MGT325 SEU Management of Technology Questions

DescriptionChapter Seven
Choosing Innovation
Where Should We Focus Our Innovation Efforts?
An Exercise.a
Technological change can make the world feel very uncertain—how can we
know what customers will want, or competitors will do, in the future? The future
of a technology, however, is not as unknowable as it might seem. If you can get
the big picture of the dimensions along which a technology is improving, and
where the big payoffs are still yet to be reaped, you can gain insight into where
the next big breakthroughs are likely to, or should, be. This can help managers understand where to focus their R&D efforts, and to anticipate the moves
of competitors.
The story of Sony’s SACD provides a great example. In the mid-1990s, the
compact disc market was approaching saturation and both the consumer electronics and recording industries were eager to introduce a next-generation audio
format that would usher in a new era of growth. In 1996, Hitachi, JVC, Mitsubishi,
Toshiba, Universal Music Group, Time Warner, and others formed a consortium
to back a new standard, DVD audio, that offered superior fidelity and surround
sound. The plan was twofold: to drive consumers to upgrade their players and
libraries and to do an end-run around Sony and Philips which owned the compact disc standard and extracted a licensing fee for every CD and player sold.
Sony and Philips, however, were not going to go down without a fight. They
counterattacked with their own new format, Super Audio CD, an extension of
the old one which would have allowed them to control the royalties for the new
discs and players. The industry gave a collective groan; manufacturers, distributors, and consumers all stood to lose big if they placed bets on the wrong format. Nonetheless, Sony launched the first super-audio players in late 1999; DVD
audio players began to hit the market in mid-2000 and prices for both rapidly fell
and converged. A costly format war seemed inevitable.
You may be scratching your head at this point, wondering why you’d never
heard about this format war. What happened? MP3 happened. While the consumer
142 Part Two Formulating Technological Innovation Strategy
electronics giants were pursuing new heights in audio fidelity, an algorithm that
slightly depressed fidelity in exchange for reduced audio file size was taking off.
Soon after the file-sharing platform Napster launched in 1999, consumers were
downloading free music files by the millions and Napster-like services were
sprouting up like weeds.
It’s easy to think that Sony, Philips, and the DVD Audio consortium just got
unlucky. After all, who could have predicted the disruptive arrival of MP3? How
could the consumer electronics giants have known that a format trajectory of
ever-increasing fidelity would be overtaken by a technology with less fidelity?
Actually, they all should have seen that the next big breakthrough success was
far more likely to be about portability and selection than fidelity.
Here is an exercise that can help you get the “big picture” of technology evolution in an area, and to prioritize innovation investments.
Step One: Identify the Dimensions
Technologies typically progress along several dimensions at once. For example,
computers became faster and smaller in tandem; speed was one dimension,
size another. Developments in any dimension come with specific costs and benefits and have measurable and changing utility to customers. Identifying the key
dimensions that a technology has progressed along is the first step in predicting
its future.
One of the best ways to identify these dimensions is to trace the technology’s
path to date, and for each major change in the technology’s form, identify the
dimensions that were affected. The further back in time you can go, to the most
primitive way of fulfilling the need the technology meets, the easier it will be to
see the high-level dimensions along which the technology has changed.
For example, prior to the phonograph, people could hear music or a speech
only when and where it was performed. The first phonographs introduced in the
1800s desynchronize the time and place of a performance so that it could be
heard at any-time, anywhere. That was a huge accomplishment. Those phonographs, however, were cumbersome. The sound quality was “tinny” and music
selection was extremely limited. When Emile Berliner introduced flat disc-shaped
records, it dramatically increased the sound fidelity, while dramatically lowering
the cost, which in turn led to a huge increase in the selection of music available.
Later, in the 1960s eight-track tape cartridges would bring portability to recorded
music. Cassette tapes rose to dominance in the 1970s further enhancing portability, but also offering customizability for the first time—the ability to record
your own music, speeches, and more. Then in 1982, Sony and Philips introduced the compact disc standard which offered greater fidelity than cassette
tapes and rapidly became the dominant format. Tracing this history thus reveals
six key dimensions that have driven the evolution of audio format technology:
De ­synchronization, cost, fidelity, selection, portability, and customizability.
Now repeat this process in the area you are interested, starting far back in
the past and following the path of the technology forward in time. Look for each
major inflection point. Try to identify the three to five most important high-level
dimensions along which the technology has evolved. Getting to a high level of
Chapter 7 Choosing Innovation Projects 143
A Parabolic
Utility Curve
for the Selection of Music
Utility Consumers Derive from Recorded Music
Catalogs of one million plus
songs satiate most buyers’ needs
Wider selections enable customers
to find idiosyncratic preferences
First songs released yield big value
gains over not having recorded music
Selection of Recorded Music Available
a dimension is important because it helps you to see the big picture rather than
being caught up in the details.
Step Two: Where Are We on the Utility Curve for
Each Dimension?
For each dimension, we now want to determine the shape of the utility curve—
the plot of the value customers derive from a technology according to its performance on a given dimension—and where we currently are on the curve. This
will help reveal where the most opportunity for improvement lies.
For example, the history of audio formats suggests that the selection of music
available has a concave parabolic utility curve: utility increases with increasing
selection, but at a decreasing rate, and not indefinitely (see Figure 1). When
there’s little music to choose from, even a small increase in selection significantly enhances utility. When the first phonographs appeared, for example, there
were few recordings to play on them. As more recordings became available,
customers eagerly bought them, and the appeal of owning a player grew dramatically. Over the ensuing decades, selection grew exponentially and the utility
curve ultimately began to flatten; people still valued new releases, but each new
recording added less additional value. Today digital music services like iTunes,
Amazon Prime Music, and Spotify offer tens of millions of songs. With this virtually unlimited selection, most customers’ appetites are sated—and we are probably approaching the top of the curve.
Now let’s consider the fidelity dimension, the primary focus of Super Audio
CD and DVD audio. Fidelity also likely has a concave parabolic utility curve. The
first phonographs had awful fidelity; music sounded thin and tinny, though it was
still a remarkable benefit to be able to hear any recorded music at all. The early
144 Part Two Formulating Technological Innovation Strategy
improvements in fidelity that records offered made a big difference in people’s
enjoyment of music. Then along came compact discs which offered even more
fidelity, though many people felt that vinyl records were “good enough” and
some even preferred their “warmth.” The fidelity curve was already leveling out
when Sony, Philips, and the DVD Audio consortium introduced their new formats
in the early 2000s. Super Audio CD and DVD Audio offered significantly higher
fidelity than the compact disc. For example, whereas CDs have a frequency
range up to about 20 thousand cycles per second (kHz), the new formats offered
ranges that reached 100 kHz. That’s an impressive high end—but as human
hearing peaks out at about 20 kHz, only the family dog was likely to appreciate
it. In 2007, the Audio Engineering Society released results of a year-long trial
assessing how well subjects (including professional recording engineers) could
detect the difference between Super Audio and regular CDs. Subjects correctly
identified the Super Audio CD format only half the time, no better than if they’d
been simply guessing!
Had the companies analyzed the utility curve for fidelity they could have seen
that there was little payoff for investing in this dimension. Meanwhile, even a cursory look at the portability, selection, and cost curves would have revealed the
opportunity there, and MP3 offered big payoffs on all three.
Step Three: Where Should We Invest Our Money and Effort?
Using a matrix like the one below can help us assess which technology-­
development investments are likely to yield the biggest bang for the buck (see
Figure 2). First, list the performance dimensions you’ve identified as most important to customers. Then, score each dimension on a scale of 1 to 5 in three
areas: importance to customers (1 means “not important” and 5 means “very
important”); room for improvement (i.e., how far we are from the utility curve flattening out, where 1 means “minor opportunity for improvement” and 5 means
“large opportunity for improvement”); and ease of improvement (1 means “very
difficult” and 5 means “very easy”).
For example, the scores created by a company that makes glucose-­
monitoring devices are shown in the matrix (Figure 2). The feature most important to customers is reliability—reliable measures can mean life or death for a
patient. However, existing devices (mostly finger-prick devices that test a drop
of blood with a portable reader) are already very reliable, and thus scored low
Ranking Areas
of Focus
to Buyers
(1–5 scale)
Room for
(1–5 scale)
Ease of
(1–5 scale)
Total Score
Ease of use
Chapter 7 Choosing Innovation Projects 145
on the “room for improvement” measure. They are also fairly easy to use, and
reasonably low cost. However, they are uncomfortable. Comfort is a dimension
that is ranked highly by users (though not as high as reliability), yet is much further from the optimum. Both comfort and ease of use are modestly difficult to
improve (scoring 3s in this example), yet because comfort is both more important
to customers than ease of use, and further from the optimum, comfort ends up
with a significantly higher total score. The team that provided the scores for this
example ended up proposing that the company develop a patch worn on the
skin that would detect glucose levels based on sweat that would be sent via
Bluetooth to the user’s smartphone.
Notably, we can adjust the scale of the scores to reflect the organization’s
objectives (e.g., a cash-strapped firm might weigh “ease of improvement”
higher, thus we could change the scale to 1–10), and we can repeat this analysis for different market segments that have different ratings for the importance
of a dimension or its room for improvement. For example, we could divide the
­glucose-monitoring device market into a market for children’s devices versus
adults’ devices. Comfort and ease of use are particularly important for glucose
monitors for children. We might thus score comfort and ease of use as 5 for
“importance to customer” in the children’s device market, indicating that in this
market, these dimensions are often more important than cost.
Shifting the Organization’s Focal Point
This exercise can help managers broaden their perspective on their industry,
and shift their focus from “this is what we do” to “this is where our market is (or
should be) heading.” It can also help overcome the bias and inertia that tend to
lock an organization’s focus on technology dimensions that are less important to
consumers than they once were. To be truly innovative, it is not enough for organizations to merely improve what they are doing; they need to be able to look
into the future and identify what could be done in the industry that is b
­ etter—
much better—than what the industry is doing today.
Discussion Questions
1. Why did the consumer electronic giants invest so much in developing audio
technology that exceeded the hearing capacity of humans?
2. Can you think of other companies or industries that are currently investing
in technology dimensions where the utility payoff of improving the technology has flattened?
3. Can you come up with an example of a firm that would likely weight
“importance to customers” much higher than “ease of improvement”? Can
you come up with an example of a firm that would likely weight “ease of
improvement” much higher than “importance to customers”?
Adapted from Schilling, M. A., “What’s Your Best Innovation Bet?” Harvard Business Review (July–August
2017) 86–93.
‫المملكة العربية السعودية‬
‫وزارة التعليم‬
‫الجامعة السعودية اإللكترونية‬
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Management of Technology (MGT 325)
Due Date: 03/06/2023 @ 23:59
Course Name: Management of Technology
Student’s Name:
Course Code: MGT325
Student’s ID Number:
Semester: 3rd
Academic Year:2022-23
For Instructor’s Use only
Instructor’s Name: Dr. Mohammed Alhashem
Students’ Grade: 00 /15
Level of Marks: High/Middle/Low
• The Assignment must be submitted on Blackboard (WORD format only) via allocated
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be
reduced for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or
other resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font.
No pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.
Course Learning Outcomes-Covered
➢ Demonstrate the ability to collect and synthesize data, facts and figures and use
quantitative and qualitative methods to evaluate new product development projects.
(LO 2)
➢ Explain of the concepts, models for formulating strategies, defining the organizational
strategic directions and crafting a deployment strategy. (LO 3)
Reference Source:
Textbook:Schilling M.A (2020),Strategic Management of Technology Innovation (6th Edition). McGraw Hill Education. Electronic Version: ISBN-13: 978-1260087956 ISBN-10:
1260087956, Printed Version: ISBN-13: 978-1260087956 ISBN-10: 1260087956
Weight: 15 Marks
Students are required to refer to chapter 7 ‘Choosing Innovation Projects’ of their
textbook with a particular attention to the discussion ‘Where should we focus our
innovation efforts? An exercise.’ (Pg 141)
Clear understanding of the chapter along with in continuous critical analyzation of each
topic and discussion is highly recommended.
Based on the knowledge and information gathered by referring to the textbook and the
students own thorough research; they are required to answer the below mentioned
questions as per the instructions.
Note :➢ Only reading the textbook will not be enough to score grades or answer the
questions appropriately.
➢ Do adhere to the word limit strictly, mere one or two sentence answers will not be
entertained, they need to be supported with further explanation and facts.
➢ It is mandatory to support each answer with at least two scholarly, peer-reviewed
Q1- Based on your textbook, explain the 5 steps that can help to obtain the ‘big picture’ of
technology evolution in an area and to prioritize innovation investments. Give at least one
example to support your answer. (5 Marks, Min words 400-500)
Q2- Judging by the current trends of the technological innovations in the market, select a
company of your choice which has repeatedly weighted the ‘importance to customer’ as its
primary objective while choosing their innovation projects. Explain at least two instances in
depth supporting your answer. (2.5 Marks, Min words 200-250)
Q3- Judging by the current trends of the technological innovations in the market, select a
company of your choice which has repeatedly weighted the ‘ease of development’ as its
primary objective while choosing their innovation projects. Explain at least two instances in
depth supporting your answer. (2.5 Marks, Min words 200-250)
Q4- Write about minimum two companies or industries that are currently investing in
technology dimensions where the utility payoff of improving the technology has flattened.
(2 Marks, Min words 200)
Q5- Create your own matrix to assess which technological development investments are
likely to yield the biggest bang for the buck in case of ‘biometric security devices’. Explain
your findings. (3 Marks, Min words 300)
✓ All students are encouraged to use their own words.
✓ Use Saudi Electronic University academic writing standards and APA style
✓ Use proper referencing (APA style) to reference, other styles will not be accepted.
✓ Support your submission with course material concepts, principles, and theories from
the textbook and at least two scholarly, peer-reviewed journal articles unless the
assignment calls for more.
✓ It is strongly encouraged that you submit all assignments into the safe assignment
Originality Check prior to submitting it to your instructor for grading and review the
grading rubric to understand how you will be graded for this assignment.

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