Tactical vs Strategic Licensing

Part I

Would you like to increase your bottom line – without additional capital or research investment?

Would you like to tap into new foreign markets – without investing in property, plants, or equipment?

Would you like to develop new technologies – without expanding your existing R&D resources?

Would you like a base level of revenues to help smooth out otherwise cyclical earnings?

Would you like your technology to become the industry standard?

Is all of the above too good to be true? Well, it’s all true! For more than two decades, major corporations as well as start-ups and companies in between have enjoyed these outcomes. An important vehicle these companies have used to achieve these results is technology licensing — licensing that they approach strategically, rather than opportunistically, to maximize the commercial value of their technology.

Tactical Licensing – Why and How

Even after two decades of proven results from technology licensing, there are still many companies that have yet to recognize its potential as a significant element of business strategy.

Often companies treat licensing as a low-priority, after-the-fact tactic. This “tactical” approach to licensing is used as a means to recovering a portion of the development cost, as long as the company’s strategic market position isn’t compromised by such licensing. In these companies, the licensing staff provides services to the business units only as needed and licenses only what the business units don’t want.

Strategic Licensing

At the other end of the spectrum are companies whose approach to technology licensing (and, more broadly, intellectual property licensing) is best described as “strategic”. These companies have effectively created sustainable technology-licensing businesses based on developing and realizing value from technology-based intangible assets.

Moving from Tactical to Strategic Licensing

Moving from tactical to strategic licensing doesn’t happen at the grassroots level of the organization. The decision to incorporate technology licensing as a key part of the overall corporate strategy is most often made by the CEO, and it’s made explicitly. At some point, the CEO decides that the company is going to begin using its intellectual assets in a way that is significantly different from the way these assets have been used historically. From an operations perspective, the transformation from tactical to strategic licensing requires a supporting evolution in three distinct areas:

• Business processes

• Resources

• Organization

In Part II of “Tactical vs Strategic Licensing” (our next month’s blogpost), we’ll explore in greater detail the “right” business processes, resources, and organization for a successful transformation from tactical to strategic technology licensing.

For more on creating value by commercializing technology, see https://www.prakteka.com/category/technology-commercialization/

We at Prakteka LLC developed our expertise in market penetration strategies in the context of numerous and diverse client assignments, all focused on using technology to create business value. We are here to help you answer business-critical technology questions, too.

For a customized plan for your needs, contact us at http://www.prakteka.com/contact-us/