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How technology‐driven business strategy can spur innovation and growth Strategy & Leadership How technology-driven business strategy can spur innovation and growth Saul J. Berman, Jeff Hagan, Article...

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How technology‐driven business strategy can spur innovation and growth
Strategy & Leadership
How technology-driven business strategy can spur innovation and growth
Saul J. Berman, Jeff Hagan,
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Saul J. Berman, Jeff Hagan, (2006) "How technology‐driven business strategy can spur innovation and growth", Strategy & Leadership,
Vol. 34 Issue: 2, pp.28-34, https:
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https:
doi.org/10.1108/ XXXXXXXXXX
https:
doi.org/10.1108/ XXXXXXXXXX
How technology-driven business strategy
can spur innovation and growth
Saul J. Berman and Jeff Hagan
F
or more than a century, business leaders have viewed technology as the primary
means to execute and implement their business strategies. However, many of today’s
most exciting and ‘‘disruptive’’ innovations now tend to occur at the intersection of
market insight and technological know-how, making technology an input to the strategy
process rather than an after-the-fact enabler. Guided by this insight, many of the companies
that are seizing the initiative in this new competitive environment are doing so by taking a
fundamentally different approach to strategy development – an approach we call
technology-driven business strategy.
The new premium on market-savvy, technology-driven strategy has several important
implications. First, technology matters when it comes to driving growth and, thus, to the
formulation of business strategies. This is widely accepted for technology intense
usinesses such as Cisco, Motorola and IBM (the ‘‘bit handlers’’), but increasingly is the
case for companies dealing in everyday products such as household appliances and
vending machines (‘‘atom companies’’), where new advances in mobile communications
and sensor technologies, are radically changing the basis of innovation, consumer value
and competition[1]. As a further example, it is reckoned that by 2010 more than 90 percent of
the innovation in the automotive industry will be electronics related. Second, when factoring
in technology, know-how is often sufficient. Many innovation-based strategies are based on
the unique market application of an existing integrated set of technologies rather than
equiring technological
eakthrough. Third, innovation emerges where market insight and
technological insight intersect, a process that is often easier to harness within the small
entrepreneurial firm than in the larger, more established organization. Finally, the competitive
advantage afforded by know-how can be fleeting, requiring companies to keep setting the
pace within this rapidly changing technology and business context or risk being blown away
y it.
How technology-driven strategies drive innovation
To learn more about how successful businesses innovate and incorporate the technology
variable into business strategy development, the IBM Institute for Business Value studied ten
companies that are known within their respective industries for strong innovation. These
companies’ innovations stood out because they accomplished one or more of the following
three achievements:
1. Changed the basis of competition. At a particular point in time, within any given industry,
usinesses typically compete on a specific subset of performance dimensions such as
product features, price, customer service or
eadth of offerings. Companies most often
invest energy in beating the competition along these ‘‘accepted’’ performance
dimensions. Innovative companies, on the other hand, play to a different set of
strengths. Instead of competing head-to-head with industry rivals on historical
performance measures, they differentiate themselves through a new dimension thatq IBM Corporation.
PAGE 28 j STRATEGY & LEADERSHIP j VOL. 34 NO XXXXXXXXXX, pp. 28-34, Emerald Group Publishing Limited, ISSN XXXXXXXXXX
Saul J. Berman is a Partne
and Global Leader of the
Business Strategy Practice
of IBM Business Consulting
Services (saul.berman@
us.ibm.com). Jeff Hagan is
an Alliance Development
Manager within IBM
Business Consulting
Services (jehagan@
us.ibm.com).
q IBM Corporation.
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exploits an emerging or unarticulated market need. For instance, an industrial products
company might shift the basis of competition from product features to rapid fulfillment, o
a services company could change the focus from price to convenience. This type of
innovation delivers new value to consumers, while creating competitive differentiation fo
the innovative company[2].
2. Broke the rules of scale. Within each industry, a certain set of implicit rules often exists
around scale. For example, a new model of car must sell x units over the product’s life to
e profitable, or a new book must sell x copies in its first printing to
eak even. Behind
these heuristics are certain assumptions about scale that guide capital investment
decisions, allocation of resources and market selection and entry strategies. Most
companies seek to optimize operations within these boundaries. Innovative companies,
however, also look for ways to
eak these rules – often leveraging technology to delive
profit at a lower scale point or, conversely, achieve scale advantage where previously
none existed. eBay is a prime example: it managed to create scale advantage in a market
that was long considered regional and hyper-fragmented.
3. Introduced totally new business models. In each industry, a dominant business model
usually prevails. Using the standard business model (the operating model employed to
deliver on its value proposition and generate profits), traditional competitors seek to drive
greater efficiencies and increase revenues. Meanwhile, innovative companies are
constantly seeking out alternative business models that have the ability to disrupt o
undermine the incumbent industry business model. Here again, technology can play a
pivotal role, allowing a business model to emerge that does not rely on the historical
operating model or profit mechanisms, often shifting large amounts of market value to the
innovative competitor. With its direct-to-consumer, build-to-order model, Dell turned its
industry’s traditional build-to-stock model on end – allowing the company to avoid
high-cost channels and excess inventory that often plagued rivals.
The accomplishments of the companies studied also reinforce the IBM view of innovation; in
every case, these companies combined market insight with technological know-how to
eak stride with their competitors (see Exhibit 1). Looking across the
oad cross-section of
usinesses and industries analyzed, there were no revolutionary inventions that precipitated
their innovations. Most of the technologies involved were not proprietary – and most had
een available for quite some time. However, these companies’ familiarity and knowledge of
technology provided a new lens through which they could explore solutions to market needs
and opportunities. And that timely combination led to innovation.
Technology-driven strategy innovators – common principles and practices
We have observed six common principles that innovative companies, like the ten in ou
study and others that we have worked with, seem to follow in their approach business
strategy development:
1. Consider technology a core input. Instead of viewing technology only as enabler of thei
usiness strategies, businesses should consider it a primary input to strategy formulation
– on par with other necessary variables such as customers, markets and competitors. At
Boston Coach, business strategies have to balance various (sometimes competing)
objectives: customer satisfaction, operational efficiency and revenue growth. As
dispatching, Boston Coach’s core business process, became increasingly complex, it
‘‘ Many innovation-based strategies are based on the unique
market application of an existing integrated set of
technologies rather than requiring technological
eakthrough. ’’
VOL. 34 NO XXXXXXXXXXjSTRATEGY & LEADERSHIPj PAGE 29
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seemed unlikely that the company could simultaneously address their business
objectives with a single strategy – until they decided to factor technology into thei
usiness strategy development process. The company hired a research team to identify
applicable technological innovations and assess potential business implications. Based
on the research findings, the team created a proprietary scheduling algorithm and
optimization engine capable of refining complex dispatch schedules in real time. These
innovations have become the foundation for a new operating model that has the capacity
to support up to a 10 percent increase in sales without additional vehicles, drivers o
dispatchers, while simultaneously increasing productivity by 10 to 20 percent[3]. By
factoring technological possibilities into its core business strategy, Boston Coach was
able to
eak the rules of scale that had been implicitly governing its approaches up to
that point. With its innovation, the company redefined the ‘‘norms’’ for revenue capacity
per vehicle and the cost of a near-perfect on-time pickup rate – and set a new competitive
enchmark.
2. Revisit strategy and technology context regularly. For many industries, the technology
context has the potential to change more rapidly than the historical three- to five-yea
strategic planning cycle. Thus, companies need to continuously manage and revise
strategy to proactively take advantage of the evolving technological environment rathe
than reacting to technology-induced changes to their markets and businesses. Hertz, fo
instance, has continually leveraged wireless and satellite technologies to create new
operational capabilities and customer solutions that deliver value to the customer and
differentiate it in a market susceptible to commoditization.
3. Uniquely manage emerging business opportunities. Companies need separate
organizational procedures, structures and policies to manage emerging business
opportunities differently than their core businesses, allowing market insight and
technological know-how to intersect and innovations to take root. When Norwich Union
embarked on its
Answered Same Day Aug 05, 2020 Swinburne University of Technology

Solution

Prasenjit answered on Aug 07 2020
151 Votes
8

Business Strategy
Teacher name. Lynette Robinson
Name of the Student. Gurpreet Singh
College. Kent institute business and technology

    
     Title of the Article
    
Assessment of business strategy:
implication for Indian banks
    
    Date of Publication/Volume and Issue
    Journal of Strategy and Management, Vol. 8 Issue: 4, pp.306-325, 9 May 2015
    
     Autho
s Names
    Dhananjay Bapat and Deepa Mazumda
    
     Purpose:
    The purpose of this paper is to study business strategies and strategic orientation in the Indian banking sector. The study tries to fill the void by assessing the strategic archetypes of Indian Banking instead of the popular domain of internal performance assessment.
    
     Theory:
    The study is based on strategies and its formulation. How strategies help in achieving the objectives of a firm. The study deals with the business strategy formulation and its implementation in banks within India. Further, the importance of strategic orientation in developing the efficiency of the Banks. The study also focuses on the theory of customer satisfaction since banks are subjected to service-based industry.
    
     Methodology:
    Primary data was collected with the help of Convenience Sampling technique. The data consisted of Bank employees. A total of 330 responses were used for the study. Questionnaire was used in collecting these responses.
    Data Analysis
    Factor Analysis, Exploratory Factor Analysis, Component Factor analysis, Co
elation among Factors were used for analysis.
    Findings and Conclusion
    The study finds that Bank employees have given higher emphasis in maintaining market share. They consistently develop as the conventional strategy archetypes which are favorable than other strategy archetypes. Also, a push in cost efficient strategy can be seen. Further, the Indian Banking industry is dominated by competition orientation and cost orientation.
    How did the article contribute to the theories and concepts of Business Strategy?
    The study contributed to the notion that competitive orientation, cost orientation, innovation and customer need orientation are pertinent factors of business strategies in Indian banking. Further four different quadrants of performance were identified in Indian Banking industry viz. resource constraint, low return, complacency and optimal
Performance. This will help in formulating business strategies with an achievable objective criterion.

    
     Title of the Article 2
    
The impact of business strategy
on leadership
    
    Date of Publication/Volume and Issue
    Journal of Strategy and
Management, Vol. 8 Issue: 2, pp.110-126,
16 January 2015
    
     Autho
s Names
    Thomas G. Marx
    
     Purpose:
    The paper tests the proposition based on effect of business strategy on leadership functions, skills, traits and styles. Further, it also studies the implications of these effects on leadership and strategic planning.
    Theory:
    
    The theory is based on the effect of strategy on leadership. How this affects the productivity of the firm. How the leadership theory applies in implementing the business strategies.
    
     Methodology:
    The study is based on an empirical research with 450 responses of an online survey. Five-point Likert Scale is applied in the questionnaires.
    Data Analysis
    The analysis was done with the help of regression where leadership functions were dependent variables with the strategies being independent variables.
    Findings and Conclusion
    There is a strong evidence that Best Value, Blue Ocean and Product strategies have significant effect on...
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