Case Study – #002 Heritage Products to Fund Research

Problem Statement:

Management for our recent R&D acquisition doesn’t have commercial savvy … instead of giving them a cash as an investment we’re thinking of giving them the rights to one of our heritage products that brings in $15 million per year at a gross margin of about 20%. This product is in the same market in which they are doing research. Our thinking is they will then be forced to interact with customers to better understand the features they should be emphasizing in the products they are researching and developing … Our fear is they will be distracted by the commercial concern to an extent greater than the experience will be of value to their research activities. How do we determine whether or not this is the best path for our partner to gain commercial insights?







Further Reading