Strategic alliances in the high-tech industry

276 Pages·2005·2.48 MB·English

by  Krzysztof Klincewicz

Strategic alliances
in the high-tech industry
Krzysztof Klincewicz
______ Strategic alliances in the high-tech industry ______

Strategic alliances
in the high-tech industry

Krzysztof Klincewicz

λογος
Logos Verlag
Berlin, Germany
ISBN 3-8325-1119-9
Please quote as: Klincewicz, Krzysztof (2005) Strategic alliances in
the high-tech industry. Logos Verlag, Berlin
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Foreword
Krzysztof Klincewicz’s book is of outstanding interest for business practi-
tioners in the high-tech sector, as well as scholars and policy makers. In re-
cent years, there has been growing pressure on firms to give higher priority
to R&D and at the same time to improve their R&D effectiveness. These
pressures are associated with the accelerating rate of product innovations,
shorter product life-cycles, the growing diversification of the technological
portfolio underlying the products and the growing range of applications,
functions that a product or a service must provide. For example, a mobile
phone, which used to provide only real time voice communication in its
early days has additional functionality nowadays to provide including mu-
sic downloading, Internet access, digital TV and global positioning. We are
witnessing transformations of simple products to become complex prod-
ucts. Boundaries between hitherto distinct sectoral segments are becoming
blurred as the result of technological change. For management, all this im-
plies that the traditional focus on the management of projects must be ex-
tended to include greater emphasis on the strategically more important is-
sue of the management of technology. It is universally known today that
information and communication technology (ICT) has now become the
dominant technology in the world economy. This field is characterized by
its turbulent nature of changes taking place in the market as well as tech-
nologies. No firm can realistically hope to exist on its own in isolation. It
has to form linkages with its competitors as well as other firms, institutions
in the same or different field. At the same time, it has to manage these link-
ages efficiently and also creatively. This is where Dr Klincewicz has made
a significant contribution.
6 Foreword
Firstly, the author has been able to analyze accurately the processes of
radical change in the high tech industry, characterized by strategic partner-
ships. He develops an analytical framework to analyze the structure of the
high-tech industry, based on the concept of high-tech value chain, which is
different from platform leadership. The analytical framework and the ty-
pology offers new ways of interpreting a company’s own position in the
industry and how one can make strategic moves vis-à-vis other players in
the value chain, to maximize one’s competitiveness. He classifies three
types of players in the value chain: value chain leader, complementors and
contractors, and then discusses the roles and strategies of each of them. The
book offers a comprehensive review of existing literature, concerning stra-
tegic alliances, management of technology and high-tech markets. Al-
though the book greatly benefits from existing literature, the author avoided
excessive quotations or full discussions of concepts already published
elsewhere, instead, the book focuses on comparisons between existing and
proposed models and their empirical evaluation using novel research tech-
niques.
Secondly, the theoretical framework is complemented by in-depth case
studies. Since the companies analyzed are leading firms in the field, includ-
ing Microsoft, NTT DoCoMo, Cisco, Indian software companies and Tai-
wanese electronics manufacturers, the comparison of their performances
and strategies provides an excellent opportunity to assess some of the char-
acteristics of technology management styles in different countries. The au-
thor extends his analysis to the community-driven development scenario of
open source software and the role of government.
Thirdly, as the author shows, strategic partnership can be managed with
foresight, systematically and he proposes multiple useful techniques such
as partnership network mapping, managing close and distant value seg-
ments, transformation from partner intimacy towards independent innova-
tion.
7
Fourthly, the author uses novel techniques in his analysis to analyze the
dynamically changing high-tech industry using qualitative and quantitative
techniques such as partnership network mapping and data mining. This too
is of great interest to those working in the field of science and technology
policy, as well as those in industry, consulting and business schools.
Dr Klincewicz spent 2 years in my laboratory at Tokyo Institute of Tech-
nology. In April 2005, a new Graduate School of Innovation Management
was established. It is timely that Dr Klincewicz has carried out this re-
search. In my lab, I and my students have been studying sectoral systems of
innovation, competence building in firms, high-tech diffusion and technol-
ogy strategies of high-tech firms using a combination of qualitative and
quantitative data and techniques such as bibliometric analysis and data
mining. I think Krzysztof Klincewicz’s previous experiences working in
the software industry as well as academia, as well as his linguistics skills
(being able to learn Japanese in a short while) has helped him to carry out
this research. He considerably deepens our understanding of the importance
of management of the high-tech value chain for this major industry of the
twenty first century. For all these reasons, I recommend this book most
strongly.

Kumiko Miyazaki
Professor
Graduate School of Innovation Management, Tokyo Institute of Technology
December 2005
8
Preface
The book presents results of a research project, concerning the strategies of
high-tech companies, funded by the government of Japan and conducted at
Tokyo Institute of Technology. I had an opportunity to confront the estab-
lished theoretical frameworks, experiences from my previous work for
software companies in several European countries, as well as recent trends
and developments in the global technology sector. In spite of the abun-
dance of (overwhelmingly quantitative) studies concerning computer, tele-
communications and media sectors, there are only few publications at-
tempting to offer integrated frameworks and models for the converging
domains. To make things worse, there are not many empirically grounded
publications about strategies of high-tech companies, what remains in a
striking contrast to numerous to-become bestsellers for managers, often
containing unconvincing, normative statements.
Managers working in the high-tech industry discover early in their ca-
reers the limited relevance of general theories and models related to man-
agement and marketing. They cannot explain many important phenomena
and tendencies, not capturing some critical dimensions of the market activ-
ity. The present book will hopefully help better understand the underlying
logic of the high-tech industry, with the specificity of corporate strategies
and interorganizational relations. In the following chapters, you will have
an opportunity to read about the high-tech value chain, resulting from the
nature of new technologies, but constituting the industry structure and im-
pacting strategies of all high-tech companies. In the last 15 years, strategic
alliances became the main driving force for the industry development –
nowadays, it is easy to think of “standalone” strategies and complete
independence, due to the proliferation of technology standards, long- or
short-term linkages, and the complementary nature of advanced products.
The present underlying logic of the high-tech industry, described by the
high-tech value chain model, turns alliances into a strategic necessity. The