Smti Outline 0.82

8/22/2019 Smti Outline 0.82

1/15

SMTI for 2013, v 0.8 1 Rajeev S, 4/13/2013

Version 0.82 (DRAFT SUBJECT TO CHANGE)

INDIAN INSTITUTE OF MANAGEMENT, BANGALOREPOST GRADUATE PROGRAM IN SOFTWARE ENTERPRISE MANAGEMENT

2013-14

(NOTE: ALSO OPEN TO PGP)

Strategic Management of Technology and Innovation

Faculty: Rajeev S. (AF) and Jyotinath Ganguly (GF)

email: [email protected],[email protected]

phone: 0-81290-35867 (not a bangalore number)

Dated: April 13, 2013

Course Objectives

To develop an awareness of the range, scope, and complexity of the issues andproblems related to the strategic management of technology and innovation.

To develop an understanding of the "state of the art" of the strategic managementof technology and innovation.

To develop a conceptual framework for assessing and auditing the innovativecapabilities of a business organization.

Course Introduction

Innovation is the lifeblood of winning organizations. As Indian technology firms move

towards positions of global market leadership, it becomes increasingly important for themto create sustainable competitive advantage based on the creativity of their employees.

They need to ensure that there is structure in house that encourages a continuous process

of intellectual property rights generation.

It is often said that Indian technology firms need to migrate up the value chain. While the

software industry was maturing in the 1990s and early 2000s, a pure services model

sufficed to ensure growth and profitability. However, looking into the future, it is likelythat a changed business model will be necessary for Indian firms to maintain their leading

edge status. This is because they are beginning to run into the limits of the outsourced

services model as well as into entrenched blue-chip competition. Even lower-costdestinations also beckon to the outsourcing customer. In terms of diversifying their


2/15


portfolios, Indian software firms will need to consider new product development activity

including intellectual property rights creation as part of their operational strategies.

One of Indias core competencies is the development of intellectual property.

Historically, India has been the source of many revolutionary ideas and concepts. It is

also universally acknowledged that Indian technical and managerial brainpower is amongthe best in the world. However, innovation and IPR generation have not been recognized

as important elements in company strategy in the recent past. This course considers aframework to create strategic change through technological innovation and internal

entrepreneurship.

It is necessary to forecast technology trends, anticipate customer needs, predict

competitor moves and strategies as well as environmental conditions and respond in

flexible ways via mid-course corrections. Business plan generation and implementation is

a combined product management and engineering activity.

There are very good examples in technology areas where Indian firms have managed tomake the conceptual leap from follower to leader by investing in R&D. The most visibleare the pharmaceutical industry and the automotive components industry. In the face of

intense global competition, Indian firms in both these sectors have done remarkably well

by leveraging Indian skills in engineering, reverse engineering, and re engineering. Inparticular, the pharmaceutical sector has remarkable for its rapid emergence as an IPR

generation machine.

Part of the learning experience is to consider the reinvention of the Indian softwareindustry as a technology driven, rather than purely services driven, entity. A major part of

this reinvention is the need to encourage and nurture the creative entrepreneurial energy

of individual participants at lower and middle levels in the organization. There is synergybetween greater professional success for individual and long term viability and

effectiveness of the firm in the marketplace. The first part of the innovation process is the

creation of a new idea. The emerging discipline of design thinking enables companiesto nurture out-of-the-box thinking, along with a strong focus on value creation from the

point of view of the end customer.

In addition to creating a strategy, it is important to translate it into an implementationframework and methodology on the ground that enables the firm to create an architecture

and a specific action plan. The fleshing out of an idea is the second part of the innovation

process, and we will consider this in detail in the course.

The actual process of protecting intellectual property is quite complicated. The course

will touch upon how to decide whether an innovation is novel enough and not obviousenough to be patentable. This is a complex legal matter, so the course can only offer a

birds-eye view of the legalities involved.

Finally, one of the most neglected areas in new product development is the act of selling

the idea to customers. The classic case is that of the product that excites the cognoscenti,


3/15


but fails to reach the mass market; the innovating company may face extinction, but an

industry giant that follows may make a huge business out of it. The course considers thebusiness of selling innovation, which is at least as hard as coming up with the innovation

in the first place. This is the third and final part of the innovation process.

Most, but not all, of the instances considered will be from the information technologyindustry, partly because it has seen rapid cycles of innovation and the concomitant

creative destruction, and partly because of the immediate relevance to many Indianfirms. Since the Case Study Method is best suited for critical analysis and problem-

solving, that is the method adopted in this course.

General Flow of the Course

There are four parts to the course.

Module 1: Technology strategy and innovative systems; design thinking

In this part of the course we will focus on how senior managers integrate knowledgeabout the key issues relating to the firm's technology with business and corporate

strategy. What are the various factors that impact a companys technology strategy? We

first focus on distinctive technological competencies and capabilities and how they drivetechnology strategy. We then examine the contextual forces that affect the evolution of a

companys technology strategy. These include the developmental trajectory of relevant

technologies, the firms industry context, the firms internal organizational context, and

the firm's strategic actions. We also consider how design thinking can be used as acompetitive weapon to arrive at potentially game-changing disruptions.

Module 2: An architecture for new product development

This part of the course deals with technology sourcing and corporate innovation. Here we

will examine the role of R&D in a companys strategic evolution, how to link corporateR&D to corporate strategy, and how to make sure that the output of corporate R&D is

transferred to other parts of the firm. This part of the course also examines the role of

corporate entrepreneurs and how to manage project champions/venture managers, and

what some of the organizational design and associated incentive issues are related tocorporate entrepreneurship. What are the key issues associated with new product

development? We also consider some of the key innovation challenges faced by

established firms. What are the conflicts inherent in having to manage these variouschallenges simultaneously?

Module 3: Intellectual property as key to creating unfair advantage

This part of the course provides an overview of the mechanisms for creating barriers to

entry via the development of intellectual property rights. There are a number of ways inwhich intellectual property can be generated and safeguarded. The most common

mechanism is that of patents. India has acceded to the WTOs patent conventions, and a


4/15


growing number of US and worldwide patents are being generated in India. What makes

an idea patentable? What are the procedures to follow in case you have a patentable idea?Is patenting less valuable to poorer nations? Are there alternative perspectives to

patenting and thereby extracting value from ideas?

Module 4: Value enhancement through consultative selling

This part of the course looks at the process of strategic selling. Although this is one of theareas least focused on in most business school curricula, it is an important part of the

process of creating perceived value for the customer. Much of the value of

technologically advanced products and services are derived from their inherentcharacteristics, yet it is possible to add value via the process of selling.

REQUIRED TEXTS

Burgelman, R. A., Christensen, C. M. and Wheelwright, S. C., Strategic Management of

Technology and Innovation, FIFTH Edition, McGraw-Hill/Irwin, 2009. (Called "BCW"in this course description.)

NOTE: the Fourth Edition is also available, but this course outline refers directly to the

Fifth Edition.

REFERENCE BOOKS (OPTIONAL READING)

Davila, T., Epstein, M. J., and Shelton, R., Making Innovation Work: How to Manage It,

Measure It, and Profit from It., Wharton School Publishing/Pearson Education, 2005.

There are two copies in the Library.

Grove, Andrew S., Only the Paranoid Survive, Harper Collins Business, 1997

Moore, Geoffrey A., Crossing the Chasm, Harper Collins Business, 1991

Moore, Geoffrey A., Inside the Tornado, Harper Collins Business, 1995

Bronson, Po, The Nudist on the Late Shift, Random House, 1999

Collins, Jim, Built to Last, Harper Collins, 1994

Collins, Jim, Good to Great, Random House, 2001

Ghoshal, Sumantra, Managing Radical Change What Indian Companies must do to

become world-class, Viking, 2000

Porter, Michael E., Competitive Advantage, The Free Press, 2004

Pressman, David, Patent It Yourself, Tenth Edition, Nolo Press, 2004


5/15


Rackham, Neil, Rethinking the Sales Force, Tata McGraw-Hill, 2001

Target Audiences

This course is designed with the following audiences in mind:- People who are interested in becoming general managers in firms where

technology is an important part of business and corporate strategy;

- People who want to understand the logic of innovation in large, complexfirms because they anticipate that they will have to deal with such firms ascompetitors or potential acquirers of the small firms in which they intend to work;

- People who expect to become involved in internal corporate ventures;- People who expect to become involved in high-tech venture capital.

Attaining the Course Objectives and Evaluation

To pursue the course objectives effectively, the following are required:

a. Preparation and discussion of cases in class;

b. Readings and lectures

c. Mid-term exam and final exam

a. Preparation and discussion of cases

You are required to form study groups of three or four people. Please hand in

the list of the study group members at the beginning of session #4.

The assignments for a class should be prepared in advance of that class. Theprescribed textbook will not be covered through a lecture in class, and participants are

expected to have read the specified reading material before the session.

The case assignments require the identification of key issues, problems, and

opportunities; the articulation and evaluation of alternative approaches to deal with the

identified problems; the selection of a preferred strategy; and the formulation of a

concrete action plan to implement the strategy. Preparation questions for each case havebeen provided or will be handed out in class. However, these are merely meant as

guidelines and are not exhaustive; fresh insights and perspectives are welcome.

In a typical class, one or more participants (from different study groups) will be

asked to start the class by answering a specific question. Anyone who has thoroughly

prepared the case with written conclusions should be able to handle such a lead-offassignment. After a few minutes of initial analysis, we will open the discussion to therest of the class. As a group, we will then build a complete analysis of the situation and


6/15


address the problems and issues presented in the case. We will also spend time

discussing the implementation of those recommendations.

Most general managers spend very little time reading, and even less time

writing reports. The vast majority of their interactions with others are verbal. For this

reason, the development of verbal skills is given a high priority in this class. Theclassroom should be considered a laboratory in which you can test your ability to

convince your peers of the correctness of your approach to complex problems and ofyour ability to achieve the desired results through the use of that approach. Some of the

things that have an impact on effective class participation are the following:

- - Is the participant a good listener?

- - Is the participant willing to interact with other class members?

- - Are the points that are made relevant to the discussion? Are they linked to

the comments of others?- - Do the comments add to our understanding of the situation?

- - Does the participant distinguish among different kinds of data (i.e., facts,opinions, beliefs, concepts, etc.)?- - Is there a willingness to test new ideas, or are all comments "safe"? For

example, repetition of case facts without analysis and conclusions.

b. Readings and Lectures

Case discussion and project activities will take place against a background of

conceptual material that is acquired through selected readings and brief lectures. Thereadings are listed in the course outline.

Some of the readings are taken from leading academic publications in strategicmanagement, economics and organization theory and are somewhat technical. They

refer to bodies of preceding research and discuss at some length the research

methodologies employed. Do not be discouraged by these technicalities. Ask yourselfwhat the key insights and findings of each reading are. Write these down. Try to relate

them to the case for the day. But, more importantly, try to relate them to the key ideas

of other readings in the course.

Note on the cases. The course has a mixture of mostly new and a few "classic"

cases. The latter ones offer the opportunity to discuss fundamental and timeless issues

and challenges faced by technology-based companies. Please study them in that spiritand do not dismiss them out of hand simply because they seem "old." Ask yourself - as

we will in class - What can I learn from this situation that is generalizable to companies

that I am interested in today?

c. Exams


7/15


The one-hour mid-term exam will cover roughly the first 10 class sessions.

Questions will be drawn from both the cases and the readings, as well as any additionalmaterial handed out in class, and class discussions. The exams seek the assess the

participants learning and mastery over the course materials.

The final exam (2 hours) will be based on a case not discussed in class.

Grading Policies

Your course grade will be based on class participation and the field project:

Cases and Class Participation 25%

Mid-term Exam 25%

Final Exam 50%

Behavioral Expectations

The following reflect general expectations as to class behavior:

1. In case you need to miss one class, please provide advance notice by

means of email or, if you could not provide advance notice, an emailnote afterwards to explain the absence. If you do miss a class, it will

be your responsibility to find out from your classmates what materialswere covered, what additional assignments were made, and what

handouts you may have missed.

2. I will be prepared for every class and expect that you will be too. You

should let me know before the start of class if some emergency has

made it impossible for you to be adequately prepared for that class .

3. Please use a name card. I will pass around a seating chart during the

second class session and expect that you will use the same seat from

then on.

4. For purposes of general case preparation, you should not use others' notes

or papers from other courses where these materials might have beentaught. Such use is considered a violation of the IIM-B Honor Code. If

you personally have actually had one of these cases previously, you are

certainly free to use your own prior notes on that material, but you are

encouraged to rethink the case within the context of this course, since itmay be somewhat different from how you saw it previously.

5. Group work is encouraged for case preparation. Every member of the group willget the same grade for classroom presentation of cases.


8/15


CLASS ASSIGNMENTS

All materials, except those to be handed out in class, are included in the Burgelman,Christensen and Wheelwright (BCW) textbook, except as indicated. Some new materials

will be handed out in class.

Session 1: TBD

Course Introduction

Class Expectations

Instructor Expectations

Readings: "Technology, Innovation, and Strategy: A General Management

Perspective" (BCW, pp. 1-12)

Profiting from Technological Innovation: Implications for Integration,Collaboration, Licensing, and Public Policy" (BCW, p. 32-48)

Session 2: TBD

Case: Advent Corporation (BCW, pp. 49-61)

Readings: "The Core Competence of the Corporation" (BCW, pp. 66-67)

Preparation Questions:1. What are the key elements in Advent's strategy? How successful has Advent been?

Why?2. What are Advent's distinct technological competencies? Please construct a matrix

showing the technological competencies embodied in the different segments of the audio

business. How is this different for the video business?3. What are the key issues and problems facing Advent? Please prepare a detailed action

plan.

4. Characterize Kloss's style as a general manager. Does he need to change? How?

Session 3: TBD

Case: Elio Engineering, Inc. (A) (BCW, pp. 13-31)

Reading: (unrelated to the case) Global Innovation 1000: How TopInnovators Keep Winning, strategy + business, 2010, please read it atthe following URL:


9/15


http://www.booz.com/media/file/sb61_10408-R.pdf

Preparation Questions:

1. What is the structure of the automotive seat industry in 1998? How attractive is this

industry?2. What are the potential sources of competitive advantage that Elio Engineering has?

How sustainable are they? Why/Why not?3. What are Elio Engineering's strategic options in entering the automotive market?

Please evaluate these options and reach a conclusion on the most attractive one.

4. How well is Elio Engineering's technology strategy aligned with the requirements for asuccessful entry into the automotive seat market? What, if anything, should they change?

Session 4: TBD

Case: Electronic Arts in 1995 (BCW, pp. 164-279)Electronic Arts in 2002 (BCW, pp. 180-199)

Reading: Defining the Minimum Winning Game in High-Technology Ventures

(BCW, pp. 140-153)


1. In 1995, what are the key characteristics of the video game industry? In which ways isit similar/different from the movie industry?

2. Until 1995, how successful has EA been? Why? What is the basis of their competitive

advantage?3. Until 1995, what has been EA's technology strategy? How is it linked to their business

strategy?

4. In 1995, how should EA top management think about the platform developmentdecisions it faces?

5. By 2002, how has the Internet affected the video game industry? How does it affect

EAs corporate strategy? What should EAs corporate strategy be for the next 5 years?

Why? How execute the strategy?

Note: List of group members, your course expectations and background mail

(100 words) also due. These can be sent out by email to [email protected]

Session 5: TBD

Case: Pixim (A)

Reading: "Management Criteria for Effective Innovation" (BCW, pp. 97-105)


10/15


Please also revisit earlier reading Defining the Minimum Winning Game in High-

Technology Ventures (BCW, pp. 140-153)


1)

Examine the strategic situation at Pixim in 2001 before Siegel joined:- Where are they in the stages of development of new ventures?- What has been the main driver of their strategic actions so far?- How well is their strategy diamond defined? (What is the company

saying? What is the company doing? What will it take for them to win

(given their product-market position)? What has the company got(distinctive competence)?)

- How well are they doing?2) Why did Weinschenk reach out to Siegel? Why did Siegel agree to join Pixim?3) What are the key things that Siegel needs to find out quickly? Is Pixims

technology disruptive? Why or why not?

4)

How did Siegel go about providing a structured analytical process for decidingwhich market(s) to focus on first?As a result of the more disciplined analytical process, what should Siegel conclude about

Pixims first minimum winning game (MWG)? Why? What are the implications of this?

Session 6: TBD

Guest Lecture: Design thinking

Topic: How can you use the techniques of design thinking profitably in your company?

Session 7: TBD

Readings: "Intraorganizational Ecology of Strategy Making and OrganizationalAdaptation" (BCW, pp. 511-528)

"Strategic Intent" (BCW, pp. 550-561)

Gunfire at Sea: A Case Study of Innovation (BCW pp. 431-441)

Case: None

Session 8: TBD

Case: Eli Lilly and Company: Drug Development Strategy (BCW, pp. 415-430)

Readings: Note on New Drug Development in the United States (BCW, pp. 410-

414)


11/15



1. What are the environmental factors facing the pharmaceutical industry especiallyin the US? What is Eli Lillys strategic response to these?

2. Compare the various competitors balance sheet summaries in Exhibit 4 (page418). Compare R&D expenses and net earnings as a % of sales. How do you

account for the discrepancies in return on equity?3. Diagram the new product development process in place at Eli Lilly as applied tothe migraine project. What are the advantages and disadvantages you can see inthis process? Compare this to the process in a smaller firm, example Advent (and

Kloss) in an earlier case.

4. What are the human factors issues creating resistance to the new techniques ofcombinatorial chemistry and high throughput screening? Compare this to the

issues in the reading Gunfire at Sea

5. What are the possible financial implications of gaining first mover advantage?See Exhibit 9. On the other hand, what is the downside of bringing an immatureproduct to market?

6.

What would you recommend to the PTAC if you were Bianca Sharma? Why?

Session 9: TBD

Case: SAP America (BCW, pp. 348-361)

Reading: Crossing the Chasm and Beyond (BCW, pp. 362-367)


1. What are the external and internal forces that explain why SAP America has grown so

rapidly? What are the challenges associated with this explosive growth?2. What are the key features of SAP's approach to partnering, sales, and consulting? What

are the advantages and potential disadvantages of this approach?

3. What is your evaluation of the new organization? What problems was it designed tosolve?

4. As Eileen Basho, what is your action plan for dealing with the strategic and

organizational challenges that you face? Be specific!

Session 10: TBD

Case: Hewlett-Packard: The Flight of the Kittyhawk (BCW, pp. 529-540)

Readings: "Architectural Innovation: The Reconfiguration of Existing Product

Technologies and the Failure of Established Firms"(BCW, pp. 441-454)

Preparation Questions:1. Who were the key players in the emergence of the Kittyhawk project? What did each

of them contribute?


12/15


2. What are the strengths and weaknesses of the way Hewlett-Packard structured and

supported the Kittyhawk development team?3. Why did Hewlett-Packard pursue the Kittyhawk project this way? What should they do

differently if they could do it over?

Session 11: TBD

Mid-term Examination (1 hour)

Discussion: The Fortune at the Bottom of the Pyramid Innovation for the poor, or anexaggeration?

C K Prahalad Fortune at the Bottom of the Pyramid

http://www.cs.berkeley.edu/~brewer/ict4b/Fortune-BoP.pdf

CK Prahalad The Innovation Sandboxhttp://www.strategy-business.com/press/freearticle/06306

Fortune at the Bottom of the Pyramid: A Mirage

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=914518

Fortune at the Bottom of the Pyramid: An Alternate Perspective

http://www.iimahd.ernet.in/publications/data/2007-07-13Jaiswal.pdf

Session 12: TBD

Case: Hewlett Packards Merced Division (BCW, pp. 233-244)

Reading: "Customer Power, Strategic Investment, and the Failure of Leading

Firms" (BCW, pp. 245-264)


1. In summer 1998, what is the position of the Enterprise Server Group (ESG) in its

industry? How has it evolved? Why?2. Why did HP get involved in developing the IA-64 architecture?

3. Who will benefit the most from the introduction of the Merced chip in the markets

served by ESG? Who will benefit the least? Why?4. In summer 1998, what should Jim Davis recommend?

Session 13: TBD

Guest Lecture: Jugaad and industrial strength innovation


13/15


Topic: What steps can you follow to create lasting, scaleable, replicable, and high-qualityinnovation?

Session 14: TBD

Case: 3M Optical Systems Division: Managing Corporate Entrepreneurship(BCW, pp. 902-914)

Reading: The New Product Development Map, BCW pp. 1089-1098


1. Put yourself in the position of Andy Wong. In January 1992, what are your options for

securing continued funding for the venture? Make a decision regarding those options andprepare an action plan.

2. Put yourself in the position of Paul Guehler. What will you do if Wong decides to askfor further funding for the Multiprotection Filter? Why?3. How does Wong's effort fit within the 3M culture in 1992?

4. In the end, what are the key factors of 3Ms corporate entrepreneurial capability? What

are the transferable features? Which features are difficult to transfer?

Session 15: TBD

Case: Cisco Systems, Inc.: Acquisition Integration for Manufacturing (A)

(BCW, pp. 745-761)Reading: Enactment of Technology StrategyDeveloping a Firms Innovative

Capabilities (BCW, pp. 657-670)


1.What are the most important elements (criteria, processes, specific actions, etc.) of

Ciscos approach to selecting and integrating acquisitions? Why?

2. How can Cisco improve its acquisition selection and integration process? What shouldthey add or modify? Why?

3. What are the specific challenges of the Summa Four acquisition? How well does the

Cisco process address these challenges? Why?

Session 16: TBD

Case: PlaceWare: Issues in Structuring a Xerox Technology Spinout

(BCW, pp. 762-772)

Reading: The Lab That Ran Away From Xerox (BCW, pp. 671-674)


14/15


Preparation Questions:1. Why has Xerox chosen to commercialize PlaceWare outside of Xerox? Do you agree

with their rationale? Why or why not?

2. Which option should Bruce recommend for structuring the spinout of PlaceWare?

3. Why should the PlaceWare development team support your recommended choice ofstructure? How important is it that they support you?

4. What valuation would you give to PlaceWare in June of 1996? What percentage of thatvalue should Xerox expect for its intellectual property? Why?

Session 17: TBD

Case: Product Development at Dell Computer Corporation (BCW, pp. 957-970)

Reading: Organizing and Leading Heavyweight Development Teams (BCW,

pp. 1012-1023)


1. How does Dell Computer differentiate itself from its competition in the desktopmarket? What is its business strategy and its core competence? How is it able to

appropriate value from its innovations?

2. What are the advantages or disadvantages of Dells new product developmentprocess as compared to others you have seen such as Cisco or 3M? Whatimprovements would you recommend?

3. What are the possible choices before Mark Holliday at the time of the case? Whatwould you recommend and why? What are the risks (including financial)associated with your choice?

Session 18: TBD

Lecture: The Patenting Process

Reading: Finding the Balance: Intellectual Property in the Digital Age (BCW, pp.

398-410)

Session 19: TBD

Lecture: Generating Value through the Selling Process

Reading: The Three Emerging Selling Models and The New Consultative

Selling (Rackham, Rethinking the Sales Force) (To be handed out inclass)


15/15


Session 20: TBD

Case: MySQL Open Source Database in 2004 (BCW, pp. 284-304)

MySQL Open Source Database in 2006 (BCW, pp. 304-309)

Readings: "How Can We Beat Our Most Powerful Competitors?" (BCW, pp. 310-

330)


1. How successful is MySQL? Why?2. Identify different segments of the DBMS market. What differences exist between

these segments, eg., in customer needs and expectations?

3. Analyze the DBMS industry in which MySQL operates. How attractive is it?Consider the different market segments you have identified in your analysis.

4.

What are the competitive advantages of MySQL and how sustainable are they?Quantify these advantages to the extent possible in the identified marketsegments.

5. At the time of the 2004 case, what is the stated strategy of MySQL? What strategyis implied by the companys actions? How consistent are the strategic actions withthe stated strategy?

6. What are MySQLs strategic options beyond 2004? What option should MySQLchoose?

7. How is MySQLs open source model different from Linux OSS model, and whatare the implications of this?

8. In 2006, how has the market changed? Does this favor MySQL or its competitors?

Course Evaluation

Course Summary

Final Exam: TBD

Documents

Smti Outline 0.82