Only a small number of companies systematically search for opportunities to apply their technology outside their core markets. As a result, many miss out on potential profits and avenues for growth and renewal.
Your company may be sitting on a hidden treasure. The technologies underlying your core business could have lucrative applications beyond the ones that you provide to your current customers. However, if your company is like others we have studied, you aren’t pursuing those opportunities, or you’re doing it half-heartedly at best.
In recent years, we have researched or provided consulting to several dozen organizations in the United States and Europe. In doing so, we have frequently identified untapped opportunities where fungible technologies might deliver significant benefits to customers in diverse industries.
Companies are often successful at applying technologies to new products for the customers they already serve. But they frequently stumble when they try to leverage their technologies in new markets. Determining how to go about applying one’s technologies to different markets isn’t obvious. The goal of this article is to help managers find and address applications outside of the businesses for which a technology was originally developed. We call this process “technology leveraging” — applying technological competence to customers the company does not yet serve.1
Consider Kuka AG, a producer of industrial robots headquartered in Augsburg, Germany. At the end of the 1990s, the company began looking for opportunities to apply its robotics technologies outside of manufacturing. The search led to the establishment of a new division aimed at the entertainment and simulation sectors. In 2010, the company’s robots became the core element of Universal Studios Florida’s Harry Potter and the Forbidden Journey ride. During the ride, the robotic arms dive, turn, and pivot in synchrony with projected images, giving participants the illusion of extreme movement. The new business provided Kuka, recently purchased by Midea Group Co. Ltd. of Guangdong, China, with a new source of revenue and profits.2
In our experience, only a small number of companies make a deliberate effort to tap the potential for business outside their core markets. As a result, most companies miss out on potential profits and avenues for growth and renewal. Society also loses because it doesn’t get to reap the benefits of technological progress. Through our research and practical expertise, we have developed a process to help companies better leverage technology. It relies on four steps:
- Characterize the technology.
- Identify potential applications.
- Select from among the identified applications.
- Choose the best entry mode.