opportunity discovery process

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Overview ofSBI’s Opportunity Discovery Process (ODP)

Prepared by:Dr. Chulho ParkVice President

Strategic Business [email protected]

October 2015

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Opportunity Discovery Process for Value Creation

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Opportunity Discovery—Incubation EngineOpportunity

Profile

Trends, SWOT

Idea

Resurrection

New Challenge

Refinement

Concept

Refinement

New Challenge

OpportunityDiscovery

EngineInternal and External Sources

R&BD

R&BD

“Failure” Mode

Customer Value

Creation

Customer Value

Creation

Validation

Validation

Concept

Opportunity DiscoveryWorkshop

OpportunityValue

Proposition

OpportunityRoadmap

OpportunityWorkbook

OpportunityWorkbook

OpportunityDiscovery Workshop

OpportunityValue

Proposition

OpportunityProfile

OpportunityRoadmap

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Key Success Factors for an Opportunity

Address important customer’s (unmet or new) needs

Create significant financial value or benefit

Develop unique, compelling technical approach

Create competitive advantage

Fit to the company strategy

“Important” Opportunity

Product/ServiceNeeds

CustomerNeeds

TechnologyNeeds

Research & DevelopmentNeeds

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Opportunity Discovery—The Front End of Innovation in the New R&BD Paradigm

Infrastructure: Organization, Resource, Processes

Analysis of External Drivers and Dynamics

CommercializationManagement

IP AssetManagement

Technology (R&D)Management

CompanyBusiness

Visionand

Strategy

Opportunity (Value) Discovery

Value Development (R&D, BD)

Creation of Customer Value and Company

Profit

Infrastructure: Organization, Resource, Processes

Analysis of External Drivers and Dynamics

CommercializationManagement

IP AssetManagement

Technology (R&D)Management

CompanyBusiness

Visionand

Strategy

CompanyBusiness

Visionand

Strategy

Opportunity (Value) Discovery

Value Development (R&D, BD)

Creation of Customer Value and Company

Profit

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Problem Definition and Scope

Development of Opportunity Profiles

Initiation:Preparing Workbook

Idea Generation:Brainstorming Ideas

Opportunity Clustering:Clustering Opportunities

Opportunity Evaluation:Evaluating Clusters

Focus Areas

Opportunity Ideas

Attractive Opportunities

MarketNeeds

TechnicalNeeds

Opportunity Clusters

Industry/Markets

Selection Criteria

SBI’s Process Involves Creative Brainstorming Followed by Careful Clustering and Screening

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Bring together multidisciplinary skills: marketing, R&D, manufacturing, planning

Develop critical mass of necessary knowledge quickly: consumers, markets, technologies, competition

Encourage knowledge sharing and consensus building Create broad view and perspectives of market and technology

landscapes with a specific decision focus Leverage the expertise, experience and genius of others Increase efficiency and productivity for innovative idea generation Break down organizational barriers (silos) Create learning environment through repetitive use of structured

brainstorming.

Why Structured Brainstorming

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Three Types of Brainstorming Workshops

Positive Negative

Multidisciplinary Team

Expert Group

Scenario-Based

Broad view Many diversified ideas Rapid knowledge base

development

In-depth expertise A few high-quality ideas Effective and efficient for

specific cases

Through search Comprehensive view Innovative ideas through

systematic approach

Less productive, and often inefficient

Difficult to maintain the quality of ideas

Narrow view Prone to be biased Hard to access experts

Time consuming and expensive

Often less productive Difficult to execute

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Step 1: Prepare a workbook for Opportunity Discovery workshop

Step 7: Refine the selected opportunities and specify next steps

Step 2: Discuss industry trends and issues, and the company’s business/R&D strategy and capabilities

Step 3: Identify new business and/or research opportunities

Step 4: Segregate the opportunities into clusters

Step 5: Develop evaluation criteria and assess their relative importance

Step 6: Evaluate and select the best refined opportunities using the selection criteria

SBI Conducts the Process via Well-defined Steps

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Step 1: Prepare a Workbook for Opportunity Discovery Workshop Describe opportunity discovery objectives:

– Who needs opportunity ideas, and why (or for what purpose)– What kinds of outcome needed or desired– How to use the outcomes (next steps)

Set specific goals for an opportunity discovery workshop:– Opportunity types: new business, product/service, research, or

application ideas– Time horizon: short-, mid-, and/or long-term– Search domain scope: e.g., display, flat panel display, or LCD– Number of ideas to be created– Consideration of its own core businesses or technologies– Consideration of resources (financial or human resources)– Consideration of risk

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Check List for Characterizing Opportunity Discovery

OpportunityType

Basic Science and Research

Application Development

Product orService

Business orMarket

SearchScope

Existing/Core Areas Only

Growing and Emerging Areas

Totally New Areas Only

NoConstraint

Time Frame (Examples)

Short-term (1 to 2 Years)

Medium-term(3 to 4 Years)

Long-term(Over 5 Years)

NoConstraint

Technical Capability Req.

Low Medium High NoConstraint

Investment Requirement

Low Medium High NoConstraint

Risk Low Medium High NoConstraint

Number of Opportunities

Small(< 5 Ideas)

Average(10 to 20 Ideas)

Large(> 40 Ideas)

NoConstraint

OpportunitySearch Domain Example: Portable Multimedia Devices

(Note) Please make circles where are appropriate.

Illustrative Only

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Step 1: Prepare a Workbook for Opportunity Discovery Workshop

Form a workshop preparation team (typically, a team leader plus 1 to 3 staff members)

Set/refine specific objectives and goals for a opportunity discovery workshop

Set a tentative schedule of the whole opportunity discovery process Determine a workshop process and desirable contents of a workbook Scout experts for workbook production, and assign tasks Scout experts for a opportunity discovery workshop (typically, a

workshop leader, a workshop moderator, a workshop recorder, numerous domain experts in the areas of market, technology, consumer, upstream and downstream industries)

Set a workshop date and place, and a tentative agenda for the workshop Prepare workshop materials such as idea cards, blackboard, beam

projector, notebooks, etc.

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Typical Contents of a Workbook

Objectives of Opportunity Search– New business development– R&D idea search

Technology Analysis:– Technology trends– Emerging technologies– Emerging materials– Technical issues and needs

Market Analysis:– Market trends– Emerging markets– New product development– Change in consumer behavior– Market issues and needs

Competitive Analysis:– Major competitors: strategies and

technical approach– Potential new competitors or entrant

Other External Environmental Analysis:– Government science and technology

strategy and investment policy– Environmental issues– Regulatory and social issues– Issues in IP and standardization

Company’s Business Strategy:– Strategic vision and directions– Business strategy, expansion plan, and

new business development plan– Resource availability

Company’s Technology Strategy:– Technology strategy and R&D portfolio– Core technologies and core

competencies– Resource availability

WORKBOOK TABLE OF CONTENTS TEMPLATE (Illustrative Only)

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Step 2: Discuss External Environments and Company’s Capabilities and Issues Kickoff the brainstorming workshop: introduction of the workshop

participants and agenda Refine and confirm the objective and decision for opportunity

search workshop Review the methodologies and processes of the workshop Present a workbook: industry overview and more Discuss about the guideline for the opportunity search Analyze major external and internal driving forces and trends to

identify new market and technical needs

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Analysis of Driving Forces and Trends Will Help Identify Needs for Innovation

Competitive BusinessEnvironments

Social/EnvironmentalChanges

Disruptive Science& Technologies

External Driving Forces

BusinessOpportunities

Product/ServiceOpportunities

R&DOpportunities

Outcome of Opportunity Discovery Workshop

Business & Technology• Strategy• Capability• Resource

InternalOpportunity Discovery

• Decision-Focus• Goals• Scope

Internal

Brainstorming WorkshopTechnology-Driven

OpportunitiesCustomer-Driven

Opportunities

OptionalInput

Product/ServiceNeeds

CustomerNeeds

TechnologyNeeds

Research & DevelopmentNeeds

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Step 3: Identify New Business/Research Opportunities Think about a new business or research opportunities and write

the idea in a given standard format. The format includes:– Name of an idea provider– Title of the idea– Description of the idea– Need: market, consumer, and/or technical needs– Skills/technologies required for the idea– Additional notes such as investment, related technologies, competition,

experience, synergy, etc.

Present the idea to the workshop participants in order to:– Refine the idea and make a bigger idea – Reduce duplication of the same idea– Inspire other ideas to the participants

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Put your idea on a card:– No idea is a bad idea; be creative; take risks

Get in line to present your ideas Make your point briefly and precisely (without interruptions by

others), so that others may also contribute Post your idea. Give a two sentence description of the idea while

posting it Allow others to express their ideas; no “idea killing” behaviors Think of another idea. Build on other participants’ ideas Leverage the knowledge/genius of others and the workbook Only one person speaking at a time; no “sidebar” conversations

Rules of Brainstorming Workshop

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Identify positive trends and find a way to exploit them. Identify negative trends and come up with a way to counteract them. Look at your current activities, portfolio, and interests for ideas that

might appeal to others. Watch what your competitor is doing and find a way to do it better.

Discovering Opportunity Ideas in Changes

CoreKnowledge

Trend 1 Trend 2

Intersection

KnowledgeVectors

Focus AreasFocus Areas

CoreKnowledge

Trend 1 Trend 2

IntersectionIntersection

KnowledgeVectors

Focus AreasFocus Areas

Sources of Changes• Technological advances• Social and environmental changes• Competitive dynamics• Consumer trends• Business model paradigm shift

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Contributor: _______________

Description______________________________________________________________________________________________________________Need______________________________________________________________________________________________________________Skills/Technologies Required______________________________________________________________________________________________________________Additional Notes (required investment, related technologies, etc.) _____________________________________________________________________________________________________________________________________________________________________

Sample Format of an Idea Card

Product or Service:

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Product or Service: Simple OLED Film Structure

Description:Reduce number of films necessary to produce OLED

NeedLower manufacturing cost and make flexible TFT-OLED easier

Skills/Technologies RequiredMonomer/polymer synthesis, functionalizing polymers, film deposition

Additional Notes (required investment, related technologies, etc.)SDI and SAIT

Contributor: Chulho Park

Example of an Idea Card

Idea Number: 7

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Product: Simple OLED Film Structure

Example of the Title Card of an Idea

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Related Idea Numbers: 3

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Step 4: Segregate the Opportunities into Clusters Review the ideas created Eliminate duplicated or similar ideas Combine ideas that are subsets of other ideas or same kinds of ideas into

a new or existing idea Classify ideas in a few groups that can be:

– Similar technologies required– Similar applications or products– Same markets or industries

Name the clusters Note:

– Some ideas can belong to multiple clusters– Clusters can be used for portfolio selection and balancing

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Step 5: Develop Evaluation Criteria and Assess Their Relative Importance Determine an evaluation method and criteria Determine a scale for each of the criteria

– Complexity of a scaling/measure depends on information/expert availability and experience

– 3 or 5 levels are appropriate in most cases Describe each level of the scale for the criteria

– Describe a level of a scale quantitatively as much as you can– Describe the rest qualitatively

Assess the relative importance/weights of the selection criteria Assess the relative importance of the scales

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Success = SDemand x STechnology x SStrategic-Fit x SCompetition

Basic Principle of Opportunity Evaluation

Demand

CommercialSuccess

Technology Competition

Strategic Fit

Is there a market? Who are the customers Why do they buy (needs)? Market size, growth rate? Price, cost, profitability?

Can we make it? When the technology ready? Technology competitive? Capability, resource? Technical risk?

Does it fit with our strategy? Strategic fit? Management commitment? Cultural fit? Urgency, priority?

Will it be competitive? Competitive advantages? Sustainability? Potential new competitors? Advent of disruptive

technologies?

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Small Medium LargeMarket Potential < $500 million $0.5 – 1 billion > $1 billion/yr at 2007

Low Medium HighTime/Urgency Customers will buy the product

(> 4 years)Customers will buy the product

(2 to 4 years)Customers will buy the product

(< 2 year)

Low Medium HighStrategic Fit Not fit with strategies and no

synergies with current business/ technology

Supports the existing Core businesses and

technology

Global leadership,Leveraging core competency

Low Medium HighCompetitive Position Many pre-existing competitors Significant challenges

to sustain advantagesFew pre-existing competitors,

Sustainable advantages

Low Medium HighBiz DevelopmentCapability Little expertise in the area Some expertise in the area Leading expertise in the area

Low Medium HighTechnology FeasibilityDifficult to make or

buy, high technology project risk

Technology is feasible, medproject risk

ComponentsDevices < $1 billion $1-3 billion > $3 billion/yr at 2007

Easy to build, Low technology project

risk

Alternative Approach: Multi-Attribute WeightingExample of Evaluation Criteria and Their Scales

Attribute

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Criteria Relative Weight

Market Potential 25%

Time/Urgency 25%

Strategic Fit to Company 5%

Competitive Position 15%

Biz Dev. Capability 15%

Technology Feasibility 15% Scale Weight

High 3.0

Above Avg. 2.5

Average 2.0

Below Avg. 1.5

Low 1.0

Example of Evaluation Criteria Weighting and Scale

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Step 6: Evaluate and Select the Best Refined Opportunities Select an evaluation methodology or tool such as Excel

spreadsheet or Analytic Hierarchy Process (AHP), etc. Evaluate the opportunities with respect to the selection criteria Prioritize the opportunities and select a few opportunities for the

further review Check the priority with intuition or group consensus Conduct a sensitivity (what-if) analysis by changing relative

importance of the criteria and/or ratings of the opportunities Select top-priority opportunities Refine the selected opportunities for the next step

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An Example of Multi-Attribute Weighting Method

Evaluation of Opportunity IdeasWeight: 0.30 0.25 0.15 0.15 0.10 0.05 1.00

Strategic Market Competitive Technology Time/ TotalCriteria: Fit Potential Position Capability Availablility Urgency Score

Opportunity IdeasOpportunity Idea - 1 2.5 2.0 2.0 1.5 2.0 1.0 0.6750Opportunity Idea - 2 1.0 3.0 3.0 2.0 3.0 2.0 0.7333Opportunity Idea - 3 1.5 1.0 1.0 3.0 2.0 1.0 0.5167Opportunity Idea - 4 3.0 1.0 1.5 1.0 1.5 3.0 0.6083Opportunity Idea - 5 2.0 3.0 2.0 1.5 1.5 2.0 0.7083Opportunity Idea - 6 3.0 2.0 2.0 2.0 2.5 3.0 0.8000Opportunity Idea - 7 1.5 2.5 1.5 1.0 1.0 1.5 0.5417

Scale Weight

High 3.0

Above Avg. 2.5

Average 2.0

Below Avg. 1.5

Low 1.0

Illustrative Only

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Step 7: Refine the Selected Opportunities and Specify Next Steps

Refine the selected opportunities using SRI’s NABC format:– Consumer/Market/Product/Technical Need– Compelling Business/Technical Approach– Consumer/Company Benefits– Competition

Specify the next step for realizing/implementing the selected opportunities:– Conduct in-depth market research and technology intelligence– Develop executive-summary opportunity profiles (using NABC format) – Develop detailed opportunity profiles for validation, enhancement,

and implementation

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Development of an Opportunity Profile

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Opportunity Value PropositionA simple “NABC” approach can be used for profiling, communication,

validation, and promotion of an opportunity

ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition

Next Steps,Action Plan

Customer needs, market and product needs, or

technical needs

Compelling and unique technical and/or business

approach

Competitive advantages and disadvantages to

technology/market leaders

Current status and issues, and next step or action plan

Customer benefits and company/R&D benefits

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Introduction Brief description of an opportunity Strategic objectives and goals Time and resource constraints

Key Items Addressed in an Opportunity Profile

Needs Customer (new or unmet) needs Product or service needs Technology needs or push/drivers

Competition Competitors with strengths/weaknesses Compelling competitive advantages Technology gaps, sustainability

Next Steps The current status (IP, R&BD stage) Next step to do Resource requirement, or commitment

Approach The current leaders’ approaches Compelling technical/business approach Modus operandi

Benefits Customer benefits Company benefits Synergy, side effects/benefits

1

65

3 4

2

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Creating a Compelling Opportunity Pitch

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Steps in Creating an Opportunity Pitch

Know your audience– What are they trying to accomplish that your idea can

affect?– How do they measure their accomplishment?– Which of those measures would your idea help most to

improve? Package your pitch

– The Hook – what grabs attention– The Core – your content– The Close – request for action or input

The core content is your NABC– …matched against the knowledge of your audience

Practice and improve– Both your message and your delivery– Be natural and sincere– Test yourself: Can your spouse or another significant

person in your life understand what you are saying?

“Elevator Pitch”

A concise summary of your Value Proposition in about 150 to 225 words (omit details!)

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Making the First Draft Opportunity Pitch

Opportunity ProfileDescription _______________CoreN: ______________A: ______________B: ______________C: ______________Next Steps _______________

The first draft of opportunity pitch can be easily made by rearranging and connecting the components of an opportunity profile.

Try to make a compelling story!

Opportunity PitchHook _______________Core ______________ ______________ ____________________________ Close _______________

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Example: Pitch for Disposable Hearing AidsFred Fritz: President Songbird Medical Systems

Audience: Opportunity Pitch to a prospective customer

HOOK: Are you having trouble hearing? CORE: For the first time, disposable hearing aids are available. Today, high-quality hearing aids cost several thousand dollars and have to be fitted by a doctor. Because they cost so much, they have to be made out of hard, durable materials that do not fit comfortably or tightly in the ear.

We offer a disposable hearing aid that costs one dollar a day. It has the best-quality digital sound and, because you throw the units away every month, it is made of a soft material that fits comfortably, securely and invisibly in your ear. You can buy them over the counter in your drug store. CLOSE: Would you like to see one?

Source: SRI International

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Validating and Incubating Opportunities

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Opportunity Incubation Investigate the selected

opportunities Develop opportunity profiles with

compelling opportunity pitch Identify and secure sponsors

and/or collaborators for value creation

Validate the opportunities Evolve the opportunities into

important ones with higher value creation potential and commercial success

Iterate the phases till ready to commit with confidence

Trends, SWOT

IdeaConcept

Resurrection

New Challenge

Refinement

Concept

Refinement

New Challenge

Well-aligned with•Strategic Vision•Customer Needs

•Organization•Incentive, Reward

Internal and External Sources

R&BD

R&BD

“Failure” Mode

Customer Customer ValueValue

CreationCreation


CreationCreation

Validation

Validation

Trends, SWOT

IdeaConcept

Resurrection

New Challenge

Refinement

Concept

Refinement

New Challenge

Well-aligned with•Strategic Vision•Customer Needs

•Organization•Incentive, Reward

Internal and External Sources

R&BD

R&BD

“Failure” Mode


CreationCreation


CreationCreation

Validation

Validation

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Opportunity Validation and Prioritization

Demand

Technology Competition

Who are the customers?Why do they buy (needs)?

Market size and growth rate?How much are they willing to pay?

When will the technology be ready?Is the technology competitive?

What is the technical risk?What is the cost?

What are differentiation factors?What are competitive advantages?Are they sustainable in long-term?

CommercialSuccess

Success = SDemand x STechnology x SCompetition x SStrategic-Fit

Must pass the four tests: Will there be markets? Can we make it? Will we be competitive? Does it fit to our strategy?

Strategic Fit

SustainableLeadership

Does this fit with the company strategy?Is the company capable of executing this?What is the long-term profitability?

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Opportunity Incubation

Customer ValueCreation55

CommercialDevelopment44

Research andDevelopment22

Research OpportunityDiscovery11

CommercializationOpportunity Discovery33
















ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

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CustomerBenefits

DynamicCompetition


ImportantNeeds

UniqueApproach

CustomerBenefits

DynamicCompetition


ImportantNeeds

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CustomerBenefits

DynamicCompetition


ImportantNeeds

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CustomerBenefits

DynamicCompetition


ImportantNeeds

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CustomerBenefits

DynamicCompetition


ImportantNeeds

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CustomerBenefits

DynamicCompetition


ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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ImportantNeeds

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CustomerBenefits

DynamicCompetition


FlexibleStage-Gate Approach

Validating and Incubating Opportunity with Repeated Use of NABC Approach throughout the Whole R&BD Process

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Next Step: Action Plan Develop strategic direction for how to create value of the

selected opportunity Develop strategic roadmap for value creation Identify potential applications, new products or services for

both existing businesses and new business areas Identify key success factors including both technical and non-

technical factors Develop milestones for key internal R&BD activities and

signpost for uncertain key external driving forces

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Technology Strategy Profile Based on Opportunity Profile

To develop an opportunity-driven strategic technology roadmap, a technology (strategy) profile will be developed based on the

opportunity profile as the first of the TRM process

Description Need Approach Benefit Competition Next steps

Technology Options Best Technology Acquisition Strategy Milestones Product/Service

Roadmaps Key Success Factors

Opportunity Profile Technology Profile

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Tech

nolo

gy S

trat

egy

Prof

ileOpportunity Roadmap Concept

Technology Requirements

Products/ Services &Key Success Factors

Products/ Services 1

A B C

Products/ Services 2Products/Services 1

A B C

Key Success Factors1. .…….2. ……..3. ….

Necessary Techs1. .…..2. .…..3. .….

Opportunity Roadmap

Products/Services

Key SuccessFactors

Technology

Now By 2010 By 2013

A B C

A B C

1 2 3 4 ?