Product opportunity identification based on internal capabilities using text mining and association rule mining

Abstract

Identifying new product opportunities must be a prerequisite for a firm's sustainable growth since it can help create new market segments. In this regard, a number of studies have attempted to suggest systematic methods to discover new technological opportunities. However, from these methods, it is difficult to figure out which products can come into the market as a result of the technological opportunities. Moreover, they have tried to measure generic potential values without considering a specific target firm so it is hard to judge whether the discovered opportunities are technically feasible to the target firm. These problems tend to reduce the practicality of the discovered technological opportunities. Therefore, this paper proposes a systematic approach to identify potential product opportunities by reflecting the target firm's internal capabilities. The capabilities are inherently unobservable so we need to figure out substitutes for the firm's capabilities. The existing products belonging to a firm can be generally a basis for developing new products. The firm is already good at dealing with the existing products so we consider the firm's existing product portfolios its internal capabilities. We first extract product information from patent database using text mining technique, and then generate product connection rules represented as directed pairs of products. Finally, we evaluate potential value of product opportunities taking into account a firm's internal capabilities. An empirical study is conducted to show the applicability of the presented approach using patents granted in the United States Patent and Trademark Office during 2009 and 2013. We expect that our approach can facilitate product-oriented RD by presenting a front-end model for new product development and deriving feasible product opportunities according to the target firm's internal capabilities. Moreover, the presented systematic approach can be a basis for an RD planning system that can help RD planners in performing product-oriented technology planning activities.