Technology and Innovation Strategy Quiz

Technology and Innovation Strategy

• Class participation: 20%
• Hackathon competition: 30%
• Written exam: 50%

What is Technology

• Technology is about creating useful and enjoyable things (products/services) through tools, knowledge, and processes.
• It involves product technology (embedded in products/services) and process technology (mediating inputs/outputs).
• Broader than IT, encompassing application of tools, materials, and techniques to human activity.
• Technology sits between science and economics, bridging general rules (science) with practical life decisions (economics).

Where Technology Comes From

• Science provides fundamental principles, while economics considers practical life choices.
• Technology utilizes scientific knowledge and economic principles to develop and produce products/services.

The Importance of Technology

• Technology is crucial for creating value.
• Entrepreneurs, like those highlighted by Schumpeter, play a key role in transforming inventions into innovations, fueling economic growth.
• Technological innovations drive economic growth for countries.
• A study in the field of technological advancements by the economists Romer and Nordhaus highlighted the positive influence of digital technology.
• Data and Internet of Things (IoT) are significant drivers of technological transformation.
• While technology presents numerous benefits, it also brings ethical concerns, issues around practical life, and other relevant consequences that need to be considered.

Pharmaceutical Industry

• The pharmaceutical industry is characterized by fragmentation and consolidation, with large companies accounting for less than 50% of global sales.
• Market growth is driven by increasing life expectancy and rising incomes, particularly in developing countries.
• Key barriers to entry include significant R&D costs and patent protection, making it a complex and expensive industry to enter.
• Blockbuster drugs, those reaching $1B in sales, drive considerable R&D costs.
• Research is time-consuming, and uncertain outcomes mean that many experimental drugs fail.
• Marketing and sales are crucial; Pharma companies heavily employ sales forces.
• Knowledge in one therapeutic area can be leveraged into others if needed.
• Concerns around lifestyle-related and neglected diseases, such as malaria, affect research and product focus.
• Key factors of the process (Drug Discovery, Development, Commercialization) are defined.
• Mergers and acquisitions and outsourcing are crucial features within this industry, where also the opinion of the public is in focus.

Video Game Industry

• The videogame industry spans from arcade games to home consoles.
• Success is often due to dynamic succession: the ability of corporations to maintain leadership status is a continuous process.
• Focus on better graphics, reality in actions and a lower price, were a factor in the first generation success
• The targeting audience is often Kids and Teenagers, comparable to toy industry.
• The timing of releasing of products and games, to meet the needs in the market is crucial.
• The industry also depends on licensing agreements (compatibility) among producers and developers.
• Technological advances, like motion-sensitive controls and digital distribution, drive significant changes.
• Partnerships among developers/manufacturers are essential.
• Discontinuities in the quality, reality and speed of processing impacts the evolution of the industry.

Booksselling Industry

• The bookselling industry has transitioned from a traditional model characterized by wholesalers and retailers to superstores.
• The market has also concentrated into a few players.
• Technological advancements, like online selling, have reshaped the market.
• Amazon disrupted the industry by creating an online sales platform, enabling wider access and potentially lower costs.
• Amazon’s success was influenced by a good use of logistics, large capacity warehouses and multiple software tools.
• Bookshops have now embraced digital marketing tools as part of their strategy.
• Both stores and online businesses have focused on creating a customer experience in their environments.

Automotive Industry

• Tesla is a leader in the electric vehicle (EV) market, driven by innovative technologies like electrification, autonomy, and direct-to-consumer models.
• Tesla's disruption in the Automobile Industry is characterized by the application of data-driven technologies in their production and services sector.
• The industry is evolving toward electric vehicles (EVs) and autonomous driving as major trends.
• Tesla's business model involves direct consumer sales to eliminate dealerships.
• This model enables higher revenue margins and a more direct relationship with customers.

Photography Industry

• Kodak's success initially relied on simple, user-friendly products and highly priced film; in the digital era, it failed to adapt quickly enough.
• Initially a chemical business, Kodak adapted and experimented with the use of electronic technologies.
• A strong reliance in their chemical products, was not enough to face competitor advances on digital technologies.

Technology and Innovation Strategy Takeaways

• Competence-destroying strategies can lead to market dominance and high financial returns.
• Incumbents often lack the ability to adapt to new technologies as they are accustomed to specific business models, cultures and cognitive models.
• Successful companies must be able to identify core competencies in the face of continuous change, so as those can be used to transition or adapt to new dynamics.
• Disruptive technologies emerge from niches.
• It's important to build strong relationships with customers.

Toy Industry

• The LEGO company started from a very simple wooden toys model and gradually improved product line to the present brick model, relying on manufacturing efficiency, product variety and strategic choices.
• The introduction of plastic injection molded bricks allowed the company to develop greater complexity and variety in their products.
• The industry went through significant and challenging periods, as other new entrants took part into the market and the consumption trends changed.
• The LEGO Company adapted to the industry and its needs.
• Competition is intense in the TOY industry.
• The TOY industry relies on high demand periods, as during holidays and sales.

Movies Industry

• Disney is a dominant company in the movie industry, but faced significant challenges and changes during its long history, with strong leadership battles among managers and CEOs.
• Pixar has been a successful company in the animation industry, focusing on innovation in the production process and the production of quality and profitable movies.
• Both companies have undergone restructuring periods.
• Disney also did important strategic choices related to acquisitions to keep up with the technological advancements in the industry (as in the case of the Pixar acquisition).

Tech Industry

• Facebook's acquisition of WhatsApp was initially successful, but challenges included integrating functionalities, the revenue model and the integration of firms’ cultures.
• Success depends on identifying the strengths and weaknesses of competitors, and adapting to the needs of consumers.

Energy Drinks Industry

• Red Bull successfully disrupted the energy drink market in the early 2000s by creating a niche, targeted product for a specific demographic.
• The success was due to a strong marketing strategy, associating the brand with extreme sports.
• Their aggressive market approach and commitment to product diversity helped them achieve a considerable market share.

Test your understanding of technology as it intersects with science and economics. This quiz covers key concepts related to the importance of technology and its role in creating value. Challenge yourself to explore the foundations of technological innovation and its applications.