Brand Relevance: Making Competitors Irrelevant - always yours

FINDING NEW CONCEPTS 189
the product and the brand - building activities, created a new
subcategory. The same was true with Kirin Ichiban and IKEA.
There was a $ 1.2 billion encyclopedia industry in 1991, with
Encyclopedia Britannica fi ghting with WorldBook to sell $ 1,000
sets. Two years later Microsoft introduced Encarta, the somewhat
inferior Funk & Wagnalls encyclopedia but on a compact
disc for $ 100, and within three years had captured nearly
20 percent of a market that had shrunk to $ 600 million. The
door - to - door sales forces of the legacy fi rms turned from an asset
to a liability. Encyclopedias on a disk was a technology - enabled
new subcategory. The key was recognizing the potential application
of a new technology, perhaps aided by a creative - thinking
exercise. Microsoft closed Encarta in 2009, but during nearly
two decades it had a nice run.
Often a new technology is developed for a use that is very
different from its ultimate role in creating a new business arena.
The challenge is to recognize promising developments and continually
test them for applications outside their initial scope.
As noted earlier, the main Intel business driver from the early
to mid - 1980s through the 1990s was the microprocessor, which
was developed when a Japanese company asked Intel to design
the innards for a calculator they were planning. The potential
commercial applications of the technology did not at fi rst seem
promising but it was intriguing enough that a decision was made
to gain the rights to it. When IBM chose Intel ’ s 8086 in 1981 to
power its personal computer, an event unanticipated with the
microprocessor bet was made, the microprocessor train really
took off. Flash memory, big business for Intel in the 1990s, was
fi rst thought to have little potential until the belief caught hold
that it might replace power - hungry disc drives. The ultimate
winning application turned out, however, to be mobile computing.
At least two of Intel ’ s big products during the two decades
of phenomenal growth, microprocessors and fl ash memory, were
fueled by unexpected applications that emerged well after the
technology was developed.