Transcript Market Assessment

The Commercialization
of Technology
Dr. Michael Stankosky
OVERVIEW
• ENTREPRENEURSHIP
• ENVIRONMENTAL ASSESSMENT
• GLOBAL OPPORTUNITIES FOR ENTREPRENEURS
• INNOVATION ECO-SYSTEM
• QUESTIONS
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ENTREPRENEURSHIP
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Yet so far!
Good work, but I
think we might need
just a little more
detail right here.
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Entrepreneurship: An Evolving Concept
• “entre prendre” - meaning “to undertake”
• The Entrepreneur: Characteristics
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Personal initiative
Ability to consolidate resources
Management skills
Tendency towards autonomy
Risk taker
Competitive
Goal-oriented
Aggressive
Ability to employ HR
• Definition and History
– No specific definition
– History dates back to the 1700s in France
– Linked to free enterprise and capitalism
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The Entrepreneurial Revolution
• Entrepreneurs: Challenging the unknown
– Recognize opportunities
– Athletes, Top Gun Pilots, Symphony Conductors
• Entrepreneurship: A Perspective
– Dynamic perspective
– More than just starting a business
– Attitudes
• An Entrepreneurial Economy
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Predominance of small firms and new ventures
10 years - 600,000 new businesses incorporated
90% of the business population
Provides “net” new jobs
Key to the US success economically
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Understanding the
Entrepreneurial Perspective in Individuals
“We need a person, in whose mind all of the possibilities come together, who believes innovation
is possible, and who has the motivation to persist until the job is done.”
• Entrepreneurs as the cornerstone of the American enterprise
system - Frank Carey of Pizza Hut
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Driven by commitment
Determined perseverance
Work very hard
Optimist
Strive for integrity
Competitive desire to excel
Failure is tool for learning
Confidence in themselves
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Major Themes that Characterize Entrepreneurship
• Entrepreneurial and managerial domains overlap to a high degree
• Venture financing has emerged since 1980
• Entrepreneurship within large enterprises has gained much attention
• There are key entry patterns and strategies to successful business start-ups
• Great variety of methods to start a new business
• Women and minority entrepreneurs have emerged in unprecedented numbers
• Worldwide entrepreneur growth
• Slow economic and social contributions
• Entrepreneurship education is in high demand
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ENVIRONMENTAL
ASSESSMENT
Market Assessment/ Evaluation of
Entrepreneurial Opportunities
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Commercialization and Marketing Strategy
• A Framework for
Marketing Management
– Corporate Missions and
Objectives
– Assessment of Market
Opportunities
– Market Segments Targeted
– Marketing Objectives
– Strategy Development
– Marketing Mix Formulated
– Marketing Program
Established
– Tracking System
– Evaluation and Control
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Environmental Assessment:
Preparation for a New Venture
“Coping with the constantly changing environment
is probably the most important determinant of a company’s
success or failure in a free enterprise system.”
Alan J. Rowe
• Environmental Scanning
– Efforts of the entrepreneur for examining the external and internal environments before
making a decision
– External Environment - opportunities and threats outside the organization
– Internal Environment - structure, culture, resources
– Task Environment
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Macro View
 Assessing the Economic Environment
– Questions to answer to avoid pitfalls
• Examples?
– Attitudes and skills needed for a proper assessment
• Examples?
– Understanding the regulatory environment
• A business must comply with governmental rules and regulations
• Government effect on small business
– Tends in policy formation
• i.e., Small Business Regulatory Enforcement Fairness Act
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Marketing Research for New Ventures
• Marketing Research
– What is it?
• Specific Objectives of Marketing Research
– Six objectives
• Secondary Data
– Information already compiled - Inexpensive - Sources?
• Primary Data
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New information accumulated through observation and questioning
Surveys - Day to day data accumulation
Interpreting and Reporting the Information
Summaries, tables, charts
EIS? - KM system?
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Marketing Stages for Growing Ventures
• Entrepreneurial Marketing
– Obtaining niche and credibility
• Opportunistic marketing
– Market penetration
• Responsive Marketing
– Develop the product market and create customer satisfaction
• Diversification Marketing
– New business development and managing the product life cycle
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Marketing Planning
• Marketing Research
– Process of determining who the clients are, what they need or want, how they buy
• Sales Research
• Marketing Information System
– Compiles and organizes data relating to cost, revenue, and profit from the customer base
– Effects strategies and decisions
• Sales Forecasting
– Process of projecting future sales through historical data and statistical analysis
• Marketing Plans
– Five Areas
• Evaluation
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Assessment and Evaluation of Entrepreneurial
Opportunities
Pitfalls in Selecting New Ventures
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Lack of objective evaluation
No real insight into the market
Inadequate understanding of technical requirements
Poor financial understanding
Lack of venture uniqueness
Ignorance of legal issues
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GLOBAL MARKETS
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Global Marketing Objectives
• Exploiting market potential and growth
• Gaining scale and scope returns at home
• Learning from a leading market
• Pressuring competitors
• Diversifying markets
• Learning how to do business abroad
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Driving Forces Affecting Global Marketing
Driving
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Common Customer Needs (Market Needs and Wants)
Technology
Regional Economic Agreements
Transportation and Communication Improvements
Product Development Costs
Quality
World Economic Trends
Transferable Marketing (Leverage)
Global Channels
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Restraining Forces Affecting Global Marketing
Restraining
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Industry Factors
Internal Resources
Different Mixes
Global Turmoil
Management Myopia and Organizational Culture
National Controls and Barriers
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Global Opportunities for Entrepreneurs
• The International Environment
• Entering the International Marketplace
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Conduct research
Prepare a feasibility study
Secure adequate financing
File proper documents
Draw up and implement the plan
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International Market-Entry Options
• Exporting
• Contracting
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Licensing
Franchising
Contract manufacturing
Management contracts
• Strategic alliances
• Joint ventures
– Advantages
 Provide path of entry into many foreign markets
 May open new market opportunities
 May provide relationship establishment with foreign authority figures
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Import Barriers
• Defined:
– Any obstacle making it difficult for a firm to enter a product market
• Classification of Barriers
– Tariff Barriers
– Non tariff Barriers
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slow customs
bureaucratic inertia in processing import licenses
Government regulations
Manufacturing access (suppliers, distribution channels)
Natural barriers
– Brand loyalty, promotional factors
 Advanced versus Developing Nations
 Exit Barriers
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The Exporting Option
• Exporting option often is the most attractive mode of entry to the global marketing
newcomer
• Indirect Exporting
– Hire a specialist to handle all of your export requirements
– Export Management Company (EMC)
• Direct Exporting
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Direct influence of the foreign marketing opportunity
Learn how to operate abroad
Develops a strategic involvement with the foreign market
Avoid extra “agent” fees
• Direct Exporting Functions
– Review and Discuss the Functions listed in Exhibit 5.2 on page 136
• Export Expansion Strategy
– Waterfall Strategy - an orderly expansion of exporting
– Sprinkler Strategy - quick penetration, preemptive first mover strategy
 Higher Risk - major commitments without the research and understanding of the market
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INNOVATION ECO-SYSTEM
Management & Commercialization
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The Management of Technology Innovation
• Why do we innovate?????
• Patterns of strategic behavior
– Induced strategic behavior
 From the corporate perspective
 Major investment
– Autonomous strategic behavior
• Conceptually equivalent to entrepreneurial activity and introduces new categories of opportunity into the
firm’s planning process
• Product championing and the informal network
• Product champion
– Organization member who creates, defines, or adopts an idea for an innovation and is willing to
assume significant risk to make possible the successful implementation of the innovation
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The Management of Innovation
Igniting entrepreneurial spirit
– Market for ideas
 Pursuing fresh ideas (resource attraction) that will create new business opportunities
– Bringing in new voices into the opportunity seeking process, radically changing the believe
that strategy is solely for senior managers
• Cross-functional barriers
– Turf – areas of expertise
– Interpretive – management opinions of tech project
– Communication – interdepartmental
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Managing Technology
• Classifying development projects
• Derivative projects
– Centers on incremental enhancements
• Platform projects
– Design the design and components shared by a set of products
• Breakthrough projects
– New core products, processes and services
• Research and development
– Creation of knowledge that leads to new developments
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New Product Development Process
• New product strategy
– Clearly defined strategy – particular product, market, and technology domains
• Anticipating competitive reactions
• Sources of Innovation (new product ideas)
• Lead users
– Small numbers of highly influential buying organizations who are consistent early adopters
of new technologies
– Designed to unearth new product ideas and to identify a revolutionary approach to infection
control
– Staying ahead of customers
– Proactively leading customers
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Evolutionary Forces Shaping Technology Strategy
• How a firm’s technology strategy changes over time
• Technology Evolution
– S-curve trajectories
• Industry Context
– structure, regime, assets to commercialize, emergence of designs, adoption of
technologies, industry standards, social aspects, competitive effects
• Organizational Context
– Ability to exploit opportunities
– Spontaneous and flexible response
– Ability to prioritize and balance challenges
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Taking Technology (Innovation) to Market
• Corporate management of technology requires
– Careful planning of the relationships between
 Technologies (competencies)
 Markets
 Development Activities
• Levels of R&D depend on
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Available resources
Competitive pressures
Market requirements
Process technologies - efficient product development
• Maximize R&D ROI
– Fullest market exploitation of the technology
• Technology - From idea stage to direct sells
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The Technology Life Cycle (TLC)
• A firm needs to understand the
TLC to get the most ROI on its
technology
• Stage 1: Technology
Development
Technology
Enthusiast
Visionaries
The Chasm
The Early
Market
Pragmatists
Conservatives
Skeptics
End of Life
The
Mainstream
Market
– 3 reasons for development
 Obvious application
 Sufficient financial resources
 Projected ROI
The Technology Life Cycle
– Other considerations
 Partnership?
 Sell the technology?
 Staff sophisticated enough to market the
technology
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The Technology Life Cycle (TLC)
• Stage 2: Technology Application
– Decision to continue to develop or sell the technology
– Cost and risk assessment
– Consider the potential returns from the technology as a whole - not just immediate sells
• Stage 3: Application Launch - “Performance Maximizing”
– Problems with licensing
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application of technology may not be refined sufficiently
delayed due to long lead times
ownership problems - “not developed here”
problems associated with buyer and “changes” required
– Delay of launch may be an alternative
– Skim the market to recover costs
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The Technology Life Cycle (TLC)
• Stage 4: Application Growth - “Sales Maximization”
– Market penetration considerations
 market size
 technology leadership
 Standardization
• Stage 5: Technology Maturity - “Cost Reduction Phase”
– Now in full competitive stage
– Production has leveled off for the originator
– Transfer to third world countries - turnkey deals
• Stage 6: Degraded Technology
– Reached a point of saturation and virtually universal exploitation
– License has expired
– Low commercial value
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Some Final Thoughts on Managing Technology
Innovation and Commercialization Strategy
• Market-Goal Orientation – Keep it real!
– Innovative companies consciously anchor their visions to the practical realities of the
marketplace
• Know that you are Managing Chaos!
– Innovation is a process that is rarely planned and controlled
– Not analytical - intuitive, tumultuous process
– Innovation is probabilistic
• Possible Solution?
– Form small, flexible teams to enhance motivation, interactivity, and accelerate progress
– Use “determined champions”
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SUMMARY POINTS
• DO YOU HAVE WHAT IT TAKES??
• WHAT DO YOU HAVE TO OFFER THAT IS OF VALUE??
• HAVE YOU DONE YOUR RESEARCH??
• DO YOU HAVE A COMPLETE BUSINESS PLAN??
• HAVE YOU GARNERED TEAM AND FINANCIAL SUPPORT??
• ARE YOU A LUCKY PERSON??
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?
QUESTIONS
Michael Stankosky, DSc
George Washington University
(202) 994-7518
[email protected]
www.gwu.edu/~iki
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