Example of Integrating Technology and Strategy: Dell - Literature review Example

Business Table of Contents Example of Integrating technology and strategy: Dell 10 Conclusion 11 Reference List 12 List of figures Figure Determinants of technology strategy 7 Executive Summary The main purpose of the report is to highlight the evolutionary factors that are related to development of technological strategies. The internal and external factors that are responsible for evolution of the technological strategies are depicted in the report. The factors, which influence decision making of the managers, are identified laying emphasis on their competencies. The skills and competencies of the managers are important as they have to take the initial decision for change in technological design. The generative forces help a company to innovate new products through evolution of technological strategies. The forces are discussed in brief along with its influence on the technological decisions. Moreover, the integrative forces are also identified in the report and the basic points of difference are drawn between the integrative and generative forces that have the ability to affect the technological strategies. Introduction Technology is regarded as the central resource of a company through which it can maintain a sustainable competitive advantage. Innovation and technology should be understood by the strategic managers (Lynn, 2008).. Hence, the managers are expected to build those competencies and capabilities, which will encourage them to invent new products and services. After understanding the concept of innovation in a company, the use of technology is strategized accordingly (Dorf, 1998). Integration of technology in corporate strategic objective is required in a company in order to sustain in the long run. In order to do so, the managers should recognise the importance of technology and interpret it in form of strategy (Lynn, 2008). The strategies suggest that the objectives of the company depict the historical and present performance with respect to value, core competencies and products. These competencies are derived from the combined learning of the organisations. Hence, an evolutionary process is required to identify how strategies have changed over the passage of time. The evolutionary theories, which is applied to the social system concentrate on retention-selection-variation methods in order to explain the active behaviour of the company (Dorf, 1998). Therefore, the report highlights whether technology strategy is shaped by the generative forces of a company’s strategic action and the evolution of the technology with help of its integrative or selective forces. Literature Review and Critical Analysis Strategies pertaining to technology are developed based on the organisational learning. This learning is significant in order to examine the technological capabilities of a company. Technological capabilities are developed with the help of skills of the managers and know-how of the organization that are essential for building the competitive advantage. The technology strategies aims at addressing four main dimensions related to strategic action such as competitive strategy, resource commitment, value chain, and organizational design stance. The mentioned factors are adapted and shaped with the help of evolutionary forces that are present within the external and internal environment and technology (Wheelwright and Christensen, 2009). According to Burgelman, Wheelwright and Christensen (2009), first and foremost factor i.e. competitive strategy stance takes decision making into consideration, linked with technological advancement. It also involves ways for building, enhancing and sustaining competitive advantage to differentiate from competitors and become the cost leader. Choosing the right technology is essential as the decision related to architecture and other components are dependent on them. As technological decisions are related to high capital investment, these decisions are taken very carefully and if these decisions are reversed the cost is very high (Chang and Tsai, 2000). Figure 1: Determinants of technology strategy (Source: Burgelman, Wheelwright and Christensen, 2009) Technology leadership highlights wide range of competencies over the time that aims at developing cost leadership and differentiation. It involves the strategies that are pioneered as the first mover advantage; however, these strategies have several disadvantages for being the first one in the market. The first movers should defend their position as leaders in the field of technology through appropriate regimes such as trade secrets, patents and necessary complementary assets. However, this option imposes higher capital costs. It is preferable that the company should license the technology for maximizing the research and spending for development of technologies; the cost of capitalization on innovation is high (Wheelwright and Christensen, 2009). According to Tushman and Romanelli (2008) second dimension relates to value chain stance. The technological strategies have the ability to affect the value chain. When there is shortage of resource or even resource constraint, the companies should use their competencies in order to ascertain the technologies for following or leading. This technology has the ability to influence their competitive advantage. The resource commitment stance addresses the amount of the resources that are applied to the research and development and technology. The organizational design stance aims at targeting the requirement for a steady approach that will highlight the priorities and is also associated with the technology strategy stance (Cordes, 2005; Tushman and Romanelli, 2008). The technology strategies are developed and changed on the basis of many evolutionary forces. The evolutionary processes that are considered, indicates the relation between tradition, history and inertia with social and individual learning processes. The technological changes occur due to changes in process, environment and product development. It also evolves due to invention of new technologies, which has the ability to influence competencies of the existing companies (Cordes, 2005). The strategic actions are basically based on the organizational learning that is identified with the help of present and historic data related to success. According to Cordes (2005), competency of the industry can be evaluated through Porter’s five forces along with the above mentioned dimensions. In the context of organization, there are internal selection forces, which have the ability to grab right opportunities that align with the strategies in the field of technology. However, these strategies are devised based on specific objectives and products or culture are developed based on these strategies, which have the capability to influence huge crowd (Cordes, 2005). According to Tushman and Romanelli (2008) the performance of technological strategies has developed feedback on the quality of the competencies of the company and whether the strategy is effective enough to assist the company in future. The feedback on the strategies helps the companies to change the technologies per requirement. Though this process is expensive but it is essential as it is related to competitive advantage. The technological strategies are devised after ascertaining the main technological tasks (Cordes, 2005). Such tasks can be external or internal technological sourcing; additionally, both of this has severe effect on the technological performance. The resource capabilities of companies are evaluated in order to observe whether funds are available for the research and developmental (R&D) activities. The R&D activities lead to creation of new technologies; hence funds for R&D are needed to a great extent. The R&D departments of every company have the responsibility to do research on the existing technologies and check whether any up gradation are needed or not (Tushman and Romanelli, 2008). According to Mosakowski and Earley (2000) the ability of internal R&D facility is observed to be the determinant of effectiveness of the company and whether it can assimilate and absorb the use of external technologies. The external sourcing of technologies is chosen when the internal sources are not available. The technological strategies have the ability to influence the decisions pertaining to technological acquisition and alliances and how the organizational learning is capitalized (Mosakowski and Earley, 2000). According to Durand (2001), deployment of technologies during the process of product development is significant in a company. Chang and Tsai (2000) have observed that technology intensive processes and products help in improving resource utilization, market position and organizational renewal. Nevertheless, many companies have specific frameworks that lead assists in developmental activities (Malerba, 2007). It also helps in integrating technological and product specific strategies. The technological tasks are dependent on the appropriate supports, which helps in providing communication channels between the users and technology. In some markets, innovation is encouraged based on the recommendations that are provided by the users. Hence, experiences in this field are obtained from the performance of the companies (Lynn, 2008; Durand, 2001; Boisot, 1995; Malerba, 2007). The literature suggests that technology strategy is devised with the help of generative forces and the evolution of such technological strategies is done with the help of integrative forces of the company. Example of Integrating technology and strategy: Dell The first portable laptop of Dell was unsuccessful as there were many defects. For developing a more wining portfolio, a NPD (New Product Development) structure was formulated within the company (Lynn, 2008). The companies devised strategies for differentiating the new laptops with the help of new battery technology. However, their suppliers, which included Sony, could not offer Dell reliable products during initial period of development. The innovative process of the Dell was concentrated on building relationships with the frequent users of laptops. It also aims at reducing the cost of production, mass customization, self-resolution and lower the inventory levels (Lynn, 2008). The supply chain management of the company is also an essential part of the operation. These strategies are formulated in order to increase the product quality and satisfy the customers so that they become loyal to their brand and recommend others. With the passage of time, the company changed their technological technologies strategies and tried to incorporate the consumer’s feedback. Dell not only supported the evolution of technological strategies but also included the suggestion of the users during the change process. The price war among the competitors and the business model of the company gave an opportunity to the company to build its own competitive advantage (Lynn, 2008). Dell had divided the NPD process into six phases. They are as follows: profile, planning, implementation, qualification, launch and acceptance phase. The NPD process helps the company to evaluate the performance of the products and it can even examine whether any changes are required in the process and in the technological strategies. The suggestions of the customers are also taken into account for deciding any changes in the technological strategies. Hence, the integration process helps the company to improve the product quality by emphasis on the technologies (Boisot, 1995). Conclusion Technological strategies are significant for the development of the competitive advantage for a company. However, evolution of these strategies are highly required so as to keep in pace with the changing environment, which is associated with modification of the existing technologies and invention of new one. The process of modifying an existing technology is expensive; as a result the evolution costs more to the company than to replace it. This change is needed by the company to as to integrate the opinion of the users and modify the products that will help it to grow faster. Reference List Boisot, M. H., 1995. Is your firm a creative destroyer? Competitive learning and knowledge flows in the technological strategies of firms. Research policy, 24(4), pp. 489-506. Burgelman, R., Wheelwright, S. and Christensen, C., 2009. Strategic management of technology and innovation. New Delhi: Tata McGraw-Hill Education. Chang, P. L. and Tsai, C. T., 2000. Evolution of technology development strategies for Taiwans semiconductor industry: formation of research consortia. Industry and Innovation, 7(2), pp. 185-197. Cordes, C., 2005. Long-term tendencies in technological creativity-a preference-based approach. Journal of Evolutionary Economics, 15(2), pp. 149-168. Dorf, R., 1998. The technology management handbook. Florida: CRC Press. Durand, R., 2001. Firm selection: an integrative perspective. Organization Studies, 22(3), pp. 393-417. Lynn, J., 2008. Integrating Technology and strategy: A General Management Perspective. Innovation and Technology Management, pp. 1-6. Malerba, F., 2007. Innovation and the evolution of industries. In Innovation, Industrial Dynamics and Structural Transformation, pp. 7-27. Mosakowski, E. and Earley, P. C., 2000. A selective review of time assumptions in strategy research. Academy of Management Review, 25(4), pp. 796-812. Tushman, M. L. and Romanelli, E., 2008. Organizational evolution. Organization change: A comprehensive reader, 155, p.174. Read More