MB 08-01 : STRATEGIC TECHNOLOGY MANAGEMENT 1.3

5. What are the reasons behind product obsolescence? Explain with examples
Obsolete products have little or no monetary value. They may be recycled, placed as antiques or kept as rare items in museums, if they possess aesthetic or appealing characteristics.
When a scientific and engineering advance leads to the introduction of new technology, turbulence is created in existing systems. New products emerge in the embryonic phase of a technology and many product innovations occur. As the rate of product innovation reaches its peak and starts to decline, a dominant product design emerges and the industry standard is defined accordingly. Process innovation follows new product designs. It continues throughout the technology lifecycle in support of both radical and incremental product innovations. Process innovations are important for the different generations of products. Process innovation increase a product ‘s lifecycle and help maintain competitiveness until a substitute technology creates a discontinuity in the system and a new life cycle emerges. For e.g.switching from steam powered engines to diesel powered engines creates turbulence in the diesel technology and discontinuity of the steam technology. The diesel technology will have its own products, which go through different designs until an industry standard emerges and dominates the market. Process innovation continues to create improvements in the performance of dominant design until a new technological discontinuity occurs, such as electric-power engine. The electric technology may render the diesel technology obsolete. The product and process innovation of electric products will run their cycles until another discontinuity occurs. Perhaps
Hydrogen powered engines.
For a single product, technology life cycle and product life cycle coincide. Technological discontinuity ends on product’s life cycle and starts a new product life cycle. Technological discontinues used to be few and far between in the technology are this is no longer the case. The digital age, for e.g. has created very rapid rates of innovation for components and products. A microprocessor’s design and manufacturing process change almost on a yearly basis. Product life cycles are shrinking in the present marketplace.
REASONS FOR FINITE LIFETIMES:
There are five principal reasons why products have finite lifetimes:
1. Technical performance obsolescence
2. Technical feature obsolescence
3. Cost obsolescence
4. Safety obsolescence
5. Fashion changes
Performance or feature obsolescence in a product occurs when its performance and/or features are markedly less at the same price as those of a competing product. Cost obsolescence occurs in a product when the same performance can be obtained in a competing product at a lower price and the product cannot be produced at a cost to meet that lower price. Safety obsolescence occurs in a product when a competing product offers similar performance and price with improved safety of operation or when government regulations require safer features or operation or when government regulations require safer features or operation in a product line. Finally, products in which technology, costs and safety features are relatively stable can still become obsolete as a result of fashion changes. Fashion obsolescence occurs in a product in which product competition
is undifferentiable in performance and price but is differentiable in lifestyle.


6A. What are the components of a technology system? Based on this how can technology be forecasted?
The concept of a technology system provides general principles by means of which a technology can be varied and improved.
Progress in a technical system will occur by improving points within the system that limit. The system that limit the overall system performance-technical bottlenecks. Anticipating these bottlenecks allows one to know where progress must be made if the overall system is to be improved. Any technology is a mapping of a functional logic to a physical structure. The analysis of a technology as a system will require two descriptions, a logic scheme and a corresponding morphology.
For eg.. consider the automobile as a technology as a system. The functional transformation of the automobile is intended to provide land transportation for moving passengers and goods from one location on land to another, so the basic functional scheme requires powered movement over land. In logical order, an automobile must be fueled entered, started, directed, and stopped. The technology system of the automobile must provide the sub-functions of fueling, starting & stopping, control and direction, and comfort and safety.
All functional open system, such as a technology system, must be described with two levels mapped to each other:
1. Logic schematic-logical scheme of the functional transformation.
2. Physical morphology-constructed physical structure whose processes map in a one to one manner with the logic scheme.
The general way of identifying potential or actual opportunities for technological advances lies in either progress in the logic schematic or progress in the morphology. Technology advance may occur by
• Extending the logic schematic
• Alternating physical morphologies for a given schematic or
• Improving performance of a given morphology for a given schematic by improving parts of the system
Technical progress can occur from changes in any aspect of the system:
1. Critical system elements
2. Components of the system
3. Connections of components within the system
4. Control subsystems of the system
5. Material bases within the system
6. Power bases of the system or
7. System boundary
A technology system cannot be innovated until all the critical elements for the system components, connections, control, materials, and power already exist technologically. Technical progress in a system may occur from further progress in the components of the system or in connections of the system.
Complex technology systems;
A complex technological system may be constructed of parallel subsystems or of a hierarchy of subsystems or both parallel and hierarchical subsystems. Parallel subsystems are component system’s transformation function. Hierarchical subsystems are functionally lower level systems whose operations determine the operation of the system at a synthetic at a upper level
Product systems, production systems and service systems:
Technology systems can assume three different manifestations: Product systems, production systems and service systems
 A product system is a completed and connected transformational technology used by a customer
 A production system is a completed and connected set of transformational technology systems used in producing a product
 A service system is a completed and connected set of transformational technology systems used in communication and transacting operations within and between producer/customer/supplier networks.
Application systems:
Product, production and service system technologies can be used together or individually in the applications systems of a customer. An application is a generic class of productive or procedural activities defined by a purpose. Productive applications are activities focused on the outcome , or product, of the activities. Procedural applications are activities focused on the process during the application and not on the output.
Forecasting applications:
Technology systems become embedded in both product/production/service (combination) systems and applications systems, for the applications systems will incorporate combinations of product, process, or service systems as subsystems and as components and connections in the applications system. To understand the requirements for technical progress as viewed from the applications system, one should ask the following questions:
1.what level performances in a combination or individual system is minimally acceptable for an application, and what increments in performance would be clearly noticeable in the application?
2.what features of the combination or individual system are used in the applications or would be used, and how are they used?
3. What peripheral devices to combination or individual system are essential or very helpful for an application?
4. What aspects of the combination or individual system cause glitches and breakdown and require frequent maintenance in an application?
5. What aspect of the combination or individual system of the environment within which the systems are applied create safety or pollution risks?
6. How does the current cost of the combination system or of peripherals limit the number of applications or duration of applications?
7. What factors in the applications system determine the combination of individual system replacement rates?
8. What factors in the combination or individual systems inhibit or facilitate brand loyalty in replacement purchase?
A technology system from the perspective of an applications system anticipates the market requirements for technical change. The most frequent reason that new high-tech products fail commercially has been their incompleteness for use in an application system.

6B. What is exploratory forecasting or normative forecasting? Explain
Exploratory forecasting:
Exploratory forecasting involves starting from the present and advancing step by step the future and it mainly involves extrapolation of current trends into the future. Two methods under this are, Delphi method or subjective or the expert opinion method and the technology s-curve or objective or quantitative method. In history , there are examples of notoriously wrong predictions based on exploratory-subjective methods. For example, the scientists lord Kelvin asserted in 1985 that heavier than air flying machines are impossible. this was based on extrapolating what was known then. Only in the year 1904 ‘flying machine’ was invented.
Normative forecasting:
Normative forecasting involves inventing some future and identifying the actions needed to bring that future into existence. Two methods under normative forecasting are analysis and planning. Normative analysis looks at the underlying structures of current trends; they do not merely extrapolate trends. Normative planning involves actual formulation of technology strategy and research programs to implement such strategy. One should try both to anticipate the future and to make the future that one desire happens. This is the essence of all action, particularly the essence of technology forecasting and technology planning.