Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Strategic Alliances for Small Business Unit Growth

Having discussed LPT’s past, present, and future as an example of a small business unit (SBU) built on IP assets in combination with strategic alliances, what lessons can be learned to help grow your SBU utilizing strategic alliances?

As preparation for developing a plan to utilize technology alliances as SBU growth vehicles, consider the alternative approaches to the role technology licensing plays in the overall growth of a firm. Although there is a range of possible technology licensing strategies that are available to a full scope entity with its own manufacturing facilities, two basic approaches are:

1. Tactical licensing: Licensing that is undertaken without impacting the firm’s manufacturing function. In this approach, the licensing group usually has little say in the R&D direction and very little ability to self-fund initiatives, and the technology licensed is usually not the core basis for its manufacturing units.

2. Strategic licensing: Licensing approach that creates an SBU that behaves as a proactive business unit. The licensing group is involved in the technology decisions of the corporation and even funds some of its own R&D. It has a profit and loss, and is judged on income rather than licensing revenues alone.^[7]

   ^[7] Hastbacka, Mildred A. “Technology Licensing: A Strategy for Creating Value,” A.D. Little, 1997.

The flexibility inherent in the strategic licensing approach to utilizing technology in a variety of alliance-leveraged ...