Michael Fruhling's Blog

A bunch of stuff about innovation…

Creating Bigger Business “Pies”

Posted by mdf4u on January 2, 2010

Each year, companies invest millions of dollars to develop and introduce new products to market.    What if these companies could generate an even larger return on their product development investments through strategic relationship creation…without jeopardizing their existing businesses?  

Some new product launches are very successful.   Some of these can be even more successful if they were able to access geographies and/or trade channels that their existing distribution reach cannot currently allow.  Repositioned and/or repackaged versions of these products could be very attractive to prospective partners with strong positions in non-competing, alternate trade channels and/or geographies.   A strategic relationship between these companies could create a significantly larger pie for both to share.  

Let’s consider a couple of realistic scenarios (one of which involves a current client):

Company A is a European skincare company whose new product successfully launched earlier this year.   The Company has determined that it could be even more successful if it could build greater consumer awareness and generate higher trial rates.  However, it is currently constrained by non-optimal retail shelf position and its inability to invest sufficient funds at the shelf and in media in order to enhance consumer awareness.  Company B is an international direct marketing company with a lucrative U.S. business.  They are expert at creating long-form informercials and have a history of success with a combination of direct marketing and mall-based retail kiosks.  Could a match between these two companies make good business sense?   Very possibly… 

Company C  is a small U.S. business that makes and sells innovative and clinically proven oral care products directly to dental professionals for use in their practices and for resale to consumers.    Company D is an established retail oral care brand that sells consumer products.   Company D wishes to expand its new product portfolio and bolster its innovation capability.  Could Company C  license to Company D some of its proprietary technologies and capitalize on the latter’s strong consumer brand recognition and distribution strengths?   This could enable Company C to realize a greater return on its IP investment, and accelerate Company D’s new product development efforts.    

An innovation catalyst (like bfs innovations) can help companies to vision attractive, highly incremental, and possibly unobvious opportunities like these, and others.   They can also facilitate the connections necessary to advance these opportunities.  Something to consider…

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