled: Technology environment may evolve independently of the industry, and vice versa. Thus, technolgy intelligence outputs of the analysis of technology environment and the analysis of competitive domains should inform these decisions.

  5. Technology Context The technology context determines the availability of the technologies that are appropriate for a firm to deploy in its value chain. These may be technologies that are available in-house or technologies that can be acquired from outside.

  6. Product-Market Scope and Value Chain Configuration Value Chain Configuration Mass Production Mass Homogeneus Low Relatively low Craft Lean Mass Dimension Production Niche Single unit High High Production Mass Homogeneus Low Relatively low Customization Niche Many High Moderate Market Market Segments Costomization Required Value Added Due to Customization Quality Emphasis Cost Emphasis Technology Emphasis High Low Moderate Low High High Moderate High High High High High

  7. Compete Domains On the ohter hand, the characteristics of competitive domains determine where in the value chain the firm should deploy its technologies so as to support its corporate strategy. They dictate the deployment of specific technologies and offer opportunities for changing the nature of rivalry.

  8. Value Chain Focus and Evolution of Competitive Domains Value Chain Activity Manufacturing Process Engineering Eras of Evolution Technology Emergence R & D Marketing Service Limited Product Design Establishing Market Channels Market Feedback for Design and Service Aggressive Growth Branding Efficient Marketing Institutional Milieu Scale-up of Manufacturing Learning Curve Capacity Building Cost Reduction Incremental Change Product Improvement Service Setup Process Innovation

  9. Firm Related Factors A firm s strategic context and its resources and capabilities represenbt the managerial dimension in the technology deployment in the value chain. These vacrors are interrelated: On the on hand, the strategies a firm pursues are dependent on its resources and capabilities; on the other hand, the strategies it pursues may, in turn, enable it to build its resources and capabilities. Thus, technology choices in the value chain may reflect both attempts to build resources and capabilites and deployment of existing value chain elements to furtheer business strategies.

  10. Firms need the emphasize four unique principles in their deployment of thecnologies in value chain: The thrust of technology deployment should be based on a firm s business strategy; During the implementation of business strategy, broad objectives need to be broken down into very specific, clearly articulated objectives; Technology deployment in the value chain requires inter- functional integration; Finally, new product introductions require changes in the value chain configuration as the new product moves from the dewign to the commercialization phase. 1. 2. 3. 4.

  11. Business Strategy Business Strategy The business strategy low cost versus differentiation pursued by a firm has an important influence on the scope and timing of technologies to be deployed in the value chain.

  12. Strategic Context and Technology Choice Scope Strategic Focus Low Cost Broad Narrow Broad Deployment Niche/Focus Selective Deployment Niche/Focus Selective Deployment Differentiation Broad Deployment

  13. Business Strategy Business Strategy In recent years, competitive benchmarking has become increasingly common as a tool by which companies try to achieve their value chain objectives. Competitive benchmarking involve analyzing the performance and practicces of the best-in-class companies. Their performance becomes a benchmark to which a firm can compare its won performance, and their practices are used to improve the focal firm s own practices.

  14. Specific Objectives Specific Objectives To be implementable, the objective behind technology deployment in the value chain needs to be operationalized in concrete and specific terms. Broadly speaking, one can identify four specific objectives that can lead to a low cost or differentiation strategy: superior efficiency; superior quality; superior customer responsiveness; or superior innovation.

  15. Strategic Context and Value Chain Objectives Strategic Context and Value Chain Objectives Efficiency Quality Low Cost Innovation Customer Responsiveness Differentiation

  16. Inter-Functional Integration The specific goals efficiency, quality, innovation, and customer responsiveness require technology strategies that embrace several distinct value chain activities. In other words, these goals need to be regarded as cross-fuctional goals that cut accross different value activities within the company and require substantial cross-functional integration.

  17. Product-Value Chain Linkage

  18. Decision Criteria Decision Criteria Four major criteria should drive the decision to deploy a specific technology in the value chain activities of a firm: To what extent dowes it accomplish the objectives? To what extent do we have the resources to deploy the technology? Cost-benefit analysis: Do the benefits outweigh the cost? Can we appropriete enough benefits from the deployment to offset the costs? Can we implement the deployment fast enough to accomplish the objectives?

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