Introduction to Commercialisation

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Commercialization is commonly termed as the cycle or process of introducing new products or at times a new production method into the market (Jolly 1997). Commercialization is mostly likened to a funnel. In the widest section, there are many ideas which a company can have in launching the product. As the funnel narrows down, the company normally weeds out a great number of ideas in relation to costs and logistics, economic and consumer trends as well as based on ideas feasibility.

Drivers of commercialization

A major driver of commercialization in today’s market place is commoditization. It is commonly termed as the unvarying pressure to drive margins and prices lower. Based on these, new products which require lesser inputs may be introduced in the market or at times the processes may be modified to ensure that they are less and this will ultimately mean that the prices of the products will reduce drastically. Another driver of commercialization is the digital revolution. New technologies that are being adopted by businesses today enable even the small businesses to be ample to compete well with the big corporations (Jobber 2001). The digital revolution has made it possible for the small firms have the same computational power as the larger firms. The other aspect that leads to commercialization is globalization. Based on these competitors can be derived from any part of the world, irrespective of the geographical distance, industry or market.

How commercialization happens

The first step in commercialization involves the description of the service or product. In this step a clear description of the service or product ought to be made. The description should be so simple that it can be understood by an individual’s who are unfamiliar with it. The second step involves the protection of the intellectual property. One ought to protect his business ideas before talking to others about them (Lancaster & Massingham 1999). One needs to find the most appropriate method of IP that is suitable for his/her product and make good use of it. In this step one also needs to have an agreement with the third parties discussing your ideas to ensure that they do not divulge confidential information. The third step involves conducting research in the market so as to identify the customers, market as well as competitors that the idea or product may face.

The fourth step is concerned with the assessment of the skills. One needs to attend a commercialization course to assess their own skills and know-how in bringing the idea or product to the market. The fifth step involves the identification of the commercialization pathway. This involves a consideration of the most appropriate way of introducing the product to the market (Matsusaka 2001). The sixth step entails the outlining of the objectives and aspects that are needed for the objectives to be achieved. This step is followed by the drafting of a business plan for the commercialization strategy. And the last steps involve the exploration of the various funding options.

Challenges facing commercialization

A major challenge facing commercialization related to the lack of investors. Commercialization is typically an endeavor with high risks and a major source of that risk is the lack of enough information for potential investors. The other risk relates to the leakage of new knowledge which at times surpasses the boundaries of the organization as well as that of the intellectual property protection. Creators of new knowledge are not always able to capture the economic value of such knowledge in their firm (Matsusaka 2001). The above discussed challenges usually pose a substantial obstacle to small firms who are seeking capital from various funding organizations. They usually face a difficulty in attracting the right investors since many of them an unwilling to fund an innovation that is imperfectly understood. By lack of capital many promising ideas usually perish.

Impact of commercialization

A major impact of commercialization is heightened competition between firms. When one firm introduces a new product in the market other firms in the industry tries to introduce new products so as to compete with that firm (Lancaster & Massingham 1999). This mainly leads to competition between the firms with each of them trying to gain as many customers as possible and they may do so my reducing the prices of their products or offering products that is of high quality.

Another impact of commercialization is that it leads to the creation of employment opportunities. Employees in a firm may not be sufficient to meet the product demands. Thus new employees will be needed for example in marketing and in the production of the new product (Jobber 2001). Commercialization can also lead to a higher revenue generation for an organization. This is can be closely linked to the fact that a firm will have additional sources of revenue and this can lead to a higher level of profits for the company.

Commercialization can also have a negative impact and mostly when the product is not fully accepted in the market. It is not always that a new product is accepted in the market and when this happens a firm is likely to suffer. Introduction of new products mainly involves a lot of input in resources such as time, money and human resources. In instances when it fails the firm incur losses since it has already invested a lot prior to the introduction of the product in the market (Fan & Lang 2000).


Based on the above discussion, it is clearly evident that commercialization faces a number of challenges. These challenges need to be dealt with to ensure that the young and innovative people are helped in making their ideas realistic. By doing so commercialization challenges will be a thing of the past and the possible positive impacts will be achieved. Thus the investors the government and other individuals need to play a role in ensuring that commercialization is achieved and they can do this by offering the required level of support and funding. Research bodies can also act in collaboration with the firms in offering all the necessary knowledge to make commercialization work.


Fan, J & Lang, L 2000, ‘The Measurement of Relatedness: An Application to Corporate Diversification’, Journal of Business, vol. 73, pp. 629-60.

Jobber, D 2001, Principles & Practice of Marketing, McGraw-Hill, London.

Jolly, V 1997, Commercializing New Technologies: Getting from Mind to Market, Harvard Business School Press, Harvard.

Lancaster, G & Massingham, L 1999, Essentials of Marketing, McGraw-Hill, London.

Matsusaka, J 2001, ‘Corporate Diversification, Value Maximization, and Organizational Capabilities’, Journal of Business vol. 74, pp. 409-31.