Laboratory for Machine Tools and Production …Production Management A – Winter Semester 2009/10 Technology Management 1 p. 2 Exercise 1 Aims of this exercise: It is the goal of

Production Management A – Winter Semester 2009/10

Technology Management 1 p. 0

Exercise 1

Laboratory for Machine Tools and Production Engineering

Chair of Production EngineeringProf. Dr.-Ing. Dipl.-Wirt. Ing. G. Schuh

Chair of Production ManagementProf. Dr.-Ing. A. Kampker

Production Management A

ExerciseTechnology Management 1

Organisation:

Dipl.-Wirt.-Ing. Christoph Haag

Steinbachstr. 17Room 247

Tel.: [email protected]



Exercise 1

Index:

Index Page 1

Aim for this exercise Page 2

Exercise Page 3

Introduction of the DisplayTec Page 3

Identification and classification of technologies Page 6

Technology assessment by S-Curve Page 9

Sales development and market share Page 12

Technology portfolio by McKinsey Page 15

Technology portfolio by Arthur D. Little (ADL) Page 23



Exercise 1

Aims of this exercise:

It is the goal of the first exercise of the technology management block of lectures to deepen the insights from the lecture and to give an industrial example for the portfolio techniques. Schriftgröße 12



Exercise 1

Page 3© WZL/Fraunhofer IPT

Structure

Introduction of the DisplayTec1

Identification and classification of technologies2

Technology assessment by S-Curve3

Sales development and market share4

Technology portfolio by McKinsey5

Technology portfolio by Arthur D. Little (ADL)6

Notes:



Exercise 1


Business areas and products of DisplayTec

The company DisplayTec isworking in the area ofentertainment electronics. DisplayTec offers productsin to strategic business areas:

1) display technology2) Play-back and recording

devices

New research effortsfocus on the development of picture foils

Television

business areas products

Monitors

Mobile phone-Displays

LCD/ TFT-Displays Handhelds

picture foils 3-D glasses

Helmet visors

Monitors

play-back devices

CD-Recorder

DVDrecorders

Notes:



Exercise 1


Short summary DisplayTec The DisplayTec has a high technological competence in the

monitor business especially in the LCD/ TFT-technology. Therefore the DisplayTec could achieve high sales with their monitor business.

The business with the play-back and recording devices is decreasing very fast. The DisplayTec has not been able to develop any competencies in the hard disk technology. At this time their development department only have the CD/DVD-technology at its disposal in which it has a leading position too.

The efforts for research and development are mostly spend to develop picture foils (OLED=Organic light-emitting diode).

There are no predictions for sales expectations available for this new foil technology. Only two competitors are working on this technology and they were not able to develop a prototype yet. The DisplayTec plans to launch the first products in about two years.

Notes:



Exercise 1


Structure







Notes:



Exercise 1


Classification of Technologies

high

lowlow high

Dimension of market penetration

Embryonictechnologies

Pacemakertechnologies

Keytechnologies

Fundamentaltechnologies

Displacedtechnologies

Notes:



Exercise 1


Identification and classification of technologies

Fundamental technologies

Displaced technologies

Key technologies

Pacemaker technologies

5321

Monitor technologies

Competitive technologies

Play-backrecording devices

PlasmaFoils

LCD/ TFTPicture tube

14

3

CD/DVD Recorder

Harddisk recorder

2

5

4

Notes:



Exercise 1


Structure







Notes:



Exercise 1


Competitive technologies: Monitor technologies

Technologyperformance

picture tube technology

A

BLCD-/ TFT technology

Lock-in

Lock-out

Limit of the new technology

Limit of the old technology

accumulated R&D effortnote: qual. illustration

Notes:



Exercise 1


Competitive technologies: Play-back/ recording devices

tape technology

A

BCD/ DVD technology

Technologyperformance

Limit of the new technology

Limit of the old technology

accumulated R&D effortnote: qual. illustration

Notes:



Exercise 1


Structure







Notes:



Exercise 1


Sales predictions

Predicted sales for monitors worldwide (Bil. EUR)

2008 2010 2012 2014

80

60

40

20

time

Picture tubesLCD/ TFT Displays

Predicted sales for play-back/ recording devices worldwide (Bil. EUR)

2008 2010 2012 2014

30

20

10

time

CD/DVD-recordersHarddisk-recorders

Notes:



Exercise 1


Market shares

market shares monitors market shares recorders

0%

5%

10%

15%

20%

25%

30%

35%

40%

Soly Pamanese BH Higgins DisplayTec

0%

5%

10%

15%

20%

25%

30%

35%

40%

Soly Kemping BH Higgins DisplayTec

figures are fictitious

Notes:



Exercise 1


Structure







Notes:



Exercise 1


Technology portfolio by McKinsey lo

wm

idd

leh

igh

Mar

ket

attr

acti

ven

ess

tech

no

log

y at

trac

tive

nes

s

low middle high

low

mid

dle

hig

h

low middle highrel. market position rel. technology position

A

C

D

BM

arke

t p

rio

rity

technology priority

low

mid

dle

hig

h

low middle high

A: Defensive R&D effort

B: Aggressive R&D effort

C/D: Selective R&D effort

Notes:



Exercise 1


Steps for the technology portfolio by McKinsey

Identification of important

technologies

Placing the technologies

into the technology-

portfolio

Placing the business areas

into the market portfolio

Combination to an integrated portfolio andderivation of R&D-priorities

identification of important technologies by theS-curve-analysis. Under considerations of substitution technologies.

technology attractiveness: technical potential and effort for further technical progress. technology position: Know-how-basis of the company compared to the competitors and the relative costs of the technical progress.

Technology- and market portfolio are combined to an integrated portfolio, which compares market- andtechnology priorities.Depending on the portfolio positions R&D-recommendations are made.

Enter the strategic business areas of the company into the portfolio depending on market attractivenessand relative market position.

Notes:



Exercise 1


Market portfolio

Market attractiveness

1) LCD technology

2) CD/DVD technology

3) Foils technology

Relative market position

1) LCD technology


3) Foils technology

low

mid

dle

hig

hlo

wm

idd

leh

igh

Mar

ket

attr

acti

ven

ess

low middle highlow middle highrel. market position

Notes:



Exercise 1


Technology portfolio

Market attractiveness

1) LCD technology


3) Foils technology

Relative market position

1) LCD technology


3) Foils technology

tech

no

log

y at

trac

tive

nes

slo

wm

idd

leh

igh

low

mid

dle

hig

h

low middle highlow middle highrel. technology position

Notes:



Exercise 1


36

9

mar

ket

attr

acti

ven

ess

tech

no

log

y at

trac

tive

nes

s

3 6 9

36

9

3 6 9relative market position relative technology position

Mar

ket

pri

ori

ty

technology priority

612

18

6 12 18

Combining the portfolios (examples)By adding the values it follows:

Notes:



Exercise 1


Which strategies could be derived for each technology?

Please name an example for a strategy for each technology

Results technology portfolio by McKinsey

Notes:



Exercise 1


DisadvantagesAdvantages

Advantages and disadvantages of the technology-Portfolio by McKinsey

Integration of market- and technology-view

Registration of disruptive technological changes

Displaying of inconsistencies between market- and technology potentials

Derivation of R&D-priorities possible

No differentiation between product-, process- and material technologies

Technological synergies between the regarded business areas are not regarded

Technology priority and development potential are made equal

A derivation of a technology strategy is not considered

Notes:



Exercise 1


Structure







Notes:



Exercise 1


Technology life cycleR

elat

ive

tech

no

log

y p

osi

tio

nAcqui-sition

cost reduction

Retreat cost reduction

Coope-ration

Presence Leader-ship

Focussing

Pre-sence

Acqui-sition

cost reduc-tions

Coope-ration

Focuss-ing

Leadership

weak favourable strong

wea

kfa

vou

rab

lest

ron

g

Technology position

Co

mp

etit

ive

po

siti

on


wea

kfa

vou

rab

lest

ron

g

Technology position

Co

mp

etit

ive

po

siti

on

Technology portfolio by Arthur D. Little (ADL)

wea

kfa

vou

rab

lest

ron

g

Genesis Growth Mature

R&D-investments in technologies

increasingR&D risks

Notes:



Exercise 1


Steps for the technology-Portfolio by ADL

Classification of

technologies

Classification of the relevant technologies in fundamental-, key,- pacemaker- and new technologies. Derivation of the current and the future technology potential.

Derive the technolo-

gical position of the

company

Positioning of the

technologies into the portfolio

Derivation of R&D-priority

and -risks

Compare market- and technology-

position

Derivation of technology strategies

Determine the companies' technological position. Indicators are for example: internal know-how, patents, R&D efficiency, ….Comparison of the technology life cycle with branch life cycles of the business areas.

Positioning the relevant technologies into the portfolio by:- the relative technological position - and the technology life cycle of the regarded technologies as a measure for its attractiveness and its competitive relevance.

Indicates the risk of R&D-projects and give clues for R&D-priorities. The R&D-risk is included by determining investment priorities.

Identification of chances and risks for the competitive position of a strategic business area from the incongruities between market- and technology-position of the relevant key- and pace maker technologies.

Derivation of explicit guidelines for the technology-strategy. Points out the strategies in two different portfolios dependent on the technology life cycle.

Notes:



Exercise 1


Technology portfolio by ADL

Technology life cycleR

elat

ive

tech

no

log

y p

osi

tio

n


wea

kfa

vou

rab

lest

ron

g

Technology position

Co

mp

etit

ive

po

siti

on


wea

kfa

vou

rab

lest

ron

g

Technology position

Co

mp

etit

ive

po

siti

on

wea

kfa

vou

rab

lest

ron

g

Genesis Growth Mature

Notes:



Exercise 1


Technology strategy

Which technology is the one with the highest R&D-risk? Which technology is the one you have to invest in referring to the ADL-Portfolios? Why?

Deduce the technology-strategies for the technologies 2 and 3.

Notes:



Exercise 1


Advantages and disadvantages of the technology-Portfolio by ADL

DisadvantagesAdvantages

Differentiation of the technologies by its life cycle position

Considers aspects of the technological ability and of the different technology sources

Consistency analysis between competitive and technology strategy

Consideration of the R&D-risk

Problematic identification and interpretation of the technology-life cycle-phase and -characteristics

It is difficult to determine the single relevant technologies

Notes:



Exercise 1


Critical assessment of the portfolio-methods

All models are strongly simplistic

Die significance depends on quality, completeness and correct processing of the information.

Qualified discussion instead of not reflected key figures:

Risk of a not reflected orientation of the strategy from the portfolio's results.

Situation specific circumstances have to be considered.

It is not possible to ascertain complex coherences by single portfolio analysis

Strategic independent organisational units are assumed

Permanent growth is assumed

Portfolios are especially suitable for a simplified description of the actual and the target situation

The results of the portfolios should be used for further discussions and deeper analysis

Notes:



Exercise 1


Structure







Notes:

Documents

Laboratory for Machine Tools and Production …Production Management A – Winter Semester 2009/10 Technology Management 1 p. 2 Exercise 1 Aims of this exercise: It is the goal of