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1 Introduction

Strategic technology planning is an important area and critical in business. It requires a company to utilize its core competences to outperform its competitor. The ability to create, modify and maintain the alignment of technology planning to the overall business strategy—as market/business conditions change, new opportunities arise, and new capabilities are developed– can define the success or failure in the market [1, 2, 3].

Although strategic technology planning has been developed over the past four decades and found its value in many strategic technology related problems, there is a tremendous effort from scholars in finding more effective methods. This chapter is an effort to capture those developments.

In this chapter the journal articles are reviewed with a particular interest in identifying what approaches, methods, and tools have been presented or employed in strategic technology planning research. An index search for strategic technology planning related articles was carried out in the leading journals of the field of management of technology (MOT). These journals were selected based on the two articles that studied the citations of leading journals most cited in the MOT literature [4], such as Technological Forecasting and Social Change, International Journal of Technology Management, and IEEE Transactions on Engineering Management. An important point that needs to be considered is that this chapter aims to capture all methods and tools applied in strategic technology planning that relates to overall business strategy.

The research method of this chapter is deep analysis of available literature of related fields based on a deductive approach and a content analysis method. The literature survey is based on a search for the keyword index ‘technology planning’ on the Business Source Premier, Compendex/Engineering Village online database and Proquest database, from which 21,148 articles from 1970–2010 were found on March 1 2011.

After topic filtering, there were 3662 articles related to the keyword ‘strategic technology planning methodologies and frameworks’ and 249 of these were connected to the keyword ‘strategic technology planning methodologies and corporate strategy’. Out of the 249 reviewed articles, 76 are cited in this chapter. Based on the scope of 76 cited articles, this chapter surveys and classifies strategic technology planning methodologies using three categories: market analysis approach, technology analysis approach and combined approaches of market and technology.

2 Defining Strategic Technology Planning

Strategic technology planning is defined as the process of determining which technology is not yet adopted that will have a strategic impact on the company. Strategic technology planning is becoming more critical with the rapid development and obsolescence of the technologies. Most companies are facing an increasing and fiercer competitive challenge due to globalization. Basically, there are two reasons behind this phenomenon. First, competition is caused by other companies operating more effectively. Second, the company lost its competitive advantages by cutting back its research and development investments.

Strategic technology planning represents all capabilities that require investment or alignment to achieve the key product attributes defined in the product strategy. These technologies or capabilities come from either internal development or external sources. The specific architecture of this section will depend on how technology is managed in the business, whether by cross-business technology platforms or by business/product-specific technology groups [3].

Strategic technology planning activities–within a corporate level–are often implemented by applying integrated planning instrument, which allow firms to consider both technology-oriented and product-oriented aspects [5].

The literature of strategic technology planning is considered relatively rich at the corporate level [6]. However, dealing with all dimensions and elements of corporate strategy is not the aim of this chapter. For the purpose of this chapter, the literature review and its content analysis will be divided into three categories; market analysis approach, technology analysis approach and combined approaches of market and technology.

3 Market Analysis Approach

From the market standpoint, scholars have been conducting several valuable researches in an attempt to formulate methodologies or frameworks for strategic technology planning. Figure 1 described the number of publication lists on strategic technology planning in regards to market analysis approach.

Fig. 1
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Publications on strategic technology planning: market analysis approach (in order of publication time)

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The experience curve is one of the well-known approaches in technology planning. The experience curve states that the more frequent a task is performed; less time would be required on subsequent iterations [7]. The reason for why experience curve effect applies, of course, is the complex processes of learning involved. The consequences of the experience effect for businesses have been examined by many marketing strategist. They concluded that because the relatively low cost of operations is a very powerful strategic advantage, firms should capitalize on these learning curves. The reason is increased activity leads to increased learning, lower costs, lower prices, increased market share, and eventually can increase profitability and market dominance [8–12].

Porter’s Five Forces is a framework for industry analysis and business strategy development introduced by [13]. This framework identifies and analyzes five competitive forces that shape every industry, and helps determine an industry’s weaknesses and strengths, which include: (1) competition in the industry, (2) potential of new entrants in the industry, (3) power of suppliers, (4) power of customers, and (5) Threat of substitute products. Porter’s framework is an extension to the more generic framework on SWOT analysis, a technique that is credited to Albert Humphrey [14–16].

Passey et al. [17] worked with the term concept visioning coupled with multiple scenario building as part of an innovation roadmap in the technology planning framework. Both terms were utilized to formulate product innovation and to provide effective communication with the required stakeholders. Passey et al. [17] also argues that these tools are necessary to identify the market context, including varying and emerging markets and build the business case to justify resources for further development [17, 18].

Friar [19] argues that strategic technology planning should include: selection, resource allocation and organizing technological assets, which support long-term strategic direction of the company. Based on the work of Christensen [20], Hax and Majluf [21], and Coombs and Richards [22], technology planning can be seen as a tool for:

  1. 1.

    providing overall strategic guidance of the corporate technology base and innovative efforts,

  2. 2.

    providing parenting value to divisions and business units in their innovative efforts,

  3. 3.

    assuring a proper balance and alignment between short-term, incrementally innovative efforts (exploitation) and long term explorative efforts; and

  4. 4.

    Increasing horizontal technology transfer and sharing, as well as synergy and coordination in research and technological innovation between divisions and business units.

These arguments also meant that strategic technology planning—in relation to market analysis—has to deal with the concept of level of investment involved [20, 21, 23, 24] and timing concept [20, 21, 23, 25–27].

Market portfolio—also known as product portfolio [28]—analysis is probably one of the most widely used tools in the field of strategic technology planning with main concern on the market side. This concept was developed since diversified companies were facing two major problems at that time: (1) increasingly complex strategic technology planning process; (2) competition becomes fiercer than ever. Therefore, companies had to find new ways to assure an effective and efficient management of the company’s resources. The BCG matrix was developed for this purpose and still considered as the most widely known and implemented approach [29, 30].

Number in a box refers to author(s) as listed in Table 1.

Table 1 List of author(s) as indicated in Fig. 1
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4 Technology Analysis Approach

Different methodologies and techniques have been developed by scholars in their attempt to manage and plan the company’s technology. This chapter categorized those methodologies and techniques into: bibliometric, technology acquisition, organizing of technology management, technology integration, soft system methodology, database tomography, technology development envelope (TDE), patent analysis, and analytical hierarchy process (AHP). The publication list is shown in Fig. 2.

Fig. 2
figure 2

Publications on strategic technology planning: technology analysis approach (in order of publication time)

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Bibliometric methods are utilized by Kostoff and Schaller [31–33] to explore the development of strategic technology planning on roadmapping foundation [3]. Hax and Majluf [21] demonstrated that technology planning decisions are not solely based on selection, resource allocation and organizing technological assets. Technology planning also discusses technology acquisition methods [20, 25, 34, 35], technology intelligence, technology organization and managerial infrastructure; and timing of technology introduction [20, 23, 26].

The use of Soft System Methodology (SSM) in the area of technology planning is well documented. SSM was originally developed in the late 1960s at the University of Lancaster in the UK [36, 37]. At first, it was seen as a modeling tool, but in later years it has been seen increasingly used as a meaningful learning development tool. In combination with technology roadmapping methods, Okutsu et al. [38] managed to apply the combined method into the area of technology planning and implement it to engineering laboratory’s application.

Database Tomography (DT) is a patented system for analyzing large amounts of textual computerized material [33, 39]. DT is a textual database analysis system consisting of two major components: (1) algorithms for extracting multi-word phrase frequencies and phrase proximities (physical closeness of the multiword technical phrases) from any type of large textual database (2) interpretative capabilities of the expert human analyst [33].

Technology Development Envelope (TDE) method is applied for identifying the optimum path in developing a technology roadmap in which technology strategies and business strategies are combined [40, 41]. The combination of Delphi method and hierarchical decision (AHP) is used as a foundation for building the TDE concept [41, 42].

Patent analysis—also known as technology portfolio [28]—could also be implemented in the strategic technology planning on the foundation of technology roadmapping and technology forecasting [43–47]. Yoon [43] and Huang [48] had shown that even though the patent analysis is a powerful technique in technology planning, it is not yet clear whether the analysis is applicable to technology planning—on the foundation of roadmapping and forecasting—over all industries. This condition is a result of different strategies among companies in protecting their innovation. Due to divergence between the use of patents versus. trade secrets according to the characteristics of industries, patent analysis might be inappropriate to some industries.

Analytical Hierarchy Process (AHP) is one of the most well known methods in the area of technology planning [42, 49]. AHP is a comprehensive approach to decision making in a complex system. The basic rule in AHP is to decompose decision problem into a hierarchy of more easily comprehended sub-problems so each of the sub-problems can be analyzed mathematically and independently [50].

Number in bracket refers to author(s) as listed in Table 2.

Table 2 List of author(s) as indicated in Fig. 2
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5 Combined Approaches of Market and Technology

During categorizing all methodologies and approaches in the area of technology planning, we found some other methodologies that are considered to fall into a combination of market and technology approaches. These methodologies include: change management approach [51, 52], synergy making and horizontal technology strategy [21, 25, 53], level of acquisition strategy [20, 21, 23, 25, 54], technology leakage control [23], human resources approach [27], scenario planning [55–58], cost of innovation [59], flexible planning logic [60], axiomatic design approach [61], innovation matrix [62], and technology audit [63].

Integrated portfolio, proposed by Ernst et al. [28], is a combination approach of market and technology portfolio. This approach is developed based on the assumption that pure technology or market portfolios have a one-sided focus on either technology or product market. New technologies have to fulfill market needs to avoid them failing in the market. Integrated portfolio concept is trying to overcome this shortfall by combining market and technology analysis.

Integrated portfolio can be a powerful tool for strategic technology planning purposes because it offers an efficient and effective way to better align market and technology being developed in R&D. Integrated portfolio combines a widely known and used market portfolio concept with a patent portfolio capturing technological aspects [28].

Number in bracket refers to author(s) as listed in Table 3.

Table 3 List of author(s) as indicated in Fig. 3
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6 Analysis and Discussion

6.1 Strategic Technology Planning Approaches Before and After the 1980s

There is a number of interesting facts based on the Figs. 1, 2, 3 to be analyzed. This chapter observed two distinct groups on the approaches of strategic technology planning, before the 1980s and from 1980s until the present. Before the 1980s, the number of publication was much smaller, with the focus of approaches on the market side. Among those approaches, the most widely used was the very well-known method called BCG growth matrix, developed in the early 1970s, which is still applicable to today’s business condition. During that era, many companies approached their strategic technology planning with heavy emphasis on marketing side (market pull strategy) as their competitive advantages.

Fig. 3
figure 3

Publications on Strategic Technology Planning: Combined Approaches (in order of publication time)

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The second group, which is much bigger in quantity, arose and developed in the era of mid 1980s until the present, as shown in Figs. 1, 2 with the focus on both market and technology sides. The technology side gained more attention during this period as shown by the publication number. This is understandable since embedding technology planning—as a part of technology management—into overall business strategy has gained a lot of attention both to academicians and practitioners. There are two major reasons for this phenomenon.

First, since the mid 1980s, the subject area of strategic technology planning has grown a significant interest both for scholars and practitioners as a consequence of rapid technological change. This change has attracted many scholars to explore different approaches, models and methodologies, whether for academic purposes only or industrial application purposes. While on one hand this is a reflection of the richness, diversity and relevance of the field, on the other it demonstrates a comparative conceptual weakness in terms of the lack of a common theoretical base to which all contributions may be referred [64].

Second, the internet was opened to general users in the late 1980s or early 1990s and this new era of information and communication technology has played an important role not only in electronic commerce, but also in the flow of information and data. Accessible online journal database has shortened the time for scholars and business practices to get information to support their research and then modify and implement the knowledge for their own purposes.

This chapter also noted an interesting development occurring during the 1990s in terms of the approaches and methodologies in strategic technology planning. During that era—as shown in Fig. 3—a number of chapters were published with the emphasis to look at the two sides, market and technology and how to integrate them into overall business strategy. Globalization and advanced technology development that took place in the early 1990s reshaped the competitive business environment. In response to these changes, companies were developing new competitive strategies, which in turn require new global organizational structures to be effectively implemented [65]. These conditions had led academicians and practitioners to explore the ideas of how to manage technology that is beneficial for companies and pursue long-term objectives, an idea that has been debated by all major companies. Over the years, all of them have attempted to address these issues through a variety of approaches. Farrukh et al. [66] indicated that companies perceived and implemented strategic technology planning approaches in various ways. However, a company needs to aware that there is a real risk that solutions based on very different theoretical foundations could have a damaging effect on business operations if implemented simultaneously [64].

6.2 Focus of Strategic Technology Planning Approaches

Due to the variability in approaches and contents in each methodology identified on strategic technology planning, this chapter categorized them into three predominant categories; (1) market focus analysis; (2) technology focus analysis; and (3) combination of market and technology. Each category had a different perspective based on the business priorities and the development of certain technologies at that time.

Pure technology or market analysis has a one-sided focus on either technology or product market. On one side, new technologies have to fulfill market needs to avoid them failing in the market (market pull). On the other side, new technology can also be pushed into the market to create a new market or expand the market (technology push). The degree of difficulty in balancing and integrating the two approaches will mainly depend on the environment. High-risk environment such as in emerging technology requires a deep understanding on two major factors: the nature of the changing business environment in the medium to long term; and the capabilities of the company.

Technological considerations need to be addressed in formulating strategic technology planning. These considerations include both external factors, such as the nature of technological change and competition level, and internal factors, such as technological capabilities and business priorities. Technology Management Framework, proposed by Probert et al. [64], described how a company needs to formulate strategic technology planning based on two dimensions, market/commercial perspective and technological perspective. The framework talked about how to incorporate strategy, innovation and operation level into both perspectives.

6.3 Challenges in Strategic Technology Planning approaches

While many companies are concerned about how to best align technology resources with business objectives (as market/business conditions change, new opportunities arise, and new capabilities are developed), there appears to be little commonality in the approaches adopted to support strategic technology planning, despite of all the techniques that had been mentioned above. Technology planning tends not to be identified as a specific business process, but rather as embedded within other processes, such as a general strategy and planning, innovation, new product introduction and R&D management [25, 66]. Companies face various challenges developing and implementing technology planning into their existing processes and operations.

In terms of strategic technology planning contents, this chapter is able to identify three issues/challenges in the area of technology planning approaches. As in any other academic chapters, these challenges are an open door for future research to address them.

First, for all the approaches that have been presented in this chapter, little evidence has been found on how well the methodologies and approaches align technology planning with business performance. A technology scorecard could be utilized to align the technology investment of companies with their business performances.

Second, it is worth noting that all of the approaches analyzed in this chapter—especially the combined approaches—build on the foundation of technology roadmapping [3, 15, 25, 31, 32, 38, 39, 41, 42, 52, 56, 62, 66–74]. The process of technology roadmapping is used by a range of companies to support technology strategy and planning [66].

Third, this chapter also found little evidence of an approach or framework that can align between product technology planning and innovation database through the use of the innovation management database as a tool in technology planning.

7 Conclusions, Limitations and Future Research

Strategic technology planning is an important activity across any industry or company types, driven by increasing competition, market requirements, regulation, technology change, company strategy and product/service innovation [66, 74]. Strategic technology planning has gained increasing prominence globally. It has been practiced for some time and academicians and practitioners’ interest in the technique has recently picked up and evolved through various stages, with shifts in focus and approaches that is considered to give their companies a competitive edge. Many are looking to develop more formal procedures that would smooth the way for the introduction and implementation of strategic technology planning techniques. Of course, technology eventually will find its way into the workplace, with or without planning. However companies that fall back on a reactive, “as needed” approach in their adoption of new technologies runs the risk of making costly, personality-driven choices, rather than tactical decisions that align with their larger corporate strategy and goals [75].

Some of the ongoing research is concentrating technology planning on the foundation of roadmapping with the purpose to align the technology planning with business performance. The main reason for this is that technology roadmapping is considered to reflect ‘all the plans (technology and business performance)’ and as such build on rather than replace existing techniques in use within a company [66].

There are a number of limitations to this chapter. First, a literature review for the broad category of strategic technology planning tools and approaches is a difficult task, due to the extensive background knowledge needed for studying, classifying, and comparing these publications. Second, this chapter only reviewed journal literature as the primary source of information, thus does not represent the entire body of strategic technology planning literature.

Table 4 describes some potential future research based on the current knowledge gaps that this chapter is able to identify.

Table 4 Knowledge gaps and future research opportunities
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