My very interesting class, Technology Strategy, is finally concluded. My group project focused on satellite navigation systems like GPS, and how the technology is about to merge with the cell phone industry. Technology Strategy is really an interesting and important class. It raises questions about how value is created (how do companies actually create the technology?), capture the value (how to make money on it) and how to deliver value (get it out into the market!). Based on technology and economical knowledge the whole value chain of technology and innovation is being discussed. If this sounds interesting, take further read on what we found for the hybrid GNSS / Cell phone market:

The cell phone and satellite navigation market will merge because:

  • New and powerful applications can be created by combining the two technologies (like A-GPS that use satellite technology AND cell phone triangulation to find a position, using the wireless network to connect with a server to do advanced route calculations that a small handset is not capable of doing).
  • GPS and cell phone complements each other. It’s fairly easy to combine the two features into the same device.
  • The value chain is fairly similar: both are dependent on some sort of infrastructure, the component for each handset is fairly much the same, the software for both can be created in a similar fashion. By expanding into each others market, the existing structure of the value chain can support the new market.
  • The competition is really high because of low switching cost from the customer, the cost of entry is high and the infrastructure is commonly available to all hence becoming difficult for the seller to differentiate. Cost become important and this might lead to acquisitions (bigger companies eat up the smaller companies) to capture the acquiring companies value without raising cost too much.
  • Garmin is already creating a cell phone.
  • Nokia has created GPS handsets and are including GPS receivers into handsets, along with A-GPS technology.
  • Both Garmin and Nokia have assets in Navteq, which delivers electronic maps. Will Nokia and Garmin be competitors or cooperators?

My group consisted of Laura from Spain who has a background in the GPS industry, and Guillermo from Colombia. A very nice group to be part of. I learned a lot from them and had a good time. Thanks guys :-)