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TMCVocabulary

How to Segment the Japan Market

pg.5

By Davis Huang

First and foremost, the licensing deal would establish a business relationship between our Company and the Keiretsu, and would result in upfront licensing revenues to help offset ongoing sales development investments. Also, the Keiretsu semiconductor business was willing to expose our Company's technical team to the system businesses within the Keiretsu, setting the stage for direct sales of standard memory products down the road. But perhaps the biggest benefit to this licensing arrangement was that in cooperating on embedded memory designs our Company gained invaluable systems knowledge, knowledge about the opportunity for FLASH memory technology to add significant value to system functionality.

Results
Following successful completion of the technology evaluation, the Keiretsu semiconductor group licensed our memory technology for several million dollars. This opinion leading semiconductor partner within the Keiretsu was then willing to provide positive reference in the community, which helped our Company establish market share within the Keiretsu for the next 2 to 3 years.

Successful adoption of the technology by the opinion leader eventually became a differentiating element in the Company's standard product offering, and was the foundation for later taking share in the competitive mature market for volume FLASH memory products throughout the Keiretsu companies. Ultimately our Company was able to leverage our track record in our target Keiretsu, through intertwined business partnerships, to customers in other Keiretsu across Japan.