A new life sciences business approaches 20% of the company's revenue.
A company in the semiconductor equipment sector wanted to rethink its innovation strategy, priorities, and portfolio. Insulating its results from the cyclicality of chip making was one motivation. Enhancing its shareholder returns—which had lagged rivals—was another.
BCG and the client went through a four-stage process:
Identifying those capabilities that were truly differentiated and would offer a “right to win” in a new, adjacent space was the goal. In addition to considering more standard metrics such as market share and the ability to command a price premium, the assessment harnessed BCG's advanced innovation analytics capabilities to reveal those underlying technologies in which the company had a clear intellectual property (IP) advantage. The exercise identified a promising nexus: the ability to create and control very cold environments under a vacuum—and to handle materials within them.
Together, BCG and the company brainstormed and analyzed a long list of potential opportunities—at varying distances from the core—that leveraged the company's advantage. The effort tapped a broad range of inputs. We explored key, relevant megatrends, interviewed client experts and leading-edge customers, and conducted further IP analyses to identify sectors and companies that were seeking to develop expertise in the client's areas of advantage.
The joint team took the long list of potential opportunities and put them through a two-stage filtering process that first looked at strategic fit and then winnowed down the list further based on an assessment of financial and investor fit. This exercise identified a highly promising and emerging market in bio-banking. The need for access to high-quality human tissue for medical research—in such areas as cancer and Alzheimer's research—is growing rapidly. But the systems for sample storage and handling have not advanced to keep pace. The company's advantages in material handling under cold conditions were a perfect fit.
With the client's management team and board excited about this new direction, the company could then jump-start its bio-banking efforts. BCG and the company collaborated with its engineering team to define a set of product prototypes that offered researchers significantly better sample longevity. We helped identify and assess a series of strategic acquisitions to rapidly establish the company as a credible participant in the sector. Working in collaboration, we helped the client as well shape the narrative for Wall Street.
While the strategy is still in its early stages, initial results have been positive. The company has established itself as a major player in the space commanding a 45% share. The new life-sciences business continues to grow and now approaches 20% of the company's revenue. And the many new product and service opportunities in the life-sciences "cold chain" offer significant headroom for future growth.