overview• context• approach• kinds of competitive advantage• examples
context• business is competitive• a team, contact sport like rugby• what does „winning‟ mean to you? – get your idea/product out there? – social benefits? – lifestyle business, to pay the bills? – fast growth of sales and profit? – a big exit?
level 1 – broadcompetence• do (almost) everything well• actually, basic competence in all areas is often enough!• a „me too‟ business can achieve a level of success if it consistently deliver good quality product/service, on time, in the right market
level 2 –competitiveadvantage• different + better• what could you do or offer that is different to and better than your competitors?• if this is not protectable / sustainable then others will quickly copy
level 3 –sustainablecompetitiveadvantage• you keep your advantage• because the competition is not able, is not allowed, or does not want to copy it• or you keep getting better at it, changing it or finding a new one!
where is the edge?kinds of competitive advantageintellectual property protection other strategic elementsformal intellectual property rights know how / unique skills of team complexity / difficulty of product / service• patents sticky products• trademarks brand / reputation / trust• copyright team expertise pricing• design rights control of routes to market domination of target market segment (not worth competitorother protection trying to take it from you) quality• copying is not illegal! design / user experience / object of desire• confidentiality agreements „the whole product‟• employment/consultancy contracts – first to market and other legal agreements hard work passion• secrecy location• copy protection technology – e.g. funding encryption, DRM (Digital Rights size Management) continual development / improvement innovation!
other approaches to IP protection• if not legally protected by IPR, copying is not illegal!• so what else can you do?• confidentiality agreements – and other legal agreements• employment contracts – confidentiality, IP ownership, non-compete clauses – also consultancy & supplier contracts• secrecy SSSHHHH!• copy protection technology – e.g. encryption, DRM (Digital Rights Management)
competitive advantage – sticky products brand / reputation / trust choice of market segment / focus business areas know how (tech, market) unique skills control of routes to market domination of target market segment connections hard work passion team market culture quality complexity / difficulty of productdesign / user experience / object of desire product or „the whole product‟ range of complementary products service first to market cost structure funding strategy funding location but which are pricing size sustainable?
startup & early stage – where‟sthe edge?1. flexibility and speed2. low costs3. entrepreneur’s / founder’s • skills, technical knowledge • market knowledge, experience, connections, reputation • vision, passion, commitment, determination, hard work! • look at yourself!4. ability to innovate
case study 1 - Renishaw• Sir David McMurtry and John Deere – Rolls Royce• invention at RR of touch probe to measure Concorde engine parts• RR supported them to get patents and start own company• fought US infringement battle (cost $1M+)• focus on innovative precision metrology, supported by IPR (36 UK patents)• “success comes from patented and innovative products and processes, high quality manufacturing, and the ability to provide local customer support in all its markets around the globe”• patent protection allows price premium, leading to profits to fund ongoing R&D and innovation
case study 2 –IPL Information Processing• software projects and consultancy services – not products or applications• 0 patents• focus on large corporate/public clients• and quality of delivery – business & technical – trust & reliability – responsiveness & agility – excellence
case study 3 – Stonecube - IPR• invention: realistic, moving visualisation of objects with printed/decorated surfaces• key inventive step was a way to model the physical printing process to generate a 3D model• UK application went• US patent granted!
case study 3 – Stonecube –strategy storya business opportunity if 3D1. idea that there was graphics in PCs & Macs could be applied to commercial applications2. visualisation of ceramic tiles3. print4. packaging and greetings cards5. selling direct at relatively low price6. „partnering‟ – global sales + complementary products
Stonecube market/strategy evolution external exit!success investment first employees
case study 3 – Stonecube Ltd• how did the patent help?• probably discouraged competitors• encouraged customers, investors, partners, potential acquirers – perception matters• at least doubled valuation for both angel investment and exit• even though we probably could not have fought infringement action (especially in USA)• even acquirer was reluctant to do so• you must be in the game – if you can be
conclusions• think about climbing through levels 1, 2 and 3• whatever your strategy, it must build on broad competence (no business excels at everything)• in a tech business IP is often a key source of sustainable competitive advantage – look for the patenting opportunities – get in the game• but there are many other strategic elements• finding the right mix of elements for an effective competitive strategy is a journey• continuous improvement is essential
image attribution• slide 1: England Rugby Squad 2003 by BombDog CC-BY-2.0, via Wikimedia Commons• slide 5: stack of cards by Fraser Waters CC-AN-2.0 CC-BY-2.0• slide 6: Wood and CFRP tennis rackets overlayed by CORE-Materials CC-AT-2.0• slide 7: Jahangir Khan by Mr Ian CC-AT-2.0