Lecture 18 – Tech. Environment &
refers to inventions or innovations from applied science or engineering research, including processes
• 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
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
• 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
• The challenge is not only technical, but also commercial – to make practical affordable products
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
• 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
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
• 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