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Lecture 18

Lecture 18 - Tech. Environment & Appendix C

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McMaster University
Rita Cossa

Lecture 18 – Tech. Environment & Appendix C Technological Environment refers to inventions or innovations from applied science or engineering research, including processes Overview • It is perhaps the most dramatic force now shaping our destiny. o Technology has released such wonders as antibiotics, robotic surgery, miniaturized electronics, laptop computers, and Internet. o It has also released such horrors as nuclear missiles, chemical weapons, and assault rifles. o It has released mixed blessings such as automobiles, television, and credit cards. • Our attitude toward technology depends on whether we are more impressed with its wonders or its blunders. Research and Development (R&D) • defined as “work directed toward the innovation, introduction, and improvement of products and processes” • Basic (pure) Research o uncovering new knowledge with the goal of scientific advancement but no primary focus on whether any discoveries that might occur are immediately marketable • e.g., chemists may observe how certain molecules behave • Applied Research o focusing specifically on how a technological innovation can be put to use in the making of a product that can be sold in the marketplace o Development and Implementation o put new or existing knowledge to use in producing a product • Today’s research is usually carried out by research times rather than by lone inventors • Many companies are adding Marketing people to R&D teams to try to obtain a stronger marketing orientation. • The challenge is not only technical, but also commercial – to make practical affordable products Innovation o “a new product or process that can be purchased; when technological know-how is developed, sold, distributed, and used, then it becomes an innovation” o the three most important objectives of innovation are to • 1. improve product quality • 2. increase production capacity • 3. extend product range Technology • everything from phones and copiers to computers, medical imaging devices, personal digital assistants and the various software programs that make business processes more efficient and productive o included are human knowledge and work methods • although technology is applied within organizations, the forms and availability of that technology come from the general environment • each new wave of technological innovation can replace existing products and companies o e.g., CDs hurt phonograph records and digital photography hurt the film business Product and Service Technologies • Technological change is the result of research so it is hard to predict • Product and service technologies are the technologies employed for creating new products – both physical goods and services – for customers. o Although many people associate technology with manufacturing, it is also a significant force in the service sector. • The rapid advancement of the Internet into all areas of business is also a reflection of the technological environment. • Indeed, new technologies continue to revolutionize nearly every aspect of business, ranging from the ways that customers and companies interact to where, when, and how employees perform their work. • Companies must decide how much emphasis they are going to place on R&D as a competitive tool. • R&D intensity refers to R&D spending as a percentage of the company’s sales revenue. o Research has shown that companies with a high R&D intensity are better able to gain market share in global markets. • Technology is the basis of competition for some firms, especially when the company’s goal is to be the technology leader in its industry. • Businesses are more competitive if they can systematically decrease cycle times, which is the time from beginning to end that it takes a firm to accomplish some recurring activity or function. Technology’s Impact on Customer Value • Advances in techno
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