Assignment-2 (Case Study Review) Submission Date by students: Before the end of Week-11 Place of Submission: Students Grade Centre Technological Innovation Strategy: A Case Study in Brazilian Subsidiaries of MNCs The process of technology strategy formulation in two cases of Brazilian subsidiaries from telecom industry. One company belongs to the equipment layer (EQUIPCOMPANY), and the other to the network layer (NETCOMPANY). In EQUIPCOMPANY, technology strategy and corporate strategy are formulated in conjunction, and the subsidiary is involved in the creation of global products. The main advantage of this approach is the alignment around a common vision and the synergy created among subsidiaries. However, the subsidiaries’ autonomy to create innovations highly adapted to a specific country is limited. In NETCOMPANY, the technology strategy derives from the marketing vision of the future, and the Brazilian subsidiary can define its own strategy, merely requesting parent company approval for implementation. This approach brings agility to decision making and allows its subsidiaries to create innovations highly adapted to local specific needs. Nevertheless, NETCOMPANY faces poor coordination among subsidiaries, possible duplication of work and investment, and a lack of synergy and collaboration on innovation projects. EQUIPCOMPANY is a global company with revenues of over US$ 15 billion. About 15% of this value is invested in R&D. It belongs to layer I of the Fransman (2002) model, developing equipment and network services for telecom service providers. It has about 60,000 employees, 16,000 of which are involved in research and development, including individuals from the customization team, responsible for adapting its solutions to specific customer needs. EQUIPCOMPANY has a matrix organizational structure. There are three business units, each responsible for a set of products and services. Moreover, the company is structured in seven global regions, each with a corresponding regional director. Therefore, it is very common that an employee reports to a regional head and to a head of the business unit. (Read the full case study in attached file and give your answers) Questions: Q.1- Review the case study and write a conclusion in your own words. Conclusion should include your opinion and suggestions regarding implementation of Technological Innovation Strategy in concerned companies. (250-300 Words) Q.2- Based on your case review; give some more ideas and possible approaches for improving the concurrent engineering process or new product development process (concerned to telecom industry). (200-250 Words) Q.3- Explain various methods and approaches for collecting facts and figures for evaluating risk in new product development process. Moreover, how companies use information technology as tactical resource for managing issues in organization. ( 300-350 Words)

Q.1

Companies involved in the production of high tech goods and services run an inherent risk. Hence, their technological strategies must serve both organizational goals and similarly the global strategy of the company. A corporate innovation strategy prevents different departments and subsidiaries from pursuing conflicting priorities (Masalu et al., 2012). The adopted approach must therefore also ensure that the company remains competitive in the market. The two companies used several models including Michael Porter’s five forces model to formulate technological strategies for both NETCOMPANY and EQUIPCOMPANY. This formulation strategy ensured that the technology innovation strategy remained flexible to allow updates throughout implementation which is paramount if the plan is to succeed (Masalu et al., 2012). These two companies are in different layers of Fransman model. However, their roles are interdependent with one being the global creator and the other adopting the technology created by the other.

In the case study, EQUIPCOMPANY formulates the technology and the corporate strategy concurrently. Equipcompany, therefore, has sufficient time to tweak their five-year plan twice a year after analyzing the performance against the company goals and strategy. These strategies facilitate network layer innovations. The company is, therefore, an international creator (Masalu et al., 2012). NETCOMPANY, on the other hand, has a different approach to technology strategy. Their method allows for the subsidiaries to create a technology strategy in line with the parent’s corporate strategy and innovate tailoring the services to local needs. According to Masalu et al., NETCOMPANY needs to innovate, but with attention to making correct decisions on technologies that will have wide acceptance, product variety, and slower obsolescence (2012).

 

Q.2

Have appropriate resources

The resources at the company’s disposal ultimately decide how much is allocated to new product development and the R&D departments. These resources required for successful development include knowledge of technology, market, consumer, product development activities and decision-making skills (Masalu et al., 2012). Resources to conduct analyses are also valuable. While the company can have vast amounts of resources at their disposal, their appropriateness is also necessary. People who know what they are working on and what they need to bring it to completion are essential in the new product development process.

Supportive Organizational Climate.

Management needs to support the whole R&D department and ensure there is a managerial commitment to fulfilling their needs to the best of their abilities. The organization also needs to clarify the direction the innovation is supposed to take to align their strategy and policies in helping the innovation process successful (Masalu et al., 2012). Management can offer incentives and rewards and also set standards for the department to promote the competitiveness of the final product.

Balance the innovation portfolio

For innovation to be successful, there needs to be a laid-out plan in how the final product of the process will be developed. According to Masalu et al., the organization, therefore, needs to fulfill the following criteria: a reasonable degree of novelty in the concept, sufficient level of technology in the telecom industry, desired return on investment and a fair degree of risk (2012).

Q.3

Data Collection for Risk Evaluation.

Risk identification and analysis is imperative in the new product development process. The risk evaluation and data collection procedures vary, and there is no one way to do it. The company must choose the most appropriate methods based on their informational needs. Brainstorming is one method of risk evaluation. The team can brainstorm based on the data they collect from credible sources such as competitors and customers. To gather facts and figures the companies can use checklists, questionnaires, and surveys or a combination of any of the above data collection methods (Masalu et al., 2012).

How companies use information technology as a tactical resource for managing issues in the organization.

Issues in Global Business Operations

Global operations require that both time differences and distance constraints be eliminated from their activities. With the age of technology, managers use information technology to solve the discrepancy when they have dealings all around the globe. Companies have the need now more than ever to develop and deploy global networks especially in product industries (Masalu et al., 2012). Though these networks it is easy to fix issues which require senior level management or brainstorming with departmental heads who are not in the same geographical regions and time zones

Maintain a Competitive Advantage

Information technology reduces a company’s operating costs through automation of most of their processes from order handling to processing. Information technology also provides quality assurance because a machine is more likely to make fewer errors than a man is. Information technology also offers additional value-added-services which help solve issues in reliability (Masalu et al., 2012). The technology can also be used to provide competitive intelligence, especially in telecom industry companies.

Organizational Revolution

In the Telecom industry, it is essential to transmit information in seconds. Similarly, the organization must be able to store, process and distribute various forms of information to their subsidiaries to ensure continuity of product development and the free flow of ideas (Masalu et al., 2012). Integration through information technology helps the company avoid delays in critical information processing and helps the company stick to their technology strategy.

 

Reference

Masalu, O. A., Sbragia, R., de Melo Jr Augusto, C. B., & De Vasconcellos, E. P. (2012). Technological Innovation Strategy: A Case Study in Brazilian Subsidiaries of MNCs. Globalización, Competitividad y Gobernabilidad de Georgetown/Universia, 6(3)