Technology Management

UNIVERSITY OF BEDFORDSHIRE

BUSINESS SCHOOL

UNIVERSITY CAMPUS MILTON KEYNES

STRATEGIC TECHNOLOGY MANAGEMENT
(BSS028-6)

GROUP ASSIGNMENT

Submitted by:
Seemant Gupta (1317911)
Victor Pepple (1314189)
Shoaib Khalid (1316594)
Yusuf Isa (1316781)

CONTENTS

1.0 INTRODUCTION.......................................................................................3
2.0 FRACKING TECHNOLOGY.....................................................................3
3.0 FRACKING CHEMICAL...........................................................................4
4.0 FRACKING TECHNOLOGY AND INNOVATION.....................................4
5.0 NEW FRACKING CHEMICAL TECHNOLOGY LIFE CYCLE..................5
6.0 TECHNOLOGICAL CAPABILITIES OF THE FRACKING
CHEMICALCOMPANY...................................................................................6
7.0 CURRENT STRATEGY OF THE COMPANY...........................................7
8.0 CURRENT OPERATION STRATEGY OF THE COMPANY....................7
9.0 CURRENT SITUATION OF THE MARKET..............................................7
10.0 SWOT ANALYSIS OF THE COMPANY.................................................8
11.0 TECHNOLOGY POSITIONING MATRIX OF THE COMPANY.............10
12.0 CONCLUSION.......................................................................................10
13.0 REFERENCES.......................................................................................12

1.0 INTRODUCTION
The aim of this report is to analyse the application of technology management framework to a given new technology in the development of an ingenious fracking chemical. The fracking chemical of focus is a long awaited innovative and environmentally safe mixture of chemical fluids aggressively pumped into underground formations in order to infiltrate low permeable rocks, aerate dense fluid column and trap dissolved gas which is brought up surface for extraction.
Going concerns and social agitations has been that the older versions of fracking fluids developed were environmentally unsafe. This is because they were known to be toxic chemical mixtures which had the potential of polluting the source of water i.e. the water table. Hence, the development of a safe fracking chemical is welcomed with the hope of exploiting a niche market for environmentally safe fracking chemicals.
As a result, this report looks in to the current position of the technology management framework for the new fracking chemical. This entails analysing the position of the technology in its life cycle, understanding the current technological capabilities of the company which developed this fluid, the company’s strategic objectives, its operational strategy, and estimating the way forward.
Although the claims of the technology have been a controversial subject, an examination is made into understanding the different opinions to this technology. 2.0 FRACKING TECHNOLOGY
Many scholarly articles have been written on fracking, as it is no longer a new technology being widely practised in US and most part of North America (Pierce Jr, 2013). Green (2013) revealed that hydraulic fracking started since 1940s where drilling horizontally through shale layers for hydrocarbon recovery became popular in parts of Pennsylvania, Oklahoma and Texas in the United States of America. As at 2011, shale gas production in the US was approaching 30 billion cubic feet per day.
Healy (2012) described fracking as a method used by petroleum drilling engineers to stimulate and recover hydrocarbon from underground reservoirs.
Fracking technology involves the pumping of a mixture of chemicals sand and water into underground reservoir formation at high pressures, penetrating through fissures, pores and crevices of hard rock formations underground so that dissolved gas bubbles are trapped in water solutions which are then pumped back up surface and processed to recover the entrained gas.
Potential risk and benefit tradeoffs in fracking operations to recover shale gas and tight oil resources were examined by Inglesby et al., (2013). The report argued that recovered shale gas has significantly increased fuel available for electric power generation, transportation and industrial purposes thus revamping the US economy. More jobs have been created, consumer energy bills have reduced, and domestic energy production has increased thus reducing dependency on imports.
3.0 FRACKING CHEMICALS
Healy (2012) further reported that in order to accelerate the fracking, the following components are typically added to pumped water solution:
Quartz-rich sand is added as proppants to crack open the crevices in the sub surface formation.
Acids are added to help initiate the fractures.
Corrosions and scale inhibitor chemical additives are added to protect the pipe linings used in the operations and
Other chemical additives to alter the viscosity of the fluid flow.

Recently in the news, fracking chemicals have been claimed to cause a lot of socio-economic agitation such as sex hormone imbalance leading to infertility, cancer and birth defects (Greffiths. 2013). These claims were supported by NHS studies in England.

A US supreme court in Wyoming recently moved in favour of disclosures of what chemicals are used by dealers in fracking operations (Brinkerhoff, 2014). This was necessitated by water contamination found near fracking well sites of which the company involved would not divulge what chemicals were used, claiming protection of trade secrets.

An investigative report into the fracking chemicals used by Cuadrilla, a known fracking company has it that the chemical contents include Hydrochloric acid, FR-40 friction reducer, ucarcide biocide, StimLube W friction reducer, breakers, corrosion inhibitors, gelling agents, crosslinkers, oxygen scavengers, pH adjusters, scale inhibitors, and surface acting agents (Radix, 2014).

4.0 FRACKING TECHNOLOGY AND INNOVATION
Whereas technology is the application of science to solve human problems, innovation is the introduction of creativity and ingenuity to bring about better solution to the market (OECD, 2011). Solutions could be in the form of improved products, services or marketing strategy, organisational strategy, operational strategy and so on.
In the case of fracking chemical, the original chemical manufacturer has produced an environmentally safe fracking chemical that should compete favourably in the market because it offers solutions to concerns of chemical pollution of the water table during this operation with older chemicals in existence.

5.0 NEW FRACKING CHEMICAL TECHNOLOGY LIFE CYCLE
Life cycles enables an understanding of what operational strategy, marketing strategy and technological management strategy an organisation should adopt at each point in time (Cetindamar et al., 2010).
The graphical representation below gives an understanding of technological life cycle mapping:

Figure 1: shows the technology life cycle graph for new fracking chemical Source: Phillpott (2014)
Technology life cycle as seen in the categorization above, presents a clue for identifying the new fracking chemical product as a technology on development (the blue area of graph). This is because, for a market demand driven fracking chemical, the non-linear innovation of the manufacturing company stands a chance of winning or losing the market depending on what internal or external routes it decides to explore to penetrate the market with its new solution at an introductory phase.
Hence an understanding of whether this technology is radical or incremental is necessary in driving the technology management process. To the market, users might consider an environmentally safe fracking chemical as an incremental innovation which improves upon older versions of chemicals used, whereas to the manufacturer, it is a radical/disruptive innovation to come up with a long awaited market solution. As such, the marketing strategy of the manufacturer should seek to quickly penetrate the market at an introductory stage of its products.
At this stage, the manufacturing company needs to decide whether it would go into international marketing partnerships in order to actively connect with global markets or it would consider licensing its technology due to insufficient resources to drive the marketing needs (Afua, 2003).
On the other hand, older fracking chemicals existing in the market tend to have gotten to their degraded technology stage in the life cycle where patent protection has expired. Hence, profitability at this decline stages begins to drop due to the fact that open innovation at this point naturally takes off and potential new discoveries or alternative technology could possibly emerge (Chesbrough et al., 2006). This is the ideology of the S-curves which predict how quickly a given technology fades away with time and is replaced by more efficient models. Thus the new innovator stands a market opportunity since it has the resources to establish a niche market penetration network
6.0 TECHNOLOGICAL CAPABILITIES OF THE FRACKING CHEMICAL COMPANY
Here, the focus is to establish what the core strengths of the company are in terms of its business marketing processes, its product, and the production process which creates the product offered to the market. Ford and saren (2002) proposed that acquisition, management, and exploitation of technology are dependent on understanding the internal and external capabilities of a company. Hence, a probe into the acquisition of this technology is necessary in bench marking and analysing the competitive strength of the new fracking chemical.
Furthermore, it could be seen that this new technology of an improved and environmentally safe fracking chemical is a product of high-technological research and development, distinct from the other existing chemicals in widespread use. As such the company is an original inventor with rights to intellectual property protection of which it is already good at doing.
More so, the company has a market reputation for being an established research and development firm with advanced knowledge and significant income from previous patents (Butchart 1987). Thus suggesting that it has the resources to acquire, protect and defend its patents, having the requisite absorptive capacity in understanding its market environments and needs. Based on the aforementioned, the company’s capabilities could be established through technology audits to ascertain current positions and what strategies would best suit marketing and operational objectives.
Hence, the company need to know that its current strengths lay in the fact that it has a product the market needs, it internally developed the technology for this chemical formulation and that it has significant resources to exploit her invention to the fullest. However, with the necessary aid of international market partners to network product penetration and sales performance in specific regions/countries targeted.

7.0 CURRENT STRATEGY OF THE COMPANY
Strategy stipulates the critical objectives a firm wishes to focus its strengths on developing in order to obtain a long term market competitive advantage (Heizer and Render, 2014). The company operates on a market differentiation strategy, proposed by porter 5 models (Porter 1985). Serving a niche market of chemical lubricants used in deep shale gas fracking operation, the company reserves the right to exert premium price influence on the market, thus making a high profit margin.
With a target to serve global markets from headquarter location in the United Kingdom; the current priorities would be about sourcing out for the best marketing partners to deal with.
Delivering well researched fracking lubricant formulations that will meet the acceptability criteria of market needs will also potentially be top on the objective of the company.
8.0 CURRENT OPERATION STRATEGY OF THE COMPANY
This has to do with understanding the geography of where the company is currently located, its target customers location and what networks would deliver the products. This would enable the company to plan adequately for the future.
At a developmental stage of the technology driven venture, it is often the case that the company’s best talents-its employees would be a group of people working with highly tacit business secrets which are codified hence would need to be treated as company assets. Hence it would be in the best interest of the operations to maintain the company operational base within a highly absorptive environment where its employees could be in close contact with technology market needs, advancements, technical interest groups and network of like minds in fostering knowledge growth (Cohen and Levinthal 1989). Perhaps, this is the motivation why Google Company is moving its world headquarters from California to the heart of London kings cross location (Norman, 2013). Regardless of the massive cost implication of this operational change in headquarter location, the company whose business strategy is to sell it products and services to a differentiated market still deems it smart investment choice to bring its employees to the centre of action and networking with other innovators next door.
Also, a clear environmental waste management plan, recovery, and recycle framework will be required to assure customers of the manufacturer’s end of lubricant life responsibility.
Consequently, staff engagement, motivation and welfare will amongst other critical factors, be a top internal operational priority to the chemical manufacturing company. Therefore, operational strategy in terms of marketing its product worldwide would require international market networks to effectively drive sales in target countries.
9.0 CURRENT SITUATION OF THE MARKET
Here we seek to examine the absorptive capacity of the technology; taking into consideration is timeliness in responding to market demand of the environment where fracking operation occurs.
Environmental Agency, 2013 has it that run offs and infiltration from fracking chemicals get into ground water which is often a complex pollution to remediate, given that the aquifer has been contaminated with complex diffusing hydrocarbons. As a result, public outcry has been against fracking operations in parts of England and Wales. Varying arguments has it that fracking for shale gas recovery holds no solution to rise in energy cost and stability of supplies when a holistic cost benefit view is taken (Brown, 2013).
Hence the invention of eco friendly chemical promises to reduce the level of toxicity introduced into groundwater where other versions have failed to address this problem. Being a technology on development with core R&D operation located in UK, licensing, franchising and joint venture partnership are some options of marketing processes it could consider in getting products to global markets.
However, strategic objectives need to be clearly defined as proposed by Afua (2009). Afua came up with the Activities Value Appropriability and Change (AVAC) framework, which explores the profitability of a firm’s strategy with recommendations for improved performance on its core business. Thus the firm leverages on an opportunistic innovation strategy with its new technology to offer unique value to its customers as old competitor chemicals come to the end of life with no known alternative environmentally safe fracking chemical yet in existence. This idea is supported by Ford and Saren (2002) which concurs that winning current technology driven markets requires a business strategy that integrates innovation plans in line with a firm’s resources and core strengths.
10.0 SWOT ANALYSIS OF THE COMPANY
It is imperative to discuss with strength, weaknesses, opportunities and threats of the company manufacturing the fracking chemical with a view to understanding its current position in the market.
Strengths
The following factors could be considered as key selling points for the company.
These include:
It develops its technology internally using robust research and development employees.
It is experienced in filing and managing patents.
It is a distinctive market leader, making first entrance into the market with an anticipated new eco friendly fracking chemical.

Weaknesses
Over optimism on the new technology
Reliance on one core business of technology development and patenting
Operating in the technology development phase, employees who handle tacit information are in a higher bargaining position of power to the company. This could be manipulated against certain interest.
Opportunities
Operating a segmented market affords the chance to sell at premium price, hence increase profit.
It could compete on both strategic objective of market differentiation and cost leadership if can motivate and convince its research and development employees to move from the United Kingdom to some other cheaper operational base. Although this could have its after effect downsides through cutting off the absorptive environment necessary to stimulate productivity among the think tanks who’s expertise drive the business.
If the company becomes successful with its product in the market, it could become a standard to other innovators/competitors.
It could go into international marketing partnerships that would drive its profitability/market capture within the shortest possible time.
Threats
The company could be vulnerable to counterfeiters if does not impact the market as quick as possible utilizing efficient marketing networks
The technology could be overtaken by some other radical innovation which completely replaces the use of fracking chemicals

11.0 TECHNOLOGY POSITIONING MATRIX OF THE COMPANY
Considering the product, market, and the technology as the deciding variables, the position of market attractiveness of the company could be understood in order to ascertain where the stake lie in commercialization process (Ford and Saren, 2009).
Although several other models such as the Roberts-beny model, Abernathy and Clark Model, Henderson-Clark Model, Teece Model, Utterback-Abernathy, Tushman-Rosenkopf technology life cycle model and Foster’s S-Curve have been formulated on appropriate strategic frameworks for evaluating technology, Ford and Saren’s proposed model tend to be suitable in the case considered.
Therefore a model which relates the strength of the company’s technology to market attractiveness is shown below:

Figure 2: Shows the technology and market interplay. (Source: Ford and Saren, 2002)

As seen in the figure above, the new fracking chemical fall within the technological quadrant of new solutions to existing environmental degradation caused by the former chemicals used. As such this new technology is quite novel and based on market demand pull.

12.0 CONCLUSION
Whilst fracking technology and chemicals used have been well developed in America, unconventional shale gas recovery through fracking remains a highly debated subject in the United Kingdom. These were seen to be as a result of deferring views on how disruptive the technology is and how to draw the tradeoffs between potential risk and benefit opportunities of the operation.
However, the development of a new fracking chemical that is less polluting by this medium size R&D firm in UK, offers a win-win situation to the market and speculators. Hence as seen in this study, the inventor company is currently in a good market position to deploy its technology developed using its experience and finance to explore international marketing partnerships.
Therefore, it is recommended that having ascertained the current position of the fracking chemical innovation as a technology on development, distinctive, and market demand driven, it is imperative that market channels and entrance are quickly established in order to gain significant capture, prominence and profit. Else, the chances are that seconders may overtake the market and obscure the originators as witnessed in the case of Betamax and VHS videos.

13.0 REFERENCES
Afuah, A., (2003), Innovation Management, Strategies, Implementation and Profit, Oxford University Press 2nd edition.
Afuah, A. (2009), Strategic innovation: new game strategies for competitive advantage New York: Routledge. Pp 80-88.
Brinkerhoff, N. (2013). Wyoming Supreme court moves forward on public disclosure of fracking chemicals. [online] 28 March 2014. Available at: www.allgov.com/news/controversies/wyoming-supreme-court-moves-forward-on-public-disclosure-of-fracking-chemicals-140328?news=852787 [Accessed: 2nd Apr 2014].
Brown, T. (2013). Banker *destroy* argument for Shale Gas in a short letter. Financial times, 12th August 2013.
Butchart, R. (1987), A new UK definition of the high technology industries.
Cetindamar, D., Phaal, R., Probert, D., (2010), Technology Management: Activities and tools, Basingstoke, Palgrave
Chesbrough, H. W., Vanhaverbeke, W. and West, J. (2006), Open innovation. Oxford: Oxford University Press.
Cohen, W. M. & Levinthal, D. A., (1989), Absorptive Capacity: A New Perspective on Learning and Innovation, ASQ, 35 , 128-152.
Ford, D., and Saren, M., (2002), Managing and Marketing Technology, 2nd edition
Green, M. (2013). Fracking and innovation. Energy Tomorrow, [blog] 4th November 2013, Available at: www.energytomorrow.org/blog/2013/november/fracking-and-innovation [Accessed: 2nd Apr 2014].
Griffiths, S. (2013). Fracking chemical. [press release] 17 December 2013.
Healy, D. (2012). Fracking. Hydraulic Fracturing or ‘Fracking’: A Short Summary of Current Knowledge and Potential Environmental Impacts.
Heizer, J and Render, B (2014) Operations Management, 10th Edition, Pearson Education.

Inglesby, T., Jenks, R., Nyquist, S. and Pinner, D. (2012). Shale gas and tight oil: Framing the opportunities and risks. McKinsey, New York City.

Mitchell, E. (2013). Groundwater protection: Principles and practice. Environment agency, Available at: https://breo.beds.ac.uk/bbcswebdav/pid-2186710-dt-content-rid-4290955_1/courses/13-14S2ADBSS028-6/Groundwater%20protection_Principles%20and%20Practice_DEFRA.pdf. Accessed 3rd April 2014
Pearce Jr, R. J. (2013). Natural Gas Fracking Addresses All of Our Major Problems. Journal of Energy & Environmental Law.
National Health Service United Kingdom. (2014). Study tracks health effects of fracking chemicals - Health News - NHS Choices. [online] Available at: http://www.nhs.uk/news/2013/12December/Pages/Study-tracks-health-effects-of-fracking-chemicals.aspx [Accessed: 3 Apr 2014].
Norman, P. 2013. Google 's King 's Cross landmark gets thumbs up. Available at: http://www.pennynortonpr.co.uk/files/Press_coverage/Websites/CoStar_CBRE_Building_Consultancy_Team.pdf [Accessed: 3 Apr 2014].
Organisation for Economic Co-operation and Development (1996), the measurement of scientific and technological activities: Proposed guidelines for collecting and interpreting technological innovation data Oslo Manual European Commission, p. 10 [Online] Available at: http://www.oecd.org/dataoecd/35/61/2367580.pdf [Accessed: 3 Apr 2014].

Philpott, E. (2014) 'Week 4: Technology Life Cycle '. Strategic Technology Management. [Online]. Available at: http://breo.beds.ac.uk (Accessed: 31st March 2014).

Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.

Radix (2014). What fracking chemicals does Cuadrilla use? [Online] Available at: http://frack-off.org.uk/what-fracking-chemicals-does-cuadrilla-use/ [Accessed: 3 Apr 2014].

References: Afuah, A., (2003), Innovation Management, Strategies, Implementation and Profit, Oxford University Press 2nd edition. Afuah, A. (2009), Strategic innovation: new game strategies for competitive advantage New York: Routledge. Pp 80-88. Brown, T. (2013). Banker *destroy* argument for Shale Gas in a short letter. Financial times, 12th August 2013. Butchart, R. (1987), A new UK definition of the high technology industries. Cetindamar, D., Phaal, R., Probert, D., (2010), Technology Management: Activities and tools, Basingstoke, Palgrave Chesbrough, H Cohen, W. M. & Levinthal, D. A., (1989), Absorptive Capacity: A New Perspective on Learning and Innovation, ASQ, 35 , 128-152. Ford, D., and Saren, M., (2002), Managing and Marketing Technology, 2nd edition Green, M Griffiths, S. (2013). Fracking chemical. [press release] 17 December 2013. Healy, D. (2012). Fracking. Hydraulic Fracturing or ‘Fracking’: A Short Summary of Current Knowledge and Potential Environmental Impacts. Heizer, J and Render, B (2014) Operations Management, 10th Edition, Pearson Education. Inglesby, T., Jenks, R., Nyquist, S. and Pinner, D. (2012). Shale gas and tight oil: Framing the opportunities and risks. McKinsey, New York City. Norman, P. 2013. Google 's King 's Cross landmark gets thumbs up. Available at: http://www.pennynortonpr.co.uk/files/Press_coverage/Websites/CoStar_CBRE_Building_Consultancy_Team.pdf [Accessed: 3 Apr 2014]. Philpott, E. (2014) 'Week 4: Technology Life Cycle '. Strategic Technology Management. [Online]. Available at: http://breo.beds.ac.uk (Accessed: 31st March 2014). Porter, M Radix (2014). What fracking chemicals does Cuadrilla use? [Online] Available at: http://frack-off.org.uk/what-fracking-chemicals-does-cuadrilla-use/ [Accessed: 3 Apr 2014].