Technology and Innovation Strategy
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What was a key reason for Microsoft's failure in entering the gaming console market with Xbox?

  • They had poor marketing strategies.
  • They offered better multiplayer features than Sony.
  • They did not have a clear focus on the gaming industry. (correct)
  • Their console was too advanced for the market.

    • What strategy shifted in the gaming industry starting from the 2000s?

  • Introducing pricing strategies to undercut competitors.
  • Generating profit only from hardware sales.
  • Emphasizing profits from services and additional content. (correct)
  • Focusing on developing standalone consoles.

    • What was one of the innovations of the WII console released in 2006?

  • Integration of high-definition DVDs.
  • Advanced graphic processing capabilities.
  • Compatibility with previous generation games.
  • Wireless and motion-sensing controllers. (correct)

    • What major loss did Microsoft incur when they entered the gaming console market?

    <p>$8B from cannibalizing their own computer industry.</p> Signup and view all the answers

    In what way did the PlayStation 2 differentiate itself from competitors at the time of its release?

    <p>It had superior graphics and internet connectivity.</p> Signup and view all the answers

    What was a significant change in consumer behavior after the rise of digital imaging?

    <p>Consumers began to develop their own images.</p> Signup and view all the answers

    Which factor contributed to the decline of traditional film-based photography?

    <p>The higher quality of digital images.</p> Signup and view all the answers

    What was one of the main consequences of Kodak's Photo CD introduction in 1990?

    <p>The traditional film business faced severe disruption.</p> Signup and view all the answers

    Which challenge did Kodak face with its Photo CD product?

    <p>Insufficient storage capacity of the CDs.</p> Signup and view all the answers

    What skill set became more important in the electronics industry compared to traditional photography?

    <p>Knowledge of digital software and imaging.</p> Signup and view all the answers

    What percentage of the total course evaluation is dedicated to class participation?

    <p>20%</p> Signup and view all the answers

    Which aspect is NOT a component of technology as described?

    <p>Emotional technology</p> Signup and view all the answers

    How is technology positioned in relation to science and economics?

    <p>Technology exists between science and economics.</p> Signup and view all the answers

    What defines the complexity of today's technological world for firms?

    <p>Increased collaboration and joint ventures.</p> Signup and view all the answers

    Which of the following best describes the relationship between R&D and technology?

    <p>R&amp;D is collaborative and integral to technology.</p> Signup and view all the answers

    What is the main focus of economics in the context of technology?

    <p>Making decisions based on routine living.</p> Signup and view all the answers

    What is implied about technology during the 1st Industrial Revolution?

    <p>The importance of collaboration in R&amp;D increased.</p> Signup and view all the answers

    What are the three main components illustrated within the relationship between science, technology, and business?

    <p>Discoveries, inventions, innovations</p> Signup and view all the answers

    What is essential for the formation of a standard in technology?

    <p>Adoption of the technology</p> Signup and view all the answers

    What can lead to the failure of some companies in reaching critical mass within the industry?

    <p>Inability to cross the chasm</p> Signup and view all the answers

    Which factor significantly impacts the success of a disruptive technology?

    <p>Ability to form partnerships</p> Signup and view all the answers

    What is the main benefit of having a strong platform architecture in technology?

    <p>It stimulates adoption</p> Signup and view all the answers

    In the video game industry, which players are referred to as complementors?

    <p>Game developers and hardware makers</p> Signup and view all the answers

    What was one significant challenge faced by Microsoft in its market strategy?

    <p>Difficulty in building a network of developers</p> Signup and view all the answers

    What characterizes the book industry market based on the provided content?

    <p>Cyclical nature with concentration on weekends</p> Signup and view all the answers

    What was the format of the revenue growth in the US book industry in the 1990s?

    <p>Stable growth with annual growth of 5.4%</p> Signup and view all the answers

    What is a key reason why high gross margins in the pharmaceutical industry come with higher risks?

    <p>The need to invest heavily in R&amp;D.</p> Signup and view all the answers

    Which of the following accurately represents the distribution of drug types in the pharmaceutical industry?

    <p>Ethical drugs account for 80% of the market.</p> Signup and view all the answers

    What is the primary purpose of outsourcing in the pharmaceutical industry?

    <p>To externalize costs and R&amp;D.</p> Signup and view all the answers

    Why is public opinion crucial for pharmaceutical companies?

    <p>It impacts reputation and relationships with opinion leaders.</p> Signup and view all the answers

    What is a significant factor that differentiates the pharmaceutical industry from others regarding substitutes?

    <p>Only ethical decisions constitute potential substitutes.</p> Signup and view all the answers

    How has the evolution of the pharmaceutical industry been characterized since the 1960s?

    <p>A transition from random screening to rational drug design techniques.</p> Signup and view all the answers

    What is the average return on equity (ROE) for the pharmaceutical sector?

    <p>20%</p> Signup and view all the answers

    What best describes the effect of biotechnology on the pharmaceutical industry?

    <p>It has disrupted traditional drug development methods.</p> Signup and view all the answers

    What was Kodak's competitive advantage during the Black and White era?

    <p>User-friendly product</p> Signup and view all the answers

    Which strategy did Kodak use regarding its pricing in cameras and films?

    <p>Low price for cameras, high for films</p> Signup and view all the answers

    What contributed to the high entry barriers Kodak maintained during the Color Film era?

    <p>Strong R&amp;D and manufacturing know-how</p> Signup and view all the answers

    What primarily drove Kodak's market strategy during the Digital Era?

    <p>Incremental R&amp;D to maintain the status quo</p> Signup and view all the answers

    What role do expectations play in the valuation of companies in emerging markets like EV?

    <p>They can lead to massive growth in market capitalization.</p> Signup and view all the answers

    What is a notable example of displacing technology mentioned in the context of Kodak?

    <p>Sony Mavica as a precursor to digital cameras</p> Signup and view all the answers

    What marketing approach did Kodak emphasize during its early years?

    <p>Extensive advertising and customer focus</p> Signup and view all the answers

    What was a significant consequence of Kodak's approach to R&D during the Color Film era?

    <p>It allowed Kodak to become the industry standard in photo-finishing.</p> Signup and view all the answers

    Study Notes

    Technology and Innovation Strategy

    • Course grading: Class participation (20%), Hackathon competition (30%), Written exam (50%)
    • Questions are encouraged for discussion.

    What is Technology

    • Technology is about creating useful and enjoyable products and services.
    • It encompasses machinery, tools, and knowledge.
    • Product technology is embedded in final products, while process technology mediates inputs and outputs.
    • Technology is both practical and theoretical, applying knowledge to specific problems and devices.

    Where Technology Comes From

    • Technology sits between science and economics.
    • Science provides general principles, while economics relates to practical decision-making.
    • Technology connects these principles to the practical applications of tools, materials, processes, and techniques.

    The Importance of Technology

    • Technology is crucial for value creation.
    • Schumpeter's model highlights entrepreneurs as key drivers in transforming inventions into innovations.
    • The process involves imitation, followed by further innovation and a continuous cycle.
    • Innovation fuels economic growth for a country.
    • Technology is the engine of growth

    Pharmaceutical Industry

    • The pharmaceutical industry is characterized by both fragmentation and consolidation.
    • Growth is driven by increasing longevity and rising incomes, particularly in developing nations.
    • The largest markets are North America, Europe, and China.
    • High entry barriers, due to significant R&D costs and patent protection, are a major factor in this field.
    • The uncertainty associated with long research periods, and the possibility of costly side effects, also make the industry uncertain.
    • There is a need to explore the versatility of knowledge and capabilities accumulated in addressing one therapeutic area, as it can be leveraged to other ones.
    • The process typically involves drug discovery, development, and commercialization.

    Videogame Industry

    • The videogame industry evolved from arcade games to home consoles.
    • It's characterized by rapid succession of generations by game consoles with successively greater graphics and action functionality
    • The primary target consumer is children and teenagers.
    • Console costs for consumers are generally low, allowing for high profits from the sale of software.

    Books Industry

    • The book industry is a cyclical market, frequently concentrated in the fourth quarter, often dependent on external factors like external technological advancements, with the US market reaching sales of $26 Billion in the 1990s with a modest growth rate of 5.4%.
    • The market is quite concentrated, with a few large publishers controlling a significant share.
    • Traditional publishing involved a consignment system where books could be returned for credit if unsold.
    • The growing role of large “superstores” and online retailers such as Amazon has significantly altered the industry model.
    • The rise of superstores (B&N) marked a shift toward a much larger scale, focusing on specific genres and attracting many consumers through better prices and more comprehensive product ranges.
    • Amazon's rise marked a new entry strategy and a shift toward online retail, focusing on efficiency and extensive product assortment—becoming the most influential force to disrupt the retail model of the industry.

    Automobile Industry

    • The automotive industry has high barriers to entry due to substantial investments required for mass production.
    • Tesla stands out for its approach to consumers via a direct model without traditional dealers for vehicles.
    • It leverages electrification for environmental concerns and autonomous driving features as a competitive strength.

    Photography Industry

    • Kodak, founded in 1880, dominated the black-and-white photography market.
    • Its competitive advantage initially was based on a simple user-friendly device ("you press the button, we do the rest"),
    • Its strategies were to maintain a high level of R&D.
    • Kodak had a major crisis because it did not anticipate the emergence of digital alternatives to photography.

    Toy Industry

    • The toy industry is characterized by fluctuating demand and cyclical product life cycles.
    • The shift in market demand towards other forms of entertainment and technology (especially videogames) as well as increased pressure from competition has led this industry to a prolonged crisis.
    • External pressures and internal problems (too many SKUs) led to severe issues and potential bankruptcy, but effective adjustments by new leadership resulted in resurgence after the crisis.

    Tech Industry (Facebook & WhatsApp)

    • Facebook's acquisition of WhatsApp was part of a diversification strategy.
    • WhatsApp initially focused on simple, effective messaging, avoiding data collection issues—hence, avoiding concerns about users' privacy.
    • Facebook leveraged existing platform strengths.
    • Challenges were related to monetization, competitive pressures, privacy concerns, but Facebook maintained WhatsApp's independent operation.

    Movie Industry

    • Disney's approach in the movie industry was geared toward distribution of many products through its many stores.
    • Pixar's focus was concentrated on highly-skilled animation production, which created a distinctive advantage highly valued by consumers for animation.
    • The management decisions from one CEO (Eisner) contrasted with another CEO (Katzenberg), giving very different directions to Disney, and in general, the importance of well-defined management priorities and direction.

    Telecommunications Industry

    • The telecom industry faces significant challenges due to intense price wars and high CAPEX investments for expanding, and generally a market that's saturated.
    • Competition and cost reduction are major pressures for profits and are a potential driver for consolidation and mergers.

    Energy Drinks Industry

    • Red Bull initially focused on the niche market of high energy products and its target was young rebels with extreme lifestyles.
    • Successful marketing strategies and strong brand building.
    • The success was based on marketing strategies like partnerships with extreme sports and targeting young people.

    Dynamic Capabilities

    • The ability of firms to adapt, change and create new capabilities in response to external pressures.
    • The importance of dynamic capabilities for surviving and thriving in a changing environment.

    Organizational Recipes

    • Corporate venture capital: Investing in external companies to diversify risk and foster innovation.
    • Business development: Establishing internal divisions to develop new products and increase market growth.
    • Agile organization: Combining adaptation and alignment to promote flexibility and efficiency.
    • Managing for value: Focusing on operations and efficiency to realize longer-term strategies.
    • Importance of managerial decisions and cognitive inertia.

    Takeaways

    • Accurate evaluation of threats + consistent business strategy + maintaining flexibility is important to avoid failure when facing a changing industry scene.
    • Proper due diligence (cost, revenues), risk assessment, understanding competitors, and consistent valuation procedures are important aspects to be considered during the acquisition of companies and any action impacting the firm.

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    Technology and Innovation Strategy PDF

    Description

    Explore the fundamentals of technology and its strategic role in innovation. This quiz discusses the relationship between technology, science, and economics, as well as the importance of technology for value creation. Test your understanding of how technology influences product and process development.

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