Lighting Products Manufacturer Develops New Smart Systems and Services Strategy To Break From Its Past Product Centric Culture

We recently engaged with a manufacturer of lighting fixtures and systems serving buildings, city infrastructure, commercial, retail, institutional and industrial markets. The client engaged Harbor to help examine its strategy to expand its presence in the smart lighting systems and services arena.

While the client had significant strengths in its market position and a growing competitive advantage from the shift to LED lighting systems and technologies, the company still faced many strategic challenges accessing smart lighting systems opportunities. With a presence in many markets, the client needed to understand which markets to target with which solutions, product capabilities and services. Coming from a traditional product-centric background, our client wanted to investigate whether they needed to create, invest or acquire an existing smart lighting venture to help accelerate its expansion and growth.

We initiated this engagement with a group of internal interviews with client staff complimented by a set of external interviews with industry experts and thought leaders. Collectively the interviews allowed us to work with the client team to develop a growth strategy hypothesis focusing on elevating the most attractive applications, uses cases and market segments for smart lighting systems and additionally addressing a critical strategic question concerning whether smart lighting systems would be adopted independently of building equipment systems or more often adopted as part of larger smart smart building technology solutions.

With this hypothesis in hand we proceeded to address the following process steps:

1. Conducting a market opportunity assessment analyzing diverse smart lighting segments and applications to develop a quantitative market model of the available growth opportunities.
2. Organizing a set of opportunity screens based on criteria developed with the client team including external factors such as the size, growth and competitive entrenchment of segments as well as internal factors such as the clients existing sales and channel resources.
3. Conducting a demographically balanced group of voice of customer interviews across the client’s vertical segments to identify and validate potential opportunities and analyze customer buying behaviors and solution bundling preferences.
4. Analyzing, in depth, the competitive structure within each potential market segment focusing on both traditional and emergent competitors and their specific smart lighting capabilities.
5. Assessing user and customer buying behaviors and new technology adoption patterns to determine whether or not smart lighting systems would be adopted on a focused basis or as part of a larger scope of smart building equipment and systems.

Combining our earlier analysis of the size and attractiveness of market segments and applications with our field research and customer interview results, we worked with the client team to “short-list” the opportunities and determine what solutions and go-to-market structures it should use to drive adoption of new smart lighting systems within select segments. Following this we separately met with senior leadership to present our analysis and recommendations concerning smart lighting systems adoption, bundling and buying behavior and its related impact on leadership decisions regarding new growth ventures.

After organizing and presenting the market development analysis on the most attractive segments, we helped the client assess and consider the organization’s ability to bring these new solutions to market and helped leadership reach the conclusion that they should carefully consider a focused set of maneuvers to accelerate their market expansion including potential acquisitions, minority equity investments and growth venture development. We also presented a business case developed with the clients team that underscored the need to directly address bundling building equipment with smart lighting solutions to help accelerate adoption of new smart systems.

As a result of the engagement, the client made two smart lighting acquisitions and an additional acquisition of a smart building systems company acquisition. Elements of the smart lighting acquisitions were combined to create a new autonomous smart lighting venture to help accelerate leveraging existing assets and capabilities. These steps have since allowed our client to become an early leader in the smart lighting and buildings space and contributed directly to the company tripling its market value.