The case company

The case to be discussed in this study is a research-based business venture. The project was initiated in Tampere University of Technology, in the Department of Material Sci-ence. This part will discuss the team and the formation of the idea.

The team behind this innovative idea is composed of members with Material Science and Automation Science and Engineering background. The material science researcher also engages in management of the project. The automation science and engineering researcher is the mind behind the signal processing and electronics side of the project.

The development of the product is hence, their responsibility. Some electronics and pro-ject tasks have been delegated to other people as well. The team has strong connection to industry besides the laboratory, which is how the idea was initiated.

The project was a spin off from another industry project that had started in 2011. Due to the core focus of that project, by the end, the industry partners and the funding institu-tions were no longer interested in further development of the idea. The team however, seeing the potential in further development, applied for a two year funding. Tekes fund-ed this project for 2013-2014. This second project workfund-ed on signals usfund-ed for material and suspension measurement as a more focused study compared to the first project. By the end of that project, three of the collaborating companies in the board of the industry expressed their interest for measurement of colloidal suspensions. The project leader says:

“Initially, when talking with the three partner companies, I saw it in their eyes that they were serious about this project.”

He also mentions that when the project had just started, without any marketing efforts, he was receiving phone calls from potential clients, asking for further information. This was a living proof that the idea was valid and carrying on with the project was a wise step. This project was then initiated and funded by Tekes also. As a result, the project has been narrowed down from a more extensive research that had been going on, to one focused on the industry needs. The project organization is depicted in Figure 29.

Core team Material science

researcher

Automation science and engineering

researcher

Partner companies Consulting firm

Figure 29. Project organization and entities.

The outside consulting firm carried out market research. They validated the idea. They also determined the market attractiveness and the competitive landscape. Through stud-ying the competition, the product concept was also focused on a more lucrative offering, as this project describes further. The consulting firm then assisted the project manager in breaking down the project and setting deadlines. There are three partner companies that had a significant role in the development of this project. As mentioned before, they approached the team to begin with. Interestingly, the customers are from different in-dustries, when viewed from the product perspective. However, it is believed that they all work with the same raw material and through the same processes, which is why they form a valid segment. The client-partner companies are in the following industries:

 Mining

 Sanitary porcelains

 Lime-stone based products

Although on the surface these client companies do not bear similarities, they all work with ceramics. The ceramic components are increasingly used in several applications due to resistance to the following unique characteristics (Salpavaara et al. 2015):

 Wear

 High temperature

 Corrosive environment

In the manufacturing process for all three clients, ceramic particles need to be suspend-ed in liquid. The properties of this suspension determines the properties of the final components. The homogeneity of the suspension and the content level are then im-portant to keep a track of.

The segmentation was not done in the initial phase of this project. This was due to the interest of the partner companies and how they approached the project team. The target clients were already there. However, given that the research team is aiming to establish a company, further segmentation must be carried out for the development of the busi-ness in the market. The segmentation happens afterwards in a build-up approach. Simi-larities in the processes of the customers are found. The companies that use suspensions in their processes, which relates them all to the research area of this team, are all poten-tial future clients. Due to the similarity of the suspensions, they form a strong customer

base. A segmentation method similar to the nested method was used in this study. The different segmentation levels are summarized in Table 9 in two separate levels.

Table 9. Segmentation bases.

Stage Characteristic Goals Behavior

Initial stage Industry membership

Later stages Number of plants Financial capability

In the initial stage the partner companies’ proposition for cooperation were accepted because they were all in the ceramic industry. They are located in Finland, which makes the research and development easier. Their position in the network is the promise of a smooth distribution of the offering. The benefits sought by all the companies is a result of the end use of what they manufacture. The reciprocal behavior of the companies is the reason for the cooperation that is essential to the development of the offering. Their certainty was the validation the project founders needed to develop the idea further.

Once the offering concept is developed, it might be beneficial to aim for market growth.

In the build-up approach to segmentation, customers that share certain attributes with the partner companies are found for further market development. It seems as though the size of the company, besides their financial state is a good starting point for the compa-ny to choose new customers to form partnerships with. The value of the customer to the firm matters because the firm is a new establishment with limited means that must be exploited fully.

The order size is also a crucial point because of the service nature of the offering. The technical assistance needed by the companies, in case the assistance is a revenue stream is also worth consideration. With the offering being developed at a relatively lower cost, the purchase strategy and organization of the customer company matters. It is important for the project founders that the users are able to make the purchase decision. Due to the relationship nature of the service offering, customer loyalty finds significance. With the data-based service offering the loyalty factor is crucial.

This study was done in the development stage of the project. The aim of this project has been to combine the laboratory processes and industry specific measurements with the technological trends, due to the interdisciplinary activities of the core team. The project manager acknowledges that:

“It is the age of big data. However, it has not yet been integrated into this partic-ular industry.”

The team is looking forward to found an enterprise eventually to take advantage of the technological advances of the smart and connected era in the realm they are familiar with. The next section elaborates on the idea further.