Technology diversification and identifying new markets are similar to exploring new territory. Sometimes, you may venture into unknown regions, with the possibility of discovering hidden treasures. Other times, you may find safer paths by exploring places that are already known but under-exploited.
To finish with the map metaphor… just as you can go about it “by guesswork”, or use a paper map or the latest GPS, you have a multitude of means and tools at your disposal to best manage your technology diversification. Let’s try to make sense of it.
UNDERSTANDING TECHNOLOGY DIVERSIFICATION STRATEGY
Technology diversification can be defined as the process by which a company broadens its technology portfolio. It can achieve this by developing new technologies itself or by adapting existing technologies to new uses. Common goals of a technology diversification strategy include, for example, to increase competitiveness, reduce risk or seize new market opportunities.
The benefits of technology diversification are numerous. For example, a technology company that diversifies its portfolio can be more resilient to market changes. It can also tap into new growth opportunities by identifying and entering new markets. According to a McKinsey study, companies that diversify their technology portfolio tend to achieve 15% higher revenue growth than companies that do not adopt this strategy.
However, technology diversification also presents challenges. It requires investing time and resources in R&D, and there is no guarantee these efforts will pay off. In addition, managing a diversified technology portfolio can be complex and requires in-depth technical and commercial expertise.
EXAMPLES OF TECHNOLOGY DIVERSIFICATION
Some of the most famous companies owe much of their success to the identification of key technologies.
Apple and financial services
The company from Cupertino is known for its iconic products such as the iPhone, iPad and MacBook. However, Apple also launched Apple Pay, a mobile payment system that lets users pay for purchases with their iPhone or Apple Watch. This initiative allowed Apple to enter the financial-services market and offer a convenient, secure payment solution.
Amazon and home automation
The e-commerce giant is an excellent example of technology diversification. In addition to its core online-sales business, Amazon has diversified its offerings by launching products such as the Echo smart speakers with the Alexa voice assistant. This diversification allowed it to establish itself in the emerging virtual-assistant market and develop complementary services such as home automation and music streaming.
Tesla stores energy
Tesla is primarily known for its high-end electric cars. However, the company has also diversified its activities by offering energy storage solutions through its Powerwall product. The Powerwall is a home battery that lets you store solar energy and use it later, which encourages the adoption of renewable energy and opens up new opportunities in the residential-energy market.
Samsung in Health
A global leader in consumer electronics, Samsung has also embraced technology diversification. In addition to its TVs, smartphones and home appliances, Samsung has invested in the healthcare sector by launching products such as the Gear smartwatches, which track physical activity and provide health data to users. This diversification allows Samsung to reach a broader audience and capitalize on growing health and wellness trends.
Google invests in Artificial Intelligence
Google, famous for its search engine and online services, has diversified its activities by investing in areas such as artificial intelligence (AI) and virtual reality (VR). For example, Google developed Google Assistant, an advanced AI that responds to voice commands and offers a personalized user experience. In addition, Google launched Google Cardboard, an affordable virtual-reality device that lets users immerse themselves in immersive experiences. These technology-diversification initiatives allow Google to position itself as a key player in the emerging fields of AI and VR.
These examples illustrate how world-renowned companies have successfully diversified by investing in new technology markets, allowing them to stay competitive and keep growing. Technology diversification gives companies the opportunity to explore new opportunities, broaden their portfolio of products and services, and meet changing consumer needs.
CLASSIC METHODOLOGIES FOR IDENTIFYING NEW MARKETS
Identifying new markets through technology diversification is a process that involves researching, analyzing and assessing a number of factors. These factors include emerging technology trends, unmet consumer needs, untapped market opportunities and gaps in current market offerings.
One of the main tools used in this process is technology analysis. This involves understanding existing and emerging technologies, their potential applications and their impact on industries and markets. Methodologies such as SWOT analysis (strengths, weaknesses, opportunities, threats) and PESTEL analysis (political, economic, sociocultural, technological, environmental, legal) can also be used to assess a technology’s potential in a new market.
Let’s take the example of the automotive industry. At the start of the 21st century, automakers identified a technology-diversification opportunity with the advent of electric-vehicle technology. They analyzed the market, identified emerging technology trends and understood the potential of this technology. Today, the electric-vehicle industry is estimated at more than $160 billion and is expected to reach $802.81 billion by 2027.
TOOLS FOR IDENTIFYING NEW MARKETS: TKM PLATFORM AND HUMAN EXPERTISE
In the process of identifying new markets for technology diversification, our solutions may surprise you. Developed by TKM, our intelligence-monitoring and analysis platform (formerly IPMetrix) offers a whole range of features that can help your company diversify its technologies.
Analyzing a technology landscape
Thanks to our modules, it is possible to carry out a detailed analysis of a technology landscape, identifying new technologies, emerging trends and potential competitors. This can help your company identify new opportunities for technology diversification.
Competitive monitoring
By monitoring patents filed by competitors, TKM Platform can provide valuable information about the new technologies competitors are developing. This lets you anticipate your competitors’ moves and adjust your diversification strategy accordingly.
Technology assessment
TKM Platform can help assess the value and viability of new technologies. This is a valuable decision-support aid if you need to invest in developing these technologies or are looking to acquire them through licensing or acquisitions.
Patent risk management
By carrying out a freedom-to-operate analysis (FTO), TKM Platform helps identify potential risks related to patent infringement. This can allow a company to avoid costly legal battles and diversify its technology more safely.
Patent strategy
TKM Platform helps develop an effective patent strategy, by identifying the technologies to patent and the relevant regions in which to file patents. This can protect the company’s investments in technology diversification and increase the value of its patent portfolio.
The future challenges of technology diversification
Going forward, technology diversification will continue to be a key factor in companies’ success and growth. In an era of fast-paced innovation and fierce competition, the ability to adapt and innovate by using existing technologies to enter new markets remains a key strategic advantage.
As information technology and AI continue to evolve, managing technology information and the ability to identify weak signals in an ocean of information will become increasingly important. Tools like TKM Platform can play a crucial role in this effort by helping companies make use of available information to identify technology-diversification opportunities.
Technology diversification is more than just a business strategy. It is a necessity for surviving and thriving in today’s business landscape. As we move toward an increasingly technology-driven future, companies will need to keep adopting, adapting and innovating with diversified technologies in order to identify and conquer new markets.