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/

What is “Technology Assessment”?

Technology Assessment is a process by which the commercial potential of applied science and engineering can be determined.

“Technology” includes products, processes, devices, services or other embodiments of applied science and engineering.

The process is analytic and systematic.

“Potential” is influenced by a number of identifiable factors:

  • Technical feasibility
  • Requirements for/barriers to implementation
  • Available markets
  • Competing technologies

Technology assessment is useful in situations where client management is uncertain about the commercial prospects for its technology.

The output from a well-planned and executed technology assessment: both qualitative and quantitative answers to fundamental questions in technology-based businesses, e.g.,

  • “This technology is available to us…should we invest in it?”
  • “There are several technologies available to us…which should we choose?”
  • “What is this technology worth?”
  • “We have this technology…what (else) can we do with it?”

We at Prakteka LLC developed our expertise planning and implementing technology assessments 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 https://www.prakteka.com/contact-us/

For more on technology assessment, see the expanded discussion on our Prakteka LLC website, https://www.prakteka.com/category/technology-assessment/

If Your Business Depends on Intellectual Property

If your business depends on intellectual property (IP), then “best practices” for your IP business activities are those that…

…support the business objectives of the company and

…increase company value.

For any high-performing business, there are 4 key building blocks: strategy, processes, resources and organization. Here are these building blocks applied to IP business practices:

  1. Strategy: Which invention concepts are we free to develop? Which are worth patenting? Can we/should we consider an Engineering-to-Own-the-SpaceSM innovation Strategy? 1
  2. Processes: Who decides how and where we should invest our development dollars?
  3. Resources: Can we accelerate our development or broaden our reach by bringing in technologies from the outside? If so, which ones, from where, and for how much?
  4. Organization: Do our IP development initiatives and outcomes have top management’s attention, understanding, and endorsement?

Adopting high performance IP  business practices can enable you to:

strengthen and even shift the basis of your competition

protect IP that delivers high value to your customers and end-users

avoid product and/or technology obsolescence

We at Prakteka LLC developed our IP expertise in the context of numerous and diverse client assignments, all focused on using intellectual property to create and sustain business value. We are here to help you, too,  maximize the impact of your IP on business value.  For a plan customized to your needs, contact us at https://www.prakteka.com/contact-us/

  1. For more on the “Engineering-to-Own-the-Space” Innovation Strategy, follow this link to the SlideShare presentation: https://www.slideshare.net/mhastbacka/engineeringtoownthespace-innovation-strategy

Engineering-to-Own-the-Space is a service mark of Prakteka LLC.

Lessons Learned in Technology Assessment…Lesson 5…

This is the fifth of a series of posts to share with you six important lessons we’ve learned through our experiences working with numerous commercial clients in a variety of situations. On the path to your success in developing and commercializing technologies, they will help you avoid common pitfalls, unwarranted assumptions, and other sources of technical and commercial bias that could add up to business failures.

Lesson Five.

More Facts Mean More Focus.

The “end game” of any technology assessment is to formulate and implement a plan of action – a plan that has beneficial business outcomes. Begin every technology assessment with that plan of action in mind. Doing so will drive you to develop more facts related to your implementation plan. And developing more facts will sharpen your focus and help establish priorities.

Lesson Five Case Study:

Client:  Multi-plant commodity inorganic chemicals producer

Situation:

  • For both environmental as well as economic reasons, the client was interested in identifying ways to turn a waste stream into a marketable co-product.
  • The client had a vague idea that they could turn their waste stream into a mineral extender/filler/additive, but they were not currently selling into any markets with those types of raw material needs.

Technology Assessment Need:  Develop and characterize the potential “product/market” roadmap that could be addressable by the client’s upgraded waste stream co-product.

Our approach:

  • Analyzed the economic balance point between purifying the waste stream and its saleability as a co-product
  • Researched industry needs, by market segment, in terms of particle size and purity
  • Balanced market segment needs against the cost of refining the waste stream into saleable form

Outcome: We identified sealants as an attractive application area for the client’s co-product and projected the size of the client’s addressable market for the next several years.

On the basis of our findings, the client decided to adjust their manufacturing plant to focus on the specifications needed for the sealant market and to begin commercial development efforts directed toward that market.

For more on best practices in moving from lab-to-market, see https://www.prakteka.com/category/technology-assessment/

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Are you looking for new customers for your existing technologies and products?

Do you have excess manufacturing capacity you’d like to put to use?

Or are you launching a new product and need to understand which end-use applications are the most promising?

We’re ready and able to help you make your decisions with confidence. Contact us at https://www.prakteka.com/contact-us/

or via direct email at mah@prakteka.com

Lessons Learned in Technology Assessment…Lesson 4…

This is the fourth of a series of posts to share with you six important lessons we’ve learned through our experiences working with numerous commercial clients in a variety of situations. On the path to your success in developing and commercializing technologies, they will help you avoid common pitfalls, unwarranted assumptions, and other sources of technical and commercial bias that could add up to business failures.

Lesson Four.

Find Out if “New” and “Improved” REALLY MATTER!

In this era of “voice of the customer” and data analytics, coupled with feedback from an eager salesforce, the sheer volume and rate of change of market input to new product development and improved product development activities can be overwhelming. Keep in mind that not everything “new” or “improved” is valuable or useful to your customer.

Lesson Four Case Study:

Client:  Global producer and marketer in the graphic arts industry

Situation:

  • Client goal: 30% of annual sales from new product introductions
  • Global salesforce suggested over 80 “must have” or “want to have” features for the next-generation graphic arts equipment, whittled down to 25 features after internal review
  • Resources required to develop and introduce these 25 features: $40 million

Technology Assessment Need:  Determine which of these 25 features really mattered to its global customer base

Our approach:

  • Identify 160 lead users of graphic arts equipment in 7 countries on 4 continents
  • Developed statistically based array of interview questions to elicit which new product features really mattered to them and why?

Outcome: Our work led to 2 important findings

  • First: our client’s current generation of graphic arts equipment very closely matched the equipment that was top-rated by our group of lead users. In fact, there were only 2 feature areas where our client’s equipment lagged the ratings of the top-rated competitor.
  • Second: we learned that the 25+ new “bells and whistles” initially proposed would not position our client well for the future. Customers of our client were positioning themselves to respond to the rapid technology changes associated with digital graphic arts equipment and were changing their ways of managing their capital expenditures in this area.

Based on our findings, our client company decided to allocate a portion of its $40 million product development budget to tackling the two features that customers rated lower than those of its competition. The rest of the development budget was redeployed to related product management activities and exploration of emerging digital technologies, both of which held promise for a sustainable impact on the bottom line.

For more on best practices in moving from lab-to-market, see https://prakteka.com/category/technology-assessment/

_________________________

Are you looking for new customers for your existing technologies and products?

Do you have excess manufacturing capacity you’d like to put to use?

Or are you launching a new product and need to understand which end-use applications are the most promising?

We’re ready and able to help you make your decisions with confidence. Contact us at https://www.prakteka.com/contact-us/

or via direct email at mah@prakteka.com

Lessons Learned in Technology Assessment…Lesson 3…

This is the third of a series of posts to share with you six important lessons we’ve learned through our experiences working with numerous commercial clients in a variety of situations. On the path to your success in developing and commercializing technologies, they will help you avoid common pitfalls, unwarranted assumptions, and other sources of technical and commercial bias that could add up to business failures.

This lesson: Think of your technology as a “functionality”

Technology needs to be useful – it needs to “function” in ways that are useful to prospective customers. Chances are your technology has multiple potential end use applications that you haven’t even thought of yet.

Lesson Three Case Study:

Client: Custom manufacturer and converter of polymers and fabrics with patented silicone-coated fabric technology. This proprietary technology enabled a useful finished product: surgical drapes that could withstand multiple sterilization cycles.

Situation:
• Manufacturing line for the novel surgical drape products was running at much less than capacity.
• Client wanted to fill the idle capacity without investing new capital.
• The obvious line extension would be other types of “reusables” sold to the medical products industry, but that industry was already saturated with a host of reusables as well as disposables, available at very low cost.

Technology Assessment Need: Do any other high-value end-use applications exist for products our client could make using its proprietary technology and its existing manufacturing capabilities?

Our approach:
• Identify the functions of the client’s product as viewed by its customers
• For each of the product’s useful functions, assess quantitatively its “value-in-use” to the customer
• Identify other addressable market segments/customers with similar functional requirements and value-in-use needs and for which our client’s product could be immediately useful and cost-competitive.

Outcome: Tapping relevant industry experts, we discovered that:
• It’s common practice in the nuclear power industry to contract out for services related to maintenance worker uniforms.
• In the textile rental segment of the nuclear services market, disposable fabrics are not used
• Maintenance worker uniforms with increased service life and/or greater feeling of comfort and durability have a competitive edge.

By viewing our client’s technology in terms of its functionality, we identified a potential new market segment and gave sharp focus to our client’s subsequent end-use applications development plans.

It’s not necessarily easy to find such out-of-the-box solutions. In this case, we brought together a range of end-use industry experts to bring fresh input to generating potential new applications for our client’s technology and product.

…Are you looking for new customers for your existing technologies and products?
…Do you have excess manufacturing capacity you’d like to put to use?
…Or are you launching a new product and need to understand which end-use applications are the most promising?

We’re ready and able to help you make your decisions with confidence. Contact us at http://www.prakteka.com/contact-us/
or via direct email at mah@prakteka.com

 

 

 

 

 

 

 

 

Lessons Learned in Technology Assessment…Lesson 2…

This is the second of a series of posts to share with you six important lessons we’ve learned through our experiences working with numerous commercial clients in a variety of situations. On the path to your success in developing and commercializing technologies, they will help you avoid common pitfalls, unwarranted assumptions, and other sources of technical and commercial bias that could add up to business failures.

Lesson Two.

Avoid Single-Point Projections.

Whether you’re talking about sales, profit, or manufacturing cost projections, single point projections can be misleading.

Lesson Two Case Study:

Client:  Producer of bulk fine chemicals with new, developmental production technologies

Situation:

  • This producer believed that its family of 10-12 developmental production technologies provided a cost advantage over its established competition.
  • This “belief” was based on single-point manufacturing cost projections for each of its developmental production technologies.
  • The client had already invested almost half of the required time and financial resources needed to take the technologies to a commercial stage.

Technology Assessment Need:  The client was uncertain about possible problems in production scale-up, which could affect manufacturing cost, and wanted an outside third party to assess the technologies before further investments were made.

Our approach:

  • Utilizing an analysis tool called “technical cost modeling”, we developed manufacturing cost probability curves for each of the production technologies.
  • We also developed cost probability curves for the production technologies already in use by our clients’ competition.

Here is what our cost modeling analysis revealed:

  • Even though there were differences between the average cost of our client’s production technologies and the technologies of its competition, there was significant overlap in the cost probability curves, i.e., the likely production costs for both our client and its competition were much closer than our client’s single-point cost projection led them to believe.
  • Among our client’s 10-12 developmental production technologies, only 3 or 4 possessed manufacturing cost differences distinct enough to be a basis for competition in the marketplace, although the client had invested in scale-up for all.

Outcome: Our client chose to commercialize only those few technologies that showed significant and sustainable cost advantage.

For more on best practices in moving from lab-to-market, see http://www.prakteka.com/category/technology-assessment/

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Are you about to make decisions regarding investments in R&D scale-up? In manufacturing?

Are you basing those investment decisions on cost projections? Sales projections? Profit margin projections?

We’re ready and able to help you make your decisions with confidence. Contact us at http://www.prakteka.com/contact-us/

or via direct email at mah@prakteka.com