Commercialization of Photochromic Dyes and Products
Background
While most people, including this author, hold quite optimistic views of the photochromic industry, very little commercial success has been realized. In Professor Giacomo Ciamician’s famous paper on photochemistry of the future, he predicted that photochromic clothing would be popular. It turns out that he was right. His paper was written in 1912 and photochromic clothing was not commercially successful until the early 1990’s. These optimistic projections are commonplace. Unfortunately, the commercial successes have not been rapid or frequent.
This paper is intended to address some of the critical success factors in achieving photochromic related profitability. The major ingredients of commercial success are an attractive industry and mastery of the specific critical business elements that lead to profitability in that industry.
Industry Model
A well accepted industry model was developed by Professor Michael E. Porter of the Harvard Business School and is presented in his book Competitive Strategy as shown below. The general analysis of this model will be left to anyone who cares to read his excellent work. The specifics of this model as they apply to a dye producer in the photochromic industry will be described.
The most attractive industry would have large barriers to entry, low bargaining power of buyers, no threat of substitutes, low bargaining power of suppliers, and little rivalry among existing firms. Such an industry should lead to extremely high rates of return.
Industry Competitors
Industry competition between the existing dye suppliers would be classified as relatively polite for the following reasons.
1. few, diverse suppliers – litt...
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...ng this market, six key capabilities need to be mastered.
Research and Development
1. dye synthesis
2. dye stabilization (in a matrix)
3. dye application (in new matrices)
Sales and Marketing
1. market identification
2. create market awareness
3. establish product distribution
By performing a self assessment, any areas of weaknesses will identified. This then highlights the required expertise that needs to be established, either developed in-house or through some outside business arrangement. If each of these critical areas is well represented, the chances of commercial success are dramatically improved.
1 Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: The Free Press, 1980.
2 Ibid.
PhilipKottler, Marketing Management, analysis, planning, and control. New Jersey, Prentice-Hall, Inc., 1984