Whether you take a proactive approach or not, intellectual property is a big part of your corporate strategy. Your choice to take a proactive approach can help you drive revenue and growth—or you can spend your time following your competitors and fighting off litigation. In other words, you can create a sustainable competitive advantage, or you can find contentment being second best (at the very best) while giving up your market share.
The benefits of adopting a proactive approach are numerous. The most obvious, of course, is the avoidance of costly litigation, which drains more than a bank account. The resulting PR nightmare continues the toll on your business. Even while avoiding court cases, your business could still make bad decisions based on little more than opinions or educated guesses. Just as you’d never do a high dive into unexplored water, you shouldn’t dive into corporate strategy without some kind of guide.
You don’t want “avoiding bad things” to be your only reason for choosing IP and technology analysis. By tracking developments in the patent landscape, you open up new ways to grow your business and your bottom line. Here are some compelling reasons to leverage IP intelligence to drive your corporate strategy:
Capture Market Share
Performance, features, and branding all help companies distance themselves from competitors. Without looking first to the patents currently filed, businesses run the risk of either following the leader or wading into risky waters.
How can you set your products apart from those already offered? Innovation is key to capturing market share—providing solutions that no other company can offer. Creating without first determining the available white space within your industry is possible, but it’s rather like lightning striking the same spot a hundred times. You must first be aware of the innovation in progress, as well as the needs and wants of your customers, understanding, of course, that your customers don’t always know what they need and want until it has been offered.
Consider for a moment the Gillette brand, whose share of the razor blade market tumbled from 71% to 59% since Dollar Shave Club reared its head. More than 100 years ago, Gillette disrupted barber shop business with the patent of the safety razor. Suddenly, men could shave at home. They held that sway over the market for decades, until they found themselves disrupted.
With little more than lower prices and a home delivery system, Dollar Shave Club spelled trouble for Gillette. Yes, Gillette took a reactionary approach to the threat and sued for patent infringement—something that might have been avoided with a proactive stance. Especially since Dollar Shave Club fired right back with their own lawsuit claiming no patents were infringed upon.
Manage the Prices
While profits are a big part of doing business, consumers are always looking for more affordable options. Dollar Shave Club leapt on this opportunity, finding room in the market for home delivery razors at an affordable price. When businesses hit that sweet spot with their products—the ability to provide exactly what the buyer needs at an affordable price—and then throw a little extra sweetness into the pot, in the form of convenient home delivery, then competitors have to scramble to keep up. In the meantime, the disruptive business can keep those prices low and still make profits. They also have the added benefit of developing a brand that’s hard to beat.
Conversely, building a brand that buyers love gives companies the opportunity raise prices. Before the disruption Dollar Shave Club brought to the market, Gillette enjoyed the ability to charge more for razors after proving superior to other brands through innovation and performance. Their closely guarded patents kept them on top of the game for decades. As long as innovation doesn’t disrupt their game, companies can continue commanding higher prices for the features available with their products.
Create or Buy
With a strategy in place for IP analysis, companies can attack corporate growth through various avenues. We can again return to the razor industry to investigate. Dollar Shave Club, while not at all revolutionizing the mail-order or subscription business, did revolutionize razor purchasing by creating an ecommerce model that saved customers money, eliminated purchasing friction, and introduced convenience.
Gillette liked the idea so much, they introduced their own subscription service—the Gillette Shave Club. We see a shadow of Blockbuster looming here, don’t we? In answer to the threat, Gillette chose to copy rather than to innovate.
Unilever, however, chose to buy. They saw the opportunity to finally snap up some of that market share that Gillette had long controlled. The purchase of Dollar Shave Club for $1 billion helped them redefine their role in the razor blade market, setting them on a new path toward corporate growth. Create a new niche, like Dollar Shave Club; buy current innovations, like Unilever. Or, without an IP intelligence strategy driving your corporate growth, copy the competitor, like Gillette or Blockbuster.
Ready to start growing your bottom line by developing an IP intelligence strategy? We can help you get on the right path.