Technology and Competitiveness

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Technology and Competitiveness

• Chapter 3

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Chapter Objectives

• This chapter will identify
• The influence of technology on competitiveness
• To find out about Porter's Generic Strategies
• The use of technology in strategic implementation
• The role of technology in the creation of wealth

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1-Introduction

• What are the mega trends that are increasing
  competitiveness?
• If one of the implications is that firms have to
  compete on the basis of technology, what do they
  need to know to do so? How does technology
  enhance competitiveness?
• To survive and grow firms must learn to compete
  on the basis of technology.

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2-The influence of technology on competitiveness

• Though a firm may have many strengths and
  weakness vis a vis its competitors, it attains
  competitive advantage either due to
• Cost advantage or
• Differentiation
• In a cost advantage strategy a firm tries to
  become the lower cost producer in the industry.
  However, its product must be seen as comparable
  to products of the quality and other expectations
  of the buyers.

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Porter's Generic Strategies
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• In differentiation strategy, a firm tries to
  produce something that is unique with respect to
  certain dimensions that are widely valued by
  buyers. The firm may position itself to cater to
  some or all of those dimensions. For providing
  these valued attributes the firm will charge a
  premium.
• Firms may adopt these strategies in specific
  segments of the industry and specialized in
  niches.
• In implementing these strategies a firm should
  look at the influence of technology on the
  following
• Its value chain and
• Its industry structure

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Uses of technology to implement business level
strategy

• Differentiate strategy
• technology help a firm to add value to product
  and services.
• case of ANZ Royal Bank uses technology to
  differentiate their services with competitor
• Provide client uses Internet access to act
• ATM (24/7)
• Online Transfer
• Buy Cellcard through ATM

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• Low cost strategy
• technology help a firm to cut down cost of
  production or service process.
• case of AirAsia Airline uses technology to cut
  down price of air ticket.
• Sale Directly (Online Booking)
• Bypass distributor (no commission added)
• Paperless ticket
• Reduce Overhead Cost (no building and sale agent)
  

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Group Discussion

• Discussion 1
• Do you know AirAsia Company?
• Why AirAsia can offer a low price fly in among of
  Airline Industry? How they do it?

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Group Discussion

• Discussion 2
• Suppose you are a manager of tourism company.
• If your company is a global firm (big) what
  strategy you will use to enter market? why? how
  to do it?
• If your company is a local firm (small) what
  strategy you will use to enter market? why? how
  to do it?

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3-The role of technology in the wealth creation

• Technology Creation of Wealth
• Technological development the most important
  source of economic growth
• Capital the 2nd most important source
• Physical and human capital

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Long-wave Cycle

• Discoveries in science create technological
  innovation.
• e.g. Einstein (from Stimulated Emission of Light
  -gt LASER)
• Technological innovation creates new products.
• New products create new markets and new
  industries.
• New industries continue to innovate in products
  and processes, expanding market? Create income
  and Job.

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4-Conclusion

• Achieving competitiveness through technology is
  the only way to attain sustained growth and
  profitability.
• This requires a firm to develop its technology
  strategy very carefully based on a good
  understanding of how technology can influence its
  competitiveness advantage.
• In implementing its technology based
  competitive strategy the firm must understanding
  the following
• How its technology is embodied in the firm
• How capable it is in utilizing and improving the
  embodied technology and
• How it can get the technology it needs

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Group Discussion

• How the following web site generate income
• www.Cellcard.com.kh
• www.Yahoo.com
• www.google.com
• www.Facebook.com
• www.eBay.com
• Reading and Answer the case study Alliance and
  technology race