Re-SWOT your business with 3D printing in mind – Opportunities

In a prior post of this series, I explained why it is wise to (re)SWOT your business with 3D printing* in mind and in another one I suggested assessing the potential Threats your organization could be facing. In this post, it’s about Opportunities offered by the new manufacturing ways.

*I use “3D printing” and “additive manufacturing” interchangeably

Reminder: with the recent progresses in 3D printing (and 3D scanning) with regards to materials that can be 3D printed, every business is potentially at risk to discover a 3D printed substitute offered by an unsuspected and probably unknown competitor.

Yet what is a threat to some is an opportunity to others. The ability to offer a faster, cheaper, highly customized or whatever new product or alternative offer incredible new opportunities.

3D printing may break many barriers to entry, opening wide the gateway to previously protected markets.

Any competitor should evaluate the emerging opportunities to redefine the rules in his/her business with additive manufacturing and the opportunities to diversify or expand into new markets.

Some questions to assess the potential Opportunities your organization could be considering

The intent of the following questions is to make you think about the potential opportunities of a 3D printed product. The list of questions may evolve and readers are welcome to suggest additional or alternate ones (please use the comments).

  • Can you imagine any way 3D printing being applied in your business?
  • If 3D printing would be used in your business, what would it be for?
  • Can you think about a (more) disruptive way 3D printing could be used in your business?
  • What 3D printable product or substitute, if it (would) exist, may give you a cutting edge competitive advantage?
  • Could you offer a 3D printed substitute to existing products? What would its advantages be? What new or additional value would it bring? Would your customers want it?
  • Can you imagine expanding your business entering a new market (or segment) with a 3D printed product?
  • Are there any barriers to entry to a protected market you’ve considered that could be taken down with 3D printing / additive manufacturing?

You may have noticed that these questions are very similar to those about Threats. It is no surprise as opportunities for some are threats for others.


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Re-SWOT your business with 3D printing in mind – Threats

In a prior post of this series, I explained why it is wise to (re)SWOT your business with 3D printing* in mind. In this post, I propose some questions to assess the potential Threats your organization could be facing.

*I use “3D printing” and “additive manufacturing” interchangeably

With the recent progresses in 3D printing (and 3D scanning) with regards to materials that can be 3D printed, every business is potentially at risk to discover a 3D printed substitute offered by an unsuspected and probably unknown competitor.

Some questions to assess the potential Threats your organization could be facing
The intent of the following questions is to make you think about the potential threats of a 3D printed product. The list of questions may evolve and readers are welcome to suggest additional or alternate ones (please use the comments).

  • Can you imagine any way 3D printing being applied in your business?
  • If 3D printing would be used in your business, what would it be for?
  • Can you think about a more disruptive way 3D printing could be used in your business?
  • What 3D printable product or substitute, if it (would) exist, may disrupt your industry / your market / your business?
  • If a 3D printed substitute suddenly appeared, could you offer the same?
  • Does your organisation have any knowledge about 3D printing? Any know-how? If not, how and where would you quickly get the capacity to propose the 3D printed product? (me-too offering)
  • Did you evaluate how much savings a 3D printed substitute could earn?
  • Compared to 3D printed part or product, what are the advantages of your traditional way of manufacturing?
  • Would your customers continue to pay for if they had the choice with a new 3D printed substitute?

It is possible that going through the questions above, you sense opportunities more or as well as threats. Fine! Opportunities are the next topic to explore.


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Will 3D printing revitalize strategic analysis?

It seems to me that in the last decades strategic analysis focused mainly on monitoring new entrants from low-cost countries, struggling with competitors and entering emerging countries’ markets.

Compared to Michael Porter’s model of five forces, the above takes care about two at best; Threat of new entrants and intensity of competitive rivalry.

Reminder of the five forces:

  • Threat of new entrants
  • Threat of substitute products or services
  • Bargaining power of customers (buyers)
  • Intensity of competitive rivalry
  • Bargaining power of suppliers

With the rise of additive manufacturing techniques, 3D printing being a flagship for them all, competitors in some businesses may have to reconsider the basics and the neglected forces.

Threat of substitute products or services

Among the neglected forces, the threat of substitute products or services comes to mind quickly. What have been manufactured in traditional way with several machining and assembly steps could be produced in one step with additive techniques, for cheaper* and in many cases faster.

*Cheaper remains questionable if considered in high volume. What seems obvious is the cost of manufacturing replacement parts in additive manufacturing vs traditional manufacturing. In the first case, parts can be printed in units when needed while in traditional manufacturing, parts would be produced in minimal batches, regardless the real demand. If the other parts of the batch aren’t sold, they’ll be total waste thus no saving with economies of scale.

The new techniques have to be mastered but do not seem so difficult to master to be barriers to entry. If they would, it would be irony to see a long established competitor locked out of his own business because he didn’t prepare for the substitute. A case not totally unlikely to happen.

The new techniques are/soon will be available to anyone, which means capital investment or access to these technologies are no barriers to entry either.

This brings us to next threats: threat of new (unexpected) entrants, bargaining power of suppliers and buyers.

Threat of new (unexpected) entrants

With the new techniques made easy and affordable (still taking 3D printing as example), literally anybody can establish him/herself as competitor. This could be former buyers, customers, enabled to manufacture themselves what they had to buy before. Many of them may not create a business, but as they are many, if a majority prints products or parts themselves instead of buying them, it can be enough to kill an established business.

Former buyers like distributors may be more serious potential new competitor as they may consider creating value from raw material instead of storing and distributing goods. Manufacturing with additive techniques will require few capital while distribution requires huge capital sitting in warehouse, carries over costs and all the risks.

These new competitors would no more (not only) provide a service by selling off-the-shelf, but manufacture-on-demand and possibly modify, improve or adapt the products.

Bargaining power of customers (buyers)

Former customers, now new competitors, like distributors could enforce their bargaining power as they will not be competitors for the whole product panel thus keep being customers, which in turn could enforce bargaining power of suppliers.

Bargaining power of suppliers

The first suppliers of substitute products will certainly have some bargaining power, yet their position will most likely be quickly challenged, revealed “blue oceans” being attractive to competition and barriers to entry not really existing.

Additive manufacturing will very probably disrupt many businesses, yet I do not believe everything can be provided cheaper and better (what ever better means) with 3D printers and the like. Mundane items of daily use, produced in very large batches may still continue to be manufactured the way they are.
In many cases, consumers will continue to trust genuine parts and original maker’s products. Therefore, in some trades and businesses where the choice will exist, traditional makers may regain some bargaining power when it comes to compare quality, safety, trust, reputation, esteem value, etc.

Will 3D printing revitalize strategic analysis?

Finally will 3D printing revitalize strategic analysis? I do think so. Threats will multiply as well as opportunities and new options in manufacturing require to broaden the scope of analysis.


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Michael Porter’s five forces (video)

In several past posts related to additive manufacturing / 3D printing I mentioned Michael Porter’s five forces model, its real name being The Five Competitive Forces That Shape Strategy.
In this post, I pay credit to Mr Porter and let himself explain what the five forces are.


You may also like a brief video on this subject provided by Harvard Business Review: The Five Competitive Forces That Shape Strategy


Creativity breaks loose from constraints with additive manufacturing

Chris HOHMANN

Author: Chris HOHMANN

New additive manufacturing technologies – let’s take 3D printing as symbol for them – are freeing designers from constraints that came with traditional manufacturing and the assembly methods.

Additive manufacturing means adding layer of material after layer instead of cutting out material from a bigger raw chunk, allowing the design of complex and odd shapes without having to care how to let cutting tools do it.

Hollow and curved shapes, spirals, double helixes, or even a Moebius band are no more problem to produce. Shapes that required sophisticated machining or expensive molds can now be 3D printed relatively fast and low cost.

With additive manufacturing, it is possible to 3D print a fully functional ball bearing directly in its place in a complex shaped part. This is also very important because it means there is no more need to source the ball bearing and design the part to receive it, which may ease the design, suppress several assembly steps and all the attachments.

Production is not only faster, it is cheaper because lots of intermediary steps are removed, including sourcing of parts and components.

Additive manufacturing speed itself may not be very fast, but has to be considered relatively to traditional manufacturing requiring to source and supply material and parts first, prior to manufacture and/or assembly. With most of material and parts coming from Asia, even if machining and assembly are fast, the shipment from supplier takes at least a month to arrive.

Faster, cheaper, less suppliers dependent and highly customizable, these promises of additive manufacturing offer opportunities not only to free designers from a lot of constraints but companies to settle their business next to their customers, amidst their markets.

This reduces furthermore logistic costs and delivery time, probably balancing the other (higher?) costs and allowing reshoring or nearshoring businesses.

It allows also new entrants to step into business without having to master all traditional manufacturing techniques or supply chain constraints.

On this topic read my >3D printing and Porter’s five forces post

What is true for manufacturing is true for after sales servicing. Spare parts or replacements can be printed on demand, long after a model have been discontinued. No need to store costly inventories of numerous references, just print them when needed, in the proper suitable version.

Additive manufacturing / 3D printing may revitalize industries in the US and Western Europe, which is good news!

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3D Printing and Porter’s five forces – opportunities

In a previous post on this topic I highlighted the threats of 3D printing – as symbol of any additive manufacturing technology – disrupting traditional businesses, wondering if threatened business owners and professionals are aware of it. In this post I’ll take the opposite point of view, as a challenger to established businesses, breaking the rules with the help of new manufacturing techniques.

With these new techniques and new printable materials, virtually anyone can become a manufacturer, almost overnight. Reconsidering Michael Porter’s five forces model for industry analysis and business strategy development from the point of view of a potential new entrant, the analysis could go like this:

Threat of new entrants

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Author: Chris HOHMANN

The new entrant will threat established businesses by disrupting the way business is done, for instance the offer itself, the prices, customization and speed of delivery. Enter business is easy with new technologies breaking former barriers to entry. 3D printers are not very capital intensive assets.
As a reaction, threatened competitors can lobby to harden regulations and keep new entrants out or limited to niches, trying to raise new barriers. But this is more likely a local strategy as a global world-wide consensus to ban new tech or protect businesses is hard to imagine.
Once in business, the challenger will probably meet others having similar objectives and aggressive offerings. The challenger should therefore fear other new entrants. This leads us to intensity of competitive rivalry.

Intensity of competitive rivalry

New opportunities will probably attract many challengers, especially in dull economies, fuelling competitive rivalry.
Competitors in place may adapt and switch themselves to new technologies. In some cases, their former experience and/or customer base is a real advantage compared to new entrants.

On the other hand, established businesses may still use old capital intensive assets or equipment not yet free from amortization. In many cases this could be a (bad?) reason for them to stick to old ways.

Finally, customers themselves may enter the competition by manufacturing for themselves, turning into competitors of sorts. They may have personal 3D printers or go to a 3D print shop or the next fablab. Customers will probably not 3D print on large scale and setup a business, but doing themselves for family and friends they reduce sales opportunities. This threat should not be underestimated as a lot of small individual players can “capture” a significant market share.

Threat of substitute products or services

Additive manufacturing is relatively new. 3D printing in various materials may see further progress and innovation, allowing new applications, new products and services to emerge. At the actual pace of innovation, hard to say if it will go on or mature as it is. Would I be a challenger or an established business owner, I would keep active watching what may come anyway!

Bargaining power of customers (buyers)

Each time the offer exceeds the demand, the power goes to customers. With the relative ease to establish as a manufacturer, service provider, etc. the number of competitors should increase and their rivalry thus giving more choice, hence bargaining power to customers.

Bargaining power of suppliers

For equipment and raw material suppliers, the trend could go opposite: from few suppliers at the beginning, their number may increase. One can imagine the 3D printing following inkjet printing model: low cost or even free printers but relatively expensive (read profitable) material, just like ink cartridges (or some coffee capsules).

If the printing material becomes a convenience, the number of suppliers may decrease again because of limited profit. The last survivors will regain some power concentrating the supplies on fewer actors.

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3D Printing and Porter’s five forces

In a previous post on this topic I wondered about the pace of announcement of new amazing possibilities offered by 3D printing. I also wonder how the potential disruptions of 3D printing are ignored or underestimated.

With the new techniques and new printable materials, virtually anyone can become a manufacturer. While this is good news for revitalizing a declining industry, it can mean doomsday for those not paying attention.

Chris HOHMANN

Author: Chris HOHMANN

3D printing reminds me Porter’s five forces model for industry analysis and business strategy development. In this model, Michael Porter had outlined five forces that determine the competitive intensity within a market:

  • Threat of new entrants
  • Threat of substitute products or services
  • Bargaining power of customers (buyers)
  • Intensity of competitive rivalry
  • Bargaining power of suppliers

From my point of view, 3D printing is all five at once, threatening existing businesses and trades and bringing new opportunities to many actors, to enter or transform existing businesses and trades.

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Threat of new entrants

Virtually anyone equipped with 3D printer can establish him/herself as manufacturer. This may not bother established manufacturers at first glance, as these new “competitors” may be geeks or techno lovers giving a try on some new toy.

Yes but if 3D printing comes cheap and easy as it seem to come, many households may become small manufacturers for themselves for some parts or products. And if the number of households becomes significant, it means significant amount of turnover swaps from buying finished parts or products to buying 3D printers and raw printing material, users generating added value themselves, at will.

What can happen with households, geeks and techno lover can happen with anybody: investors sensing opportunities, companies eager to diversify, entrepreneurs…

This is not only about producing small widgets, plastic ornaments or cartoon figurines, as I mentioned in my previous post, it could/does threat prosthetics, dentists, podologists and also many other businesses and trades like spare parts for aftermarket, construction, etc.

New companies establishing as manufacturers can operate close to their customers, further improving responsiveness and delivering short term. The advantages of customization, delivery speed and other cost savings could question the large manufacturing facilities abroad, especially when local labor cost rise quickly and logistic routes remain extended, hence delivery speed slow and responsiveness poor.

Threat of substitute products or services

3D printed insoles, dentures and braces already exist, even 3D printed firearms exist as substitutes for the traditional ones, which is not only a threat for gunsmiths by the way.

Some of these new products come with better characteristics (3D printed insoles are allegedly washable, printable in many shapes and color and anti–microbial for instance), many times cheaper and faster.

Furthermore, customers will be/are able to modify the original model to fit their taste or specific needs and print them at will, without holding costly inventories of finished goods.

Services like designing, customizing products or fast delivery simply disappear as taken over by customers themselves.

Crowdsourcing and hacking are other kinds of substitution for R&D, development, engineering, design!

If you take time to consider differences between traditional subtractive manufacturing and 3D printing / additive manufacturing, you’ll see who is potentially threatened: mold makers, machine-tool makers, tool vendors, subcontractors, distributors and more.

Distributors, instead of providing stocking, cross docking, commissioning and shipping could turn on-demand manufacturers, shifting their risky business to a safer and higher adding-value one. Yesterday’s customers becoming new competitors.

The ability to manufacture replacement parts on demand using 3-D printers could transform the economics of aftermarket service and the structure of industries. Relatively small facilities with on-site additivemanufacturing capabilities could replace large regional warehouses. The supply of service parts might even be outsourced: small fabricators (or fabs) located, for example, at airports, hospitals, or major manufacturing venues could make these parts for much of the equipment used on site, with data supplied directly by the manufacturers.

Source: 3-D printing takes shape, McKinsey

Bargaining power of customers (buyers)

Customers will gain tremendous power, as well B2B customers as B2C customers, being able to manufacture by themselves or to source parts and products, even services, among new competitors.

What leads us to intensity of competitive rivalry, turbocharged by new entrants, innovations and all kinds of disruptions.

Bargaining power of suppliers

Bargaining power of (surviving) suppliers will also increase as does the position of the last survivors in declining markets. Fewer suppliers means greater power for themselves. This will be true for businesses and trades having 3D printable or additive manufacturing viable substitutes.

It will also be the case for the new manufacturing techniques equipment, specific software and specific material vendors, mastering their inherent properties and/or difficulties.

Initially, these new competitors will be niche players, operating where consumers are willing to pay a premium for a bespoke design, complex geometry, or rapid delivery. Over the longer term, however, they could transform industries in unexpected ways, moving the source of competitive advantage away from the ability to manufacture in high volumes at low-cost and toward other areas of the value chain, such as design or even the ownership of customer networks.

Source: 3-D printing takes shape, McKinsey

Amazon launches new 3D Printers & Supplies section

There is no way to stop 3D printer’s home invasion. Though Amazon’s CEO Jeff Bezos believes 3D printing will not change the distribution of products anytime soon, the company sees also the explosive growth of 3D printing. Amazon decided to seriously involve in the 3D printing market by launching a new section for 3D Printers & Supplies under Industrial & Scientific > Additive Manufacturing Products category.

Source: http://www.3ders.org/articles/20130608-amazon-launches-new-3d-printers-supplies-section.html

Amazon launches pilot program selling 3D printed items

“When it was announced that Amazon would begin selling 3D printers and supplies last summer, the industry heralded it as a defining moment, a clear indication that 3D printing was going mainstream,” says Hauer. “We think the decision to sell 3D printed products sends an even bigger message. Consumer products are the next frontier.”

Source: http://www.3ders.org/articles/20140306-amazon-launches-pilot-program-selling-3d-printed-items-teams-with-3dlt.html

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>Next: 3D printing and Porter’s forces – opportunities

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