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Technology acquisition

Technology Management

Activities and Tools

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Discuss:

What are the decision criteria for

technology acquisition?

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Acquisition channels (1)

BUY Sponsoring university research

External R&D centers

Consultants

Licensing agreements

Vendors/ suppliersAcquiring machinery or the firm

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Acquisition channels (2)

MAKE

R&D

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Acquisition channels (3)

COLLABORATE

Consortia

Joint ventures Sub-contracting

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Make or buy or collaborate decision

depends on: (Chiesa and Manzini, 1998)

1) strength of the organizations own capabilities

(relative costs)

2) respective transaction and governance costs contract price, cost of information, monitoring

performance, committing specific assets, handlingcomplexity in reaching agreements

3) dynamic transaction costs costs of persuading, negotiating, coordinating, and teaching

outside suppliers

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There is no ONE best organizational form!

The firm is not only profit maker but

innovator so it should have profits and scalenecessary to finance the overhead expenditures

requried to anticipate change and create futurevalues.

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BUY option

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The reasons behind technology

acquisition

Limited resources

Time pressure

Complementary assets Protecting image

Diversification

Supporting internal technologiesAvoid development risks

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Expected resulting impacts of

technology acquisition

productivity quality

product development cycle

labor-management relations accuracy of the information flows

production costs

flexibility (volume, machine, process,..) maintenance costs

service performance

sales

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Steps in technology acquisition

Goal setting Technology & Impact assessment

Finding technology suppliers Acquisition channel

Choosing acquisition method Contract preparation and negotiation Technology transfer Managing long-term collaboration

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Collaboration option

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Open Innovation

Research Development Commercialisation

Core Market Focus

Company

Boundaries

Products in-sourced

(e.g. Co-branding)

IP in-licensing

IP out-licensing

Technology

Spin-outs

Ideas &

Technologies

Source: Chesborough 2003 and Docherty 2006

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What are the issues when

managing external suppliers and

alliance partners?

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Issues in network design:

Aim

Partners

Duration Contract

Management

Investment / Re-engineering Division of labour

Strategy

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How to decide on the type of network?

The objective of the collaboration

The content of the collaboration

The typology of partners involved

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The content of the collaboration (Chiesa

and Manzini, 1998):

1) Definition of the content

2) Firms familiarity

3) Relevance for the firms competitive adv.4) Technology life cycle

5) Level of risk

6) Appropriability of the innovation7) Phase of the innovation process

8) Level of assets specialization

9) Divisibility of assets

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P&G Case (1)

Collaborations: Open Innovation

(Sakkab, 2002)

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P&G Case (2)

P&G is a technology-rich company: 27000patents, 4000 unique titles and 3000 new patentseach year.

It invests $1.8 billion annually on R&D.

Even though P&G use less than 10 per cent ofits own technologies in company products

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P&G Case (3)

Internal website, 18000 innovators across R&D, Engineering,Market Research, Purchasing, and Patent Divisions.

600 websites for Global Project Teams

Individual problem-solving and connection-making websites for 20Communities of Practice.

Nearly 9 million documents on line, growing daily.

Automation and artificial intelligence

the latest in webcasting and satellite technology to create an internalInnovation News Network

Conducting a deal-making/technology trading expo over 2200 ideas for new products and important new uses of P&G and

external technologies

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Identification

Internal acquisition:

R&D External acquisition

New product

dev.

New process

dev.

Other projects

new product / service equipment / solutions

Exploitation

Selection

Acquisition

Outputs

Business

strategy

Learning

Purchase

Collaborative R&D

M&A

Protection