Kuka is a German-based manufacturer of industrial robots. In the late 1990s, the company began to consider extending robotics beyond manufacturing, creating a new division that specializes in entertainment and simulation. In 2010, the company’s robots became a core component of the “Harry Potter Taboo Tour” entertainment facility at Universal Studios Florida. Thanks to the synchronized dive, flip and twist of the robot arm and the projected image, visitors can enjoy an unparalleled ultimate dynamic experience during the ride. This new business provides new sources of revenue for KUKA, which was recently acquired by China Midea Group.
Experience tells us that only a very small number of companies will consciously tap potential resources outside their core markets, while most companies miss out on potential profits and the possibility of enterprise development and rebirth, so society can not enjoy technological progress. dividend. Through research and practice, we have concluded a set of processes that will help companies to reuse technology. It is divided into the following four steps:
1. Determine technical characteristics.
2. Identify potential application areas.
3. Choose among the viable application areas.
4. Choose the best mode to enter the market.
1. Determine technical characteristics
The first step in technology reuse is to describe the core technical capabilities to “unhook” the technology (such as a robotic arm that can move in all directions) from current product applications. To do this, companies need to identify the capabilities that the technology is responsible for. This attempt allows managers to explore the substitutability of technology and begin to consider new application areas. An accurate and descriptive description of the technical features helps to expand the possibilities and allows managers to clearly understand the strengths and limitations of the technology. The description process should begin with an understanding of the core functions of the technology to be utilized.
US Service Network Inc. (SNI) is a machine tool manufacturer. The company has developed a technology that can secure the top of a CNC grinding machine with interlocking gears. In addition to being able to place the grinding wheel along the X and Y axes on a horizontal plane, the technology also supports angular movement. When looking for applications other than machine tools for this technology, companies must be clear about what their core functions are. The SNI manager finally concluded that the biggest advantage of this technology is its spatial positioning capability. With this in mind, SNI has determined how the technology works in multiple dimensions including force, accuracy, speed, range, and energy consumption.
Based on the above-mentioned series of features, the company began to study alternative technologies that can provide similar functions, and compare their own technologies and alternative technologies one by one in a list form to find out the advantages and disadvantages of the two to determine whether their technology is competitive. Advantage. In many cases, the implementation of this step requires a lot of testing and R&D investment. Indeed, if you don’t know the advantages of your technology compared to your competitors, you can’t find new applications for it.
For example, the French multinational company Sain tGobain specializes in the production of various building materials and high-end materials for the semiconductor manufacturing industry, hoping to extend its ceramic technology to new markets with weaker cyclical conditions. However, as is the case with SNI, it is not possible to enter new markets unless you fully understand the characteristics of your technology, such as the temperature it can withstand. Before seeking market feedback, you should first describe the core technology advantages.
2. Identify potential application areas
Determine the core functions of the technology, the next step is to do market research. Market research should extend the potential range of technology as much as possible, but at the same time keep in mind the core functions of the technology mentioned in Step 1. Opening up new areas of application requires a range of approaches. Although we recommend starting with the desk study in the office, in fact, through the interaction of industry conferences and trade fairs, you may gain more. The desk study included patent databases, industry literature, industry conference materials, and general web search.
When looking for new uses for existing technologies, it’s a good idea to look at other technologies that have the same core capabilities and see how they are applied. This kind of observation can help you determine which technologies you can compete with or replace. For example, SNI finds that its positioning technology is unique because it allows objects to rotate.
Patent search is a way to find similar inventions. When searching, be sure to ask for functionality. Try a variety of keywords that point to similar features, not just a set of search terms. Different industries can be used to refer to the same function. SAES Getters is an Italian industrial materials company whose products are used in a wide range of industrial and medical applications. In the search for new markets for functional polymers that are capable of absorbing gases, managers use such “absorbers” and “absorbents” as well as “functional” “getters”, “active agents”, “scavengers” and even “inhibitors.” “A series of keywords are searched to try to find similar technologies that are competitive.”
The results show that in addition to the familiar direct competitors, there are some patent owners in the chemical, packaging and printing industries that are not known to them, except that they use different terminology. For example, they typically use terms such as “filler”, “scavenger” and “desiccant” rather than “getters” because “getters” were originally a material technology that served the display market. Based on the above perception, the manager began to modify the search scope. The company’s terminology is also more appropriate when communicating with potential customers about technical issues.
In order to open up possible application areas, you may wish to start with industry publications and extensive industry research. Which technologies have been adopted to implement the core functions mentioned in step 1? What are the shortcomings of existing solutions that have become a pain point for customers? Remember, this is just a preliminary survey, in order to be more active afterwards.
Participating in trade fairs is a great way. It allows you to get first-hand information on the potential application areas of related technologies, as well as to understand the pain points of existing technologies from other populations. Industry-specific trade fairs give companies access to valuable information and prepare for further detailed analysis.
One of our research objects, Mario Cotta Zincometal of Italy, did just that. As a leading manufacturer of pneumatic tool holders, round inserts and slitting systems, the company has developed a new cutting machine for the production of paper towels. The cutter bypasses some stages of the traditional production process, reducing lead times and production costs. At the same time, the company’s management felt that the technology might be useful in other areas of paper towels, although they were not sure what the specific use was. Due to their eagerness to find new markets, they decided to participate in the four-year international exhibition in Drupa, Düsseldorf.
In 2012, the company’s employees participated in the initiative by taking the initiative (using the booth to showcase their proprietary technology) and passively (three employees patrolling the exhibition to find opportunities). Hard work pays off, they finally found the potential application of industrial felt. To better understand the future of the field, company managers participated in a more professional flexo trade fair called Converflex and established contacts with potential customers. In a nutshell, Drupa expands the market for the company’s cutting machines, and Converflex offers the company a specific solution.
In addition to trade fairs, it is an effective way to seek the opinions of experts inside and outside the company. For example, in order to brainstorm, Saint-Gobain has convened several top scientists and engineers in various fields and fields to discuss how to use its ceramic technology. Some companies will also tap the valuable resources of university researchers and professors, and the results are significant, because many scholars do not focus on specific markets, but have extensive social connections. If the subject area of the communication object is completely different from oneself, it does not overlap, or it can stimulate new ideas that are even more wonderful.
Another channel is the power of many problem solvers to get advice on new applications. Studies have shown that many potential problem solvers are motivated by competitions that are driven by open innovation and crowdsourcing platforms such as InnoCentive or IdeaConnection. The US private biotechnology company Fiberstar found that the competition can open up new application areas for technology. So far, Fiberstar’s most successful “invention” is the natural citrus fiber extracted from citrus pulp, which is a by-product of the orange juice production process. Most of the application areas for citrus fibre are developed by students who participate in the global competition organized by the company. For example, students at Oregon State University have demonstrated the feasibility of using citrus fibre to reduce the oil content of fried seafood and other fried foods.
3. Choose in a viable application area
Once companies “decouple” their technology from the original product application, it means that these technologies are “linked” to new markets. Therefore, the next step is to choose the most promising application areas. This may sound simple, but the actual operation is complicated and involves many considerations and attempts.
First, you need to understand the conditions for investing in new applications and ensure that the technology meets the requirements. In most cases, the technology needs to be adjusted, which often takes time and money. Experience tells us that simulation testing is helpful, but it can’t stop there because they often underestimate the problems that technology has in practical applications. Building early prototypes may be the only way to expose such problems, and they can more effectively present the value of technology to future consumers.
A US company specializing in the production of components for the control of the automotive sector (such as engine valves), it is a simulation test of the medical scene when it seeks new applications for technology, with a view to sealing the blood bag and the catheter. Market. As everyone knows, the role of sealant in the automotive field is significantly different from its application in the biomedical field, but the simulation test does not take this into account.
In the automotive sector, the sealant must be rigid because the components it is connected to will not change during operation. In the biomedical field, the sealant must be elastic because it needs to accommodate changes in the shape of the part. This difference can only be seen when the company begins to make prototypes. When considering new applications and entering new markets, company managers must carefully study the technologies being used in new markets and fully understand the pros and cons of these technologies. In what ways is your technology superior to the technology currently in use? In what ways is it slightly inferior? Can you come up with a value proposition to make products that use your technology more competitive, such as increasing value or reducing costs?
When you push technology to new markets, you should provide it with a better place to use it and demonstrate its superiority. There is no doubt that the superiority of technology can be expressed in many ways, such as achieving better performance in the existing performance dimension, introducing new performance dimensions, or achieving desired results at a lower cost. The previously mentioned machine tool manufacturer SNI found that its products are not only cost-competitive, but also because of its design characteristics, the user’s operating costs are not high. An Italian company we have worked with provides a protective packaging solution for businesses and consumers. It sets three major standards to guide new applications of proprietary technology:
(1) Feasibility, that is, the extent to which your technology can be self-adjusted to meet the requirements of new markets.
(2) Market attractiveness, that is, potential economic value.
(3) Innovation, to what extent your technology is innovative compared to the technology being used in the target area. Managers may wish to use the above three criteria to use a weighted scoring method to rank potential application areas. Sometimes, focus technology must pass certification and regulation, which increases the difficulty of expanding beyond the field. For example, a US company we know has explored how to use advanced metal composites to produce heart pumps. However, after learning that the application is difficult to obtain certification and approval from the medical authorities, it has to consider giving up.
4. Choose the best mode to enter the market
The fourth and final step in technology reuse is to decide how to maximize the commercialization of products that use the technology. When bringing a technology to market, companies need to decide whether to develop their own products or to work with third parties. This decision has important implications for funding needs, time to market, level of control, and level of investment. However, there is no universal rule that applies to all situations. When assessing the best model for entering the market, managers must first understand the company’s existing resources and capabilities.
If you are entering a new market that has not yet been developed, you need to know if the company has enough resources to serve it. If not, the company needs to develop a new set of market-related resources, or try to access these resources, including new distribution channels and how to respond to customer needs with confidence. Experience tells us that it is not easy to develop a new set of market-related resources, such as customer relationships in new industries. In fact, many companies that have the ability to develop technology do not have the technology and resources to commercialize their products, and they cannot succeed in new markets. Therefore, some companies need to find application development partners who have the necessary resources, whether they have production technology, distribution capabilities or brand equity.
SAES Getters believes that the best way to apply its industrial materials technology to the food packaging industry is to collaborate with a small Italian company called Metalvuoto. The company mainly produces plastic film for food preservation and was eventually acquired by SAES Getters. Another option to enter the market is to license core technologies (rather than already developed applications) to another organization. While this may involve selling a patent or transferring the entire business unit responsible for new technology, it still requires a transfer license agreement with other manufacturers to commercialize the company’s technology. Transfer authorization can effectively help convert patented technology into a more versatile technology platform.
In most cases, determining the value of a technology is a daunting challenge because it is easy to underestimate the value of the technology, resulting in lower royalties. This is the case for a manufacturer of shock-proof systems for heavy-duty trucks and industrial vehicles. When the company licensed technology to light trucks, the patent royalties earned by managers were significantly lower than the value created by the technology because managers were unfamiliar with the new market. Indeed, the transferee’s knowledge of the specific application of a technology is more known than the transferor, which often puts the transferor at a disadvantage.
The technology used in the core business areas of the enterprise can find new uses, even though the company itself may not be aware of this. However, unless managers take practical action to open up new markets, they can only lose money to make money. Of course, tapping new business opportunities is not easy.
Finding a new market is a skill in itself, which is very different from serving existing customers. In many cases, a firm belief is essential. Because it is difficult to judge whether technology reuse is really worthwhile beforehand, many companies are reluctant to invest resources in the exploration stage of “crossing the river by feeling the stones”. Opening up new application areas will always compete with existing mainstream businesses for resources. Experience tells us that companies that have been successful in this area will invest in multi-year budgets for technology reuse and incorporate them into corporate strategy.
For companies, not fully exploiting the potential of technology may mean missing opportunities for development and losing opportunities to make money. For society, the lack of full potential of technology may mean a lack of job opportunities and a reduction in developable products. Opening up new uses for technology outside of the core business is a treasure worthy of our search and exploration.
The author Erwin Danneels is an associate professor of strategy at the Muma School of Business at the University of South Florida; Federico Frattini is the School of Management at the Polytechnic University of Milan (School of Management, Politecnico di Milano) Professor of Strategic Management and Innovation.
4 steps for companies to reuse technology
Determining technical characteristics
The first step in technology reuse is to describe the core technical capabilities to “unhook” the technology (such as a robotic arm that can move in all directions) from current product applications. To do this, companies need to identify the capabilities that the technology is responsible for. This attempt allows managers to explore the substitutability of technology and begin to consider new application areas.
Expand application areas
Determine the core functions of the technology, the next step is to do market research. Market research should extend the potential range of technology as much as possible, but at the same time keep in mind the core functions of the technology mentioned in Step 1. Opening up new areas of application requires a range of approaches.
Choose a foreground area
Once companies “decouple” their technology from the original product application, it means that these technologies are “linked” to new markets. Therefore, the next step is to choose the most promising application areas. This may sound simple, but the actual operation is complicated and involves many considerations and attempts.
Choose the best mode
The fourth and final step in technology reuse is to decide how to maximize the commercialization of products that use the technology. There is no universal rule that applies to all situations. When assessing the best model for entering the market, managers must first understand the company’s existing resources and capabilities.
