TECHNOLOGY

Importance for Businesses

0Reduce business costs.

0Help automate back office functions such as record keeping, accounting and payroll.

0 Create secure environments for maintaining sensitive business or customer information.

0As it is quite user friendly, businesses can adopt easily.

Functions

0 Increase employee productivity.

0 Process more information.

0Reduce human labour.

0Expand operations.

0Better production output

Facebook generates revenues from advertising, using the platform of over 500 million users.

Low-cost airline generates revenues by selling direct to consumers (avoiding intermediaries) with

a high proportion of bookings made online

Technology mechanismsTechnology Mechanism How It Potentially

Creates an AdvantageExample

A new process Produce faster, at lower cost or better quality

Online video streaming

Solve a complex problem Do something competitors find hard to master

Google search engine

A new product The first product to market

The iPad & iPhone

Protect a valuable idea Have something others can only sell if they pay for a license

Pfizer’s Viagra

Rewrite the rules A completely new approach which makes other products and markets redundant

Smartphones

Technology as Threat

Technology as Threat

Technology

Three Main

Options

In-house Development

Alliances

Acquisition

In-House Development

0 Favoured if technology is a key competitive advantage.

0 Commercial and financial risk.

0Experience of first-mover advantage.

0 Strong insight into technology and

market needs.

Alliances

0 ‘Follow and Imitate’ rather than Market innovator.

0New technology beyond the skill and experience of the business.

0Helps limit commercial and financial risk.

0Outsourcing.

Acquisition0 If technology is complex.

0High risk-have to be sure that the right technology is being bought.

0Often important if speed is important.