Selection and diversification of market segments for robotics products

Examines the selection and diversification of market segments for robotics products with respect to application areas and customer sectors.

This study attempted to investigate the selection and diversification of market segments by 50 robotics firms in the US with respect to application areas and customer sectors that they serve. Based upon the concept of strategic groups, we classified those robotics firms into three distinct strategic groups along the dimensions of application area diversification and customer sector diversification. The three strategic groups were identified as high, moderate, and low diversification groups, with respect to both application areas and customer sectors.

The results show that robotics firms vary in their selection of application areas and customer sectors, and more importantly in the degree of diversification of application areas and customer sectors. Also, three distinct strategic groups are observed among them, based upon the degree of diversification of application areas and customer sectors.

A few limitations are recognized in this study. First, we used only the dimensions of market segment diversification in classifying the strategic groups in the US robotics industry. Given the important role of technology in the industry, we may consider pairing market dimensions with technology dimensions in exploring any strategic groups in the industry. Second, we only tested for the existence of strategic groups in the industry. We may further consider investigating the factors or reasons for the differences between the strategic groups, as well as any performance differences between the strategic groups. In studying the firm's performance, it is desirable to utilize financial performance measures such as sales growth and profitability. But securing such financial performance measures for individual robotics firms is hampered by the consolidated financial results of diversified firms and the presence of privately held firms in the industry. Third, we used data compiled from a secondary source. We may consider collecting time‐series data directly from robotics firms. These limitations are not certainly exhaustive but rather important ones for future research.

Given the limited studies on robotics firms and their strategy, the results should be of interest to those who formulate product strategy in the robotics market.

The issues of diversification of market segments and the resultant strategic groups that we examined are well worth trying to understand for more viable market strategy in the field. Particularly, the identification of such strategic groups in the industry would help robotics firms evaluate their competitive positions, as well as competitors' approach to the market place.