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Technology and Competitiveness


Chapter 3 Technology and Competitiveness – PowerPoint PPT presentation

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Title: Technology and Competitiveness

Technology and Competitiveness
  • Chapter 3

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

  • What are the mega trends that are increasing
  • 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.

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.

Porter's Generic Strategies
  • 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
  • Firms may adopt these strategies in specific
    segments of the industry and specialized in
  • In implementing these strategies a firm should
    look at the influence of technology on the
  • Its value chain and
  • Its industry structure

Uses of technology to implement business level
  • 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

  • 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)

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?

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?

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

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

  • Achieving competitiveness through technology is
    the only way to attain sustained growth and
  • 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

Group Discussion
  • How the following web site generate income
  • Reading and Answer the case study Alliance and
    technology race