Phyllis Speser Foresight Science & Technology 401.273.4844, ext. 35 [email protected].

Phyllis SpeserForesight Science & Technology

www.foresightst.com401.273.4844, ext. 35

[email protected]

http://www.foresightst.com/

mailto:[email protected]

ForesightScience & Technology

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A Proud Traditionof Intellectual Leadership


3

M ar k et O r ien ta tio n Lau n c h T ac tic s

P r o d u c t Ad v an tag e

N ew P r o d u c t P er f o r m an c e O rg an iza tio n al P er fo r m an c e

Source: F. Lanerak, E. Hultink, H. Robben, “ The Impact of Market Orientation, Product Advantage, and Launch Proficiency on New Product performance and Organizational Performance,” Journal of the Product Development Management Association, V. 21, #2, March, 2004, p.89

The Key


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QFD House of Quality for Packable Camping Toaster

Direction of Improvement Customer Rating

Customer Requirements

Design Requirements

Import

ance

(1-

5)

Weig

ht

Avg

. tem

pera

ture

Po

wer

Tim

e t

o r

ech

arg

e

DSP

Inst

ruct

ion

s

1 2 3 4 5Heats evenly 3

Performance Toasts both sides 1Reusable 4Easy to carry in pack 5

Turns off automatically 3Usability Controllable settings 4

Safe 5Price Under $40 5

Absolute Importance 45 59 54 10 24Your Name 5 1 = low, 5 = high

Technical Competitor 1 4Evaluation Competitor 2 3

Competitor 3 21

Targets 1 lb 155 C 500 W10 min 200 MIPS

#X


5


6


7

Sell Customers Not Technology


8

Product Advantage Changes over Time

W e ight

R o ad W ar r io rN o teb o o k

D es k T o pR ep lac em en t

P D A Traje c to ry o fE nd U s e r W e ightR e quire m e nt

Time


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Technology has to Change Too

5 W’s

Who is doing it?What is being done?Where are they doing itWhy is it being done?When are they doing it?

Sell intellectual assets that can provide “a proven solution for a repetitive activity.

Technology is a Tool for Doing Something


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Market Forces

D is tr ib u tio n w ith o u t M ar k e t F o r c e

D is tr ib u tio n w ithM ar k et F o r c eM ar k et F o r c e


11

Competition Cuts Sales

Initi

al S

ales

Prod

uct O

ne

Time

Rev

enu

es

Swamping Caused By Product Two

Introduction Occurs

Originally AnticipatedTransition to

Market Maturity for Product One

Take-OffAnd Transition

to Market Growth PhaseFor Product One

Sales

Produ

ct Two

Continued Sales

Product One

Without Sw

amping

Continued Sales

Product One

With Sw

amping


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Product Advantage over Time

Cost

Yield

Requirement

S1

Trajectory Technology 1

Trajectory Technology 2

S2

Time

Yield

S1a

S1b

S2a

RequirementS2b

Time

YieldRequirementa

S1a

TrajectoryTechnology 1 S1c

Requirementb

S1b

S2c

S2b

S2a

TrajectoryTechnology 2


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Lead all Players

Be in Top 5% of all Players

Lead all Direct Competitors

Be in Top Half of all Players

Crucial for Future Growth

Crucial for Survival

Intellectual Asset

(R&D)

Intellectual Property

Capacity

BusinessUnitStrategyImportance

Technology Space Gap EvaluationStar Trek Gap Analysis

Huh?


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Consumer consumption will ultimately decide success

“Think Supply Chain”


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CORE

Technology Familiarity

Mar

ket F

amili

arity

Control

Partner

Divest orMonitor

STRATEGY

Control:Internal

DevelopmentAcquisitionsIn-License

Partner:Joint VenturesAlliancesInternal VenturesOut-License

Divest:AssignmentsSales

Monitor:Venture CapitalEducational

Acquisitions

Market Development

TechnologyDevelopment

Adapted from Roberts and Berry, SMR 1988.

Own the Technology Space


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“Product” Advantage

Technological Options

67 7

4

7 7 7

4

2 2

8

4

89

56 6

3

8 8

67

8 8

56

8 8

0

2

4

6

8

10

0 1 2 3 4 5 6 7

Performance, Ease-of Use, or Price

Yie

l

Needs

Tech 1

Tech 2

Tech 3


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Intellectual Asset Portfolio

Core

Enabling

Enabling

Competing

Time

Clustering Assets

Core

Extension

Extension

Extension

Time

Bracketing Assets

Core Strategic

Time

Enabling


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Turf

TradeSecret

MaskTrade Mark

Copyright

PatentLicense

UnprotectedAssets

0

1

2

3

Hits

Occurances by Bohn Knowledge Level

Patents 0 1 0 0 0 0 0 0

R&D Projects 0 2 3 2 1 0 0 0

1 2 3 4 5 6 7 8


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Value Chain Fit

0

2

4

6

8

10

AppliedRes.

Eng. Devel. Produc.Eng.

Manufact. Sales Cust.Support

Developer

Partner

Complete R&D

Design Product

ProductionEngineer

Produce

Market and Sell

Support

Distribute

Capabilities• Experience• Resources• Skills


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Dominant Designs and Market Orientation

• Product Innovation Stage– Bundle of

Features– Standard User

Interface

• Process Innovation Stage– Eliminate Steps– Improve Reliability– Improve Efficiency

of Resource Use

Dominant Design Emerges


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Targets

End-Users

Source: Jolly, Commercializing Technology


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23


24

S kills

Absorptive Capacity

Ease- of- Use

T ime 2

T ime 1

Outputs

I nputs

CurrentS kills

CurrentCapacities

Goals

Dominant Design

T ime 1

T ime 2

D esi rabi l i t

y

of New S k i l l s

I n P ra ct i ce


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Finding Product Advantage: Ease of Use

• Expectations– Habitual Skills– Bohn Knowledge

Level (control over use)

• Know-how– Learned Skills– Experience

• Education“The eye of the masterwill do more work than the hand”


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P rac t ic e :L awye r ing

C o m pute rM anufac tur ing

Are na: L aw F irm

P rac t ic e :L awye r ingU ti l i ty

Utility

Are na: Trave l

Util

ity

P rac t ic e : P as s e nge r ing


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• Add-Ons• Ceiling

– Substitutes– Hurdle Rates (Average

Marginal Utility of Other Investments)

– Change-Over Costs– Avoids Sticker Shock

Finding Product Advantage: Price


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Time

Cost

Acquire

Develop

Decision

Sample Life-Cycle Cost Curves that Favor a Buy rather than a Make Decisions


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Introduction

Pioneering productsHigh productinnovation

Growing demandLow volumeProprietary focusMany new entrantsStandards wars

Decline/Disruption

New functionalitiesHigh product innovationNew demandMarket convergenceNew marketsNew competitionBarriers to entry dropNew business models

Growth

Dominant designMore processinnovationStabilizing demandHigher volumeStandards focusMany failuresAcquisitionsScale wars

Maturity

Generic productsHigh process innovationStable demandVery high volumeCost focusStable playersConsolidation and divestituresSupplier wars

Low

High

Labor Skill

Sales

Skeet Shooting the Opportunity


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new

mod

ified

exis

ting

Incr

em.

Rad

/Ada

ptD

isru

ptiv

e

Market Tech

Market Entry Riskfrom Bacon & Bulter, Planned Innovation


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The Pitch: Ability to Capture Value is Better* with you

* More Likely More Rapidly More Profitably


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Tactical Importance of Your Technology For Targets ≈ Importance For End-Users

• Offensive– Pacing– Emerging – Spare

• Defensive– Hedging– Imitative– Spare

Lead all Competitors

Be in Top 5% of all Competitors

Lead all Direct Competitors

Be in Top Half of all Competitors

Crucial for Future Growth

Crucial for Take-off

DefensiveOffensive

Impactfrom Use ofTechnology

Function


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Cost leadership Differentiation Focus

Appropriate Functional Product-team or FunctionalStructure Matrix

Integrating Center on Center on R&D Center onMechanisms Manufacturing or marketing Product or

Customer

Output Control Great Use Some Use (e.g. Some Use (e.g.(e.g. Cost quality goals) cost andControl) quality goals)

Bureaucratic Some Use (e.g. Great Use (e.g. Some Use (e.g.Control budgets, rules, budgets) budgets)

standardization)

Organizational Little Use Great Use (e.g. Great Use (e.g.Control (e.g. quality norms and norms and

control circles values) values)

R&D Focus Product and Emphasis on Customer needProcess innovation drivenDevelopment and speedingRather than productInnovation developmentWhich Riskier and internal(Bottom line technologyemphasis) transfer


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Source: McGrath & MacMillian, “Assessing Technology Projects Using Real Options Reasoning,Research Management,July-August, 2000

Your Technical Risk Decreases Value

Your Ability to AddressMarket Risk Increases Value


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Opportunity

Competitor

Competitor

Opportunity

Opportunity

Opportunity

Price

Performance


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Perform

ance

Ease- of- Use

S kills

Capacities

Goals

I nputs - Outputs

T ime 1

T ime 2

A t tra

cti v

eness

of Tec

h n ol ogy

Pri

ce

MarketForce

MarketForce

MarketForce


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39

Time

Re

ve

nu

es

Incremental RadicalAdaptive Disruptive

Type of Innovation


40

Gra

yLi

tera

ture

Ref

erre

dPa

pers

CRA

DA a

ndR&

DAl

lianc

es

Pate

nts

Prod

uct

Dev

elop

men

t

Proc

ess

Deve

lopm

ent

Prod

uct

Anno

ucem

ent

Series1

Series2

Series3

TIME


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Basi

c R

esea

rch

Appl

ied

Res

earc

h

Dev

elop

men

t

Con

curre

ntEn

gine

erin

g

Prod

uctio

n

Sale

s

0

1

2

3

4

5

6

7

8

9

10

Capacity

University

Small Company

Large Firm

Contract Manufacturer


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How well Application is Defined

How well Technologyis Defined

Option or license for all IP

CRADA, Contract R&D,Strategic Alliance

Application/geographyspecific licensing

Venture

Sales, OEM

Control over Use

Control overKnowledgeand Know-How

Buy all Rights,Acquire Developer

Non-ExclusiveLicense

Joint Venture

VentureCapital Exclusive

General License

Exclusive Limited License. CRADA, Strategic Alliance


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Fundamental/ Exploratory Research

Applied Research and Development

Concurrent Engineering

Manufactur-ing, Sales, Supports

Post-Introduction Improvement

PRODUCTLIFE CYCLE

Expected Results

Demonstrable Steps and/ or Benefits

Relevant Stakeholders

Develop a distinct new technology connected to a market need

Establish technology’s practicability, market potential, and plans for development

Embody the technology in production engineered products and/or processes

Get the product or process quickly accepted in the market

Create long-term value by expanding applications of the technology

Technical proof of the ideas, patent, develop vision for the technology

Patent if relevant or not done; ready plans for com-mercialization; prototype, test with key targets

Beta test with key customers, unveil commercial version of the technology

Hit take-off (5% - 20% penetration)

Obtain substantial financial returns and establish the infrastructure for supporting a product family

Research partners, technical experts in the field

Technical experts, potential investors and other funding sources, targets, end users, opinion leaders in key entry niches

End-users, lead customers, sup-pliers of platform or complementary technologies and products, targets, opinion leaders

Targets, end-users, customers, opinion leaders, others in value network

Company management, others in value network, customers, opinion leaders, R&D partners

Pre-Phase I Phase I Phase II Phase III (and new Pre-Phase I)

Phase III (and new Phase I)

SBIR PHASE

Expanding upon V. Jolly, Commercializing New Technologies, Harvard Business School Press, 1997


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0

2

4

6

8

10

12

1 2 4 6 8

Year

Hit

s

Basic Research

Applied Research

Engineering Development


Production and Sales

0

1

2

3

4

5

6

7

8

9

1 2 4 6 8

Year

Hit

s

Basic Research

Applied Research




0

2

4

6

8

10

12

1 2 4 6 8

Year

Hit

s

Basic Research

Applied Research





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Con

text

Cap

acit

y

Domain CapacityAll

Necessary Capacity

Control

Partner

Divest or Monitor

Insignificant Sales and Sales Force

Weak Technology In-House Expertise

Mar

ket F

amil

iari

ty a

nd T

rack

Rec

ord

Technology Familiarity and Track Record

StrongGoodwill andBrand Loyalty

Strong R&D Teamand IP Portofolio


46


47

End User Advice

End User Testing

Target Advice

TargetTesting

Adapted from R. Megantz, How to License Technology,Wiley, 1996

Idea – Design – Proof – Brass – Prototype – Product – Production – Sales – Distribution – Customer of of Board Engineering Marketing Support Concept Feasibility


48

Process Schedule (in days)

0

0

124

10

367

457

640

852

0

1005

540

257

138

120

90

444

95

148

750

730

12/0

0

12/0

1

12/0

2

12/0

3

12/0

4

12/0

5

Research

Financing

Design Policy and Management

Functional Implementation and Engineering

Test Management

Manufacturing Planning & Control

Process and Equipment

Logistics and Disposal

Management

Distribution and Customer Services


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• The substantive process drives the cost calculation

• The cost calculation, together with the revenue projections, drives the net value

Net Operating Income/Loss and Cummulated Cashflows with Breakeven

-50000000

0

50000000

100000000

150000000

200000000

250000000

300000000

350000000

400000000

3652

5

3725

6

3798

6

3871

7

3944

7

4017

8

4090

8

4163

9

4236

9

4310

0

4383

0

4456

1

Net Operating Income/(Losses)

Net Difference of Cummulated Cashflows

Process Contribution to Total Project Cost(excl. Investments)

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Res

earc

h

Fin

anci

ng

Des

ign

Imp

l & E

ng

Tes

t M

gt

Mfg

Pl &

Ctr

l

Prc

& E

qu

ip

Lo

g &

Dis

p

Man

agem

ent

Dis

t &

Srv

c

Co

st in

% o

f T

ota

l


50

What Needs to be Done for JIT Delivery


51

• Technical and firm specific risk is the basis for the discount rate

• Market risk is a probability distribution for outcomes

Cost vs. Delays for all Risks along Value Chain

0%

5%

10%

15%

20%

25%

30%

0% 5% 10% 15% 20%

Resulting DelaysR

esu

ltin

g C

ost

In

crea

ses


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J - Curve

I d ea Bas icR es ear c h

Ap p liedR es ear c h

P r o d u c tD ev elo p m en t

M ar k etI n tr o d u c tio n

P r o c es sE n g in eer in g

0 $

CU

MU

LA

TIV

E R

EV

EN

UE

S

T I M E


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Corporate

AAI Applied Design Corporation Agilient Air Products and Chemicals Allied Signal American Research Corporation of Virginia Arthur Anderson and Co. Boeing Management Company BRTRC, Inc. Charm Sciences Chemica Technologies, Inc. Chemonics Conductus Concurrent Technologies Corp Continuum Dynamics Consultec Corning Crossbow Ventures Coyote Found Candles Dow Chemical Environmental Toxicology Lab Fayette Environmental Foster Miller General Dynamics Advanced Information Systems General Dynamics Defense Systems Goodrich Aerospace Hartford Steam Boiler Inspection and Insurance Company Hoechst Celanese IBM I Am Fine ICET, Inc. Illinois Superconductor InteCap Inc. Infectec Infolink Intelligent Medical Imaging InVision Technologies Les Echos (France) Laser Focus World Litton System Inc. Lockheed Martin Missiles & Fire Control LMITCO Microstrain, Inc. NanoProducts Corporation Nanoworks Newport Corporation Northwest Research Associates Northrop Grumman Newport News The Owen Group, Inc. Phelps Dodge Photonic Systems

Pratt & Whitney PraxAir ProMet Technologies, Inc. UTD Incorporated Procter & Gamble Phoenix Science & Technology Quantum Magnetics Red Raven Science Applications International Corp. Sensor Research & Develop Corp. Sionex Corporation Space Works, Inc. Technology Systems, Inc. Telstar Int'l., Ltd. Theorex Incorporated Unisphere, Inc. United Technologies Optical Division

University, Non-Profit, Foundation,

and AssociationArizona State UniversityAtlanta University CenterBeth Israel Deaconess Medical CenterBoston UniversityCase Western Reserve University Central Florida Innovation Corp.Children’s Hospital of BostonConsortium of Social Science Societies Florida Atlantic UniversityGeorgia Institute of Technology (Georgia Tech)Harvard Medical SchoolIndiana UniversityInternational Society for Optical Engineering Iowa State UniversityHenry M. Jackson FoundationNational Coalition for Science & TechnologyNational Collegiate Inventors and InnovatorsAssociationMCNC-RDISan Diego State University FoundationResearch Foundation of the State University of New York Society for American ArchaeologySouthern Illinois UniversityStevens Institute of Technology Teacher PathfinderTufts University of California at IrvineU Mass STEP ProgramUniversity of HawaiiUniversity of Tennessee Research CorporationVanderbilt University

Government

Agency for International Development Amherst, New York EDABen Franklin Technology Partnership (Pennsylvania) CEA Valorisation S.A. (France)Center for Innovative Technology (Virginia) Department of Agriculture SBIR Program Department of Commerce-National Oceanographic and Atmospheric Administration-Technology Administration-National Institute for Standards and TechnologyDepartment of Defense-Army Research Laboratory-Communications and Electronics Command-Medical Research & Material Command-Naval Acquisition Reform Office-Naval Aerospace Medical Research Laboratory-NAVAIR SBIR Program-Naval Air Warfare Center -Naval Dental Research Institute -Naval Medical R&D Command-Naval Undersea Medical Research Laboratory-Naval Surface Warfare Center-Naval Underwater Weapons Center-Office of Naval Research-ONR SBIR Program-Office of Small and Disadvantaged BusinessDepartment of Education SBIR Program Department of Energy-Idaho National Engineering Laboratory -Lawrence Berkeley National Laboratory-Oak Ridge National Laboratory-Savannah River National Laboratory -SBIR ProgramHHS Center for Disease ControlDepartment of the Interior-Geological Survey-Bureau of ReclamationEPA -Office of Cooperative Environmental Management -SBIR ProgramLicentia (Finland)National Research Council (Canada) National Science Foundation SBIR ProgramNew York State Science and Technology FoundationMaryland Department of Community and Economic DevelopmentMaryland Technology Development Corp.Ministry of Defense (Canada)National Research Council (Canada)Ohio Edison BioTechnology Center Patuxent Partnership (Maryland)Small Business Administration Office of Advocacy

Subset of customers. Not included are customers serviced through our franchises in Canada and Chile or our alliance partner in Finland


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• Nothing happens without a sale.David Speser

• If opportunity doesn’t knock, build a door.Milton Berle

• A well-defined imagination is the source of great deeds. Chinese Fortune Cookie

Phyllis Speser Foresight Science & Technology 401.273.4844, ext. 35 [email protected].

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Transcript of Phyllis Speser Foresight Science & Technology 401.273.4844, ext. 35 [email protected].