1. 10
MARIST COLLEGE 3399 North Road, Poughkeepsie, NY 12601
STRATEGIC ANALYSIS OF
STRATASYS’ MAKERBOT

2. 1
Executive Summary
Makerbot is an American subsidiary of Stratasys, which is headquartered in Brooklyn,
New York and specialized in the development and marketing of desktop 3D printers, materials,
and services. The following strategic analysis provides an external overview of the 3D printing
industry along with an extensive internal analysis of the individual company’s positioning within
its macroenvironment.
The ultimate purpose of the strategic analysis is to present Stratasys’ business case and
strategic question in order to come up with a final recommendation for differentiating itself
among dominant 3D printing market players. The strategic question is “How can Stratasys and
Makerbot differentiate itself among competitors in the 3D printing industry and grow revenue
streams?”
The external analysis demonstrates opportunities catalyzed by the multiple applications
of different 3D printers, key technology patent expirations, and further technological
advancements. The industry remains attractive for 3D systems and Stratasys as these companies
control over 70% of total market share in the 3D printing industry. Within the competitive
environment, Stratasys currently holds a slight advantage over 3D systems due to the strong
demand for Makerbot’s legacy 3D printers.
The internal analysis indicates that the company utilizing a multidivisional organization
structure as it operates under seven different brand names. Stratasys’ core competency is
predicated on its diverse product mix, strong patent portfolio, ABSplus material, and its current
presence in both consumer and industrial markets with its utilization of Fused Deposition
Modeling and inkjet based Polyjet 3D printing.
My recommendation for Stratasys is to consolidate its brand and introduce cross-selling
networks through a subscription-based open-source platform and continued development of
partnerships with multinational retailers. The strategy is meant to create brand equity and
differentiate itself among key competitors in the 3D printing industry going forward.

3. 2
I INTRODUCTION
A. General Introduction
B. History of the Firm
C. The Formula
D. Strategic Question
II EXTERNAL ANALYSIS: Identifying Opportunities and Threats
A. General Environment
a) Demographic
b) Economic
c) Global
d) Natural
e) Political/regulatory/legal
f) Socio-cultural
g) Technological
h) Red Thread
B. Competitive Environment
a) Industry Structure
b) Industry Life Cycle
c) Porter 5 Forces
d) Industry Attractiveness
C. Competitor Environment
a) Strategic Group Analysis
b) Key Success Factor Analysis
c) Competitor Dynamics
d) Competitor Response
III INTERNAL ANALYSIS
A. Nature of the Firm: Culture & Leadership
B. Organization Structure
C. Value Chain Analysis: Finding Core Competence
D. Analysis of Pertinent Financial Ratios
a) Liquidity Ratios
b) Efficiency Measures
c) Profitability Ratios
d) Market Valuation Measures
e) DeterminingCompetitive Advantage
IV SWOTANALYSIS
A. SWOT Overview
B. Strategic Orientation
C. Attractiveness
D. Investment
V STRATEGIC CHOICE
A. Generic Strategy
B. Restatement of Strategic Question
C. Recommendation & Justification
VI MANAGERIAL IMPLICATIONS
A. Value Chain
B. Competitor Dynamics
C. Stakeholder Consideration
D. Ethical Framework
E. MarketingCommunications
VII. Conclusion

4. 3
I.) Beginnings
A.) Introduction
 Makerbot Industries focuses producing desktop 3D printers
and have become the 3D printing industry’s top competitor in
this segment. The company’s revenue segments are broken
down primarily into its Makerbot Replicator series, Makerbot
Digitzer, and Makerbot material filaments. Makerbot’s 3D
printing capacity appeals to consumer-oriented, hobbyist, and
design applications as the company currently controls over 25%
of total consumer 3D printers sold.
 Makerbot is a subsidiary of Stratasys, a company that
maintains a leadership position in additive manufacturing solutions for design, industrial
applications, and the manufacturing of parts essential to production processes. Stratasys
segments are focused in prototyping applications through the use of its production series,
idea series, and design series. The company also provides 3D printing services and
materials necessary in the 3D printing process.
 The 3D printing industry is a competitive market in its growth phase with dominant
market players in 3D systems and Stratasys. The industry is made up of companies
utilizing additive manufacturing, which is the process of fabricating three-dimensional
products by layering materials on top of each other and binding all dimensions. The 3D
printing industry is projected to boost innovation for creative users and reinvent the way
products are manufactured. The key developments in technology utilized in the 3D
printing process has driven growth.
B.) Brief History
 Makerbot was developed out of RepRap Research Foundation,
which is a project devoted to do-it-yourself 3D printing for
consumers that are looking to produce 3D components in an
intuitive way. The company began selling consumer 3D
printing kits and printers in 2009 and started to develop its
own products. Makerbot received initial seed funding from
Adrian Bowyer and Jake Lodwick amounting to a total of
$75,000. In 2010, Makerbot completed a strategic merger with
3DWorldWide, which was recognized for pioneering early 3D
printing components. The company received equity financing
of 10 million in 2011 and merged with Stratasys Incorporated
in 2013 in a stock transaction worth $403 million. Currently,
Makerbot is headquartered in Brooklyn, NY and operates within consumer 3D segments
in the domestic United States markets. The current technology that Makerbot utilizes for
its 3D printing product line is Fused Deposition Modeling, which is traditionally utilized
in commercial applications for rapid prototyping.

5. 4
C.) Vision and Mission Statements
“Our mission is to provide design and manufacturing professionals with innovative,cost-
effective and environmentally safe in-office 3D printing, 3Dproduction, and manufacturing
services that accelerate their products to market.”1
D.) Strategic Question
How can Stratasys/Makerbot differentiate itself among competitors in the 3D
printing industry and grow revenue streams?
I. External Analysis: Identifying Opportunities and Threats
A.) General Environment
a.) Demographic
Opportunities
 The 3D printing industry stands to witness opportunities catering to a customer
demographic in fashion, enterprises, medicine, retailers, architects, artists, automotive,
the defense sector, and advertising or marketing agencies. Demographics in the 3D
printing industry will be mostly driven by Automotive, Medical, and Aerospace
applications, which is expected to account for 84% of the entire market by 2025.2
 Currently, the overwhelming demographic that the 3D printing industry caters to is the
manufacturing industry because of the ability to rapidly create a prototype and increase
production efficiency. The areas of manufacturing that will be most affected include low-
volume products that are highly customized.2
Furthermore, 25% of those in the industry
that utilize discrete manufacturing process will adopt 3D printing for producing parts
used in developing the product or service they market. 3 This includes aerospace engines
and automotive components markets, which are expected to grow from currently a $1
million dollar market to a $1.1 billion dollar market by 2025. 3D printing’s applications
in the medical market are expected to grow from $11 million dollars to 1.9 billion dollars
by 2015. This growth is mainly attributable to uses in orthopedic implants, prosthetics,
and artificial organs. 2
 The hobbyist, artist, educational institutions, consumer, and enterprise demographic will
mainly be driven by 20-30% lower price points and improved functionality in 3D printing
1
“Stratasys: Corporate”. http://www.stratasys.com/corporate/about-us.(2013). Accessed November 18,
2013
2 Lux Reasearch,"Automotive, Healthcare and Aerospace Industry: 3D Printing to be $8.4 Billion Market
by 2025." Last modified 2013. Accessed November 3, 2013.
3 Halpern, Suleski. Gartner Research, "Predicts 2013: Product Design and Life Cycle
Management." Accessed November 3, 2013.

6. 5
technology over the last 3 years. Hobbyist and educators throughout engineering, design,
architecture and art utilize computer aided design methods to produce models of work
using 3D printers.4 Examples include residential and commercial project concepts for
architects and development of jewelry, accessories, or garment design within the fashion
industry. Enterprise and consumer demand will materialize as worldwide shipments of
3D printers priced less than 100,000 are expected to reach 98,065 units by 2014 with
growth of 75% from 2013-2014. The enterprise segment is intended to make up $536
million of the market in 2014 while consumer spending is intended to reach $1335
 By 2017, seven of the world’s top largest multinational retailers are going to sell 3D
printers through their physical or online stores. These retailers sell the individual printers,
the supplies, and the 3D printed pieces. Retailers can also add to product sales through
3D printing services that allow them to print deviations of stock items to cater to unique
customer product needs. Some of the service bureaus currently in the market include
Cloudfab, FigurePrints, and Materialise. Going forward, retailers can acquire customer
demand for the printers themselves by initiating the 3D printer service that will allow
them to access local demand.67
 Opportunities are also arising in the 3D printing industry for large companies such as
Coca-Cola and Adidas. Both companies have built in 3D printing technology into their
marketing schemes and advertising campaigns. As a part of a promotion of their new
mini-bottles in September, Coca-Cola invited consumers to a 3D printing lab to be
scanned and have a mini 3D printed version of themselves. Also, Adidas is running a
campaign in Hong Kong called “We Print originals”, with a lot of the cultural items that
are being created include double decker buses, boom boxes, and celebrities that are
scanned wearing original adidas attire. This marketing scheme on behalf of Adidas and
Coca-Cola represents a way for them to adhere to the younger generations.
Threats
 A looming consideration for retailers is the possibility of deliberate or unintentional
copyright infringement by consumers. To get an understanding of external environment,
the US alone has suffered from over $300 billion worth of intellectual property theft. The
wide variety of technologies gives these 3D printers more ease with duplicating unique
products. Also, lower cost of 3D printers makes them available to a more diverse
4 Basiliere, Halpern. Gartner Research, "Use the Gartner Business Model Framework to
Determine the Impact of 3D Printing." Accessed November 3, 2013.
5 Shrivastava, . Times of India , "Worldwide shipments of 3D printers to grow 49% in 2013:
Gartner." Accessed November 3, 2013.
6 Basiliere, . Gartner Research, "How 3D Printing Disrupts Business and Creates New
Opportunities." Accessed November 3, 2013.
7 Ferrante, . Gartner Research, "Top Industries Predicts 2014: The Pressure for Fundamental
Transformation Continues to Accelerate." Last modified October 4, 2013. Accessed November 3,
2013.

7. 6
population, which includes increased availability to IP criminals.8 Utilizing 3D printing
scanners, one can easily replicate the exact design of a product into a digital file and then
sell it through the internet. Preemptive strategies that are arising involve identifying
products with unique tags in order to prevent counterfeiting. The reactions on behalf of
companies is also going to be geared towards negotiating licensing agreements for
replicating and selling their products rather than suing or introducing legal ramifications.
9
 Announced in October, there will be a key patent expiration on SLS technology
(Selective Laser Sintering), which is a low cost printing technology. Based on Industry
Market Trend Analysis, the expiration of this patent will increase competition and drive
the price of industrial 3D printers down while desktop printers will now be able to mold
and mass produce the exact designs created by the consumer.10 While most believe this
will provide better opportunities for 3D printing in the consumer market, companies that
are able to differentiate will keep higher margin targets and maintain their pricing
strategy of desktop 3D printers. Also, low quality of 3D printers are predicted to be the
ones that are more affordable and under the 1,000 dollar price point, which can deter
demand consumers, hobbyists, small enterprises, and artists.11
8 Halpern, . Gartner Research, "Gartner Top Predictions 2014: Plan for a Disruptive, but
Constructive Future." Last modified October 7, 2013. Accessed November 3, 2013.
9 Bloomberg, "3-D Printing: the Ultimate Intellectual-Property Threat?." Last modified May 15,
2013. Accessed November 3, 2013.
10 Lewis, . Industry Market Trends , "Selective Laser Sintering Patent Expiration Will Not Be a
Game Changer." Last modified September 4, 2013. Accessed November 3, 2013.
11 Dillow, . CNN Money, "5 reasons 3-D printing isn't quite ready for prime time." Last modified
September 3, 2013. Accessed November 3, 2013.

8. 7
b.) Economics
Opportunities
 3D printing is expected to be a $6 billion dollar market by 2017 and a $10.8 billion dollar
market by 2021, in which 25% of the market is attributable to production-ready
products.1213 3D printing has been around since the 1980s and it's set to be a $3 billion
business by 2016. http://www.3ders.org/articles/20130907-3d-printing-the-3-billion-
dollars-job-creating-industry.htmlAs mentioned previously, the worldwide shipments of
3D printers that are priced below 100,000 to grow 49% in 2013, and 75% in 2014, with
unit shipments reaching
98,065.14
 Forecasts indicate that 70,000
personal printers will be sold in
2013.15 Based on the analysis
of the cost to 3D print a product
vs. the consumer purchasing
and delivering a particular
product. 3D printing is
supposed to cause tremendous
household savings at
approximately 2,000 per year.
The average cost to purchase
and deliver 20 conventional
household products costs
between 312-1,944 while the
cost of desktop 3D printers ranges from $350-$1,944 with $18 dollars of printer supplies
and 25 hours of production time. In conclusion, household consumers would break-even
after four months to two years with the conservative assumption that households will
print 20 items a year. Therefore, the marginal benefit of 3D printing to the consumer
outweighs the marginal cost from the end of one year into perpetuity.1617
12 The economist, "3D printing scales up." Last modified 2013. Accessed November 5, 2013.
13 Federowicz, . Business Wire, "Big Opportunities Opening Up in 3D Printing Market." Last
modified September 17, 2013. Accessed November 5, 2013.
14 Rivera, . Gartner, "Gartner Says Worldwide Shipments of 3D Printers to Grow 49 Percent in
2013
15 Wood. CNBC, "Research and Markets: Personal 3D Printers: Market Forecast and Market
Share Analysis: 2013-2022 Featuring the Top 10 Companies such as Microsoft, Staples and
UPS."
16 Williams, . The Telegraph, "3D printing could save US households $2,000 a year." Last
modified August 2, 2013.

9. 8
 In the 3D printing industry, crowdsourcing provides an opportunity to improve company
capital structures because it increases transparency in valuation and opens up a large pool
of eligible capital for companies looking to finance early stages of growth. There are
currently 40 different 3D printing companies that have utilized crowd funding platforms
such as Kickstarter and Indiegogo. Currently, accredited investors are allowed to pledge
anywhere from $5,000 to $3 million. So far, 3D companies that have raised above their
target financing include Aleph Objects, LulzBot TAZ, Hyrel 3D, and QU-BD.18
Threats
Supply Chain Before After
3D printing is expected to cause unemployment in the manufacturing industry and move our
economic structure into more service-based jobs. This is attributable to the idea that 3D printing
attracts skilled labor, which is higher wage and creates wealth in the economy but contracts the
manufacturing industry. Studies conclude that the development of rapid prototyping should make
mass production obsolete. This is due to the lack of human elements involved in the new supply
chain formed by rapid prototyping.19
c.) Social-Cultural
17 Eureka, . 3D printing, "The Economic Impacts of 3D Printing." Last modified 2012. Accessed
November 10, 2013.
18 Wohlers, . Wohlers Associates, "Crowdfunding Loves 3D Printing." Last modified October 27,
2013.
19 Eureka, . 3D printing, "The Economic Impacts of 3D Printing." Last modified 2012. Accessed
November 10, 2013.

10. 9
Opportunities
 Since 3D printing provides just-
in-time production, researchers
feel that manufacturers will be
more inclined to sharing ideas for
efficiency and design. Intellectual
property rights related to 3D
printing may eventually be traded
on a standardized international IP exchange that provides pricing and licensing
agreements for unique designs. Currently, access to digital design files remains accessible
on the internet through Thingerverse, which is a website that provides sharing of 3D
design for free. Although true, the quality of the design is compromised by the fact that
the files are being presented by individuals without a 3D printer. The final assumption is
that consumers, hobbyists, and manufacturers will be able to connect with each other
socially while paying a premium for Computer-aided design files that are high quality,
plausible, and beneficial to typical daily functions20
 The movement of 3D printing towards open source platforms has revolutionized the
sharing of innovative design and technological expertise through social communities and
forums developing on the internet. Consumer fabrications along with the influence of
society’s current technological and open-source capability will increase creativity in
individual product development, in which the design would compete with companies
creating their product lines in research and development facilities. This notion creates the
result of neo-cottage industry manufacturing, which is essentially the “EBay of 3D
printing design” where individuals market their innovative product design with digital
instructions and material inputs that can be fabricating on another individual’s personal
3D fabricator.21
 Companies such as Thingiverse and Shapeway allow for both sharing of design files and
on-demand printing services respectively. Also, Rep-Rap is helping consumers have
access to a network for assistance with assembly of the 3D printing machines. The
cultural movement of 3D printing is also strongly controlled by “Fab Labs”, which are
workshops where non-professionals can get exposure to new technology. All of these
factors are meant to influence society’s movement towards creativity and communal self-
production rather than pure consumption.22
Threats
20 Mearian, computer world, "Will 3D printing kill IP?" Last modified September 19, 2013.
21 Ratto, "Materializing 3D Printing." Last modified July 2, 2012. Accessed September 17, 2013.
22 IBID

11. 10
 A team of scientists from Illinois and France discovered that the harm of ultrafine
particles that are emitted and inhaled by humans can cause health issues. Epidemiological
studies have demonstrated that the high concentration of UFPs can lead to
cardiorespiratory mortality, stroke, and asthma. After testing two 3D printing materials in
ABS and PLA for UFP emission, results show that ABS emits 10 times as many ultra-
fine particles while there is no proof that PLA causes safety risks. Solutions to the
problem suggest that 3D printing with ABS should be done in a well-ventilated
environment or under a fume hood.23
 Issues with 3D printing to our society is that it is not intuitive, there is a lack of material
inputs, and the objects printed are those that are not useful to one’s daily functions.
Consumers that do not have technological expertise and some exposure to Computer-
aided design will have a difficult learning curve in the future. At the same time, 3D
printing is not Multilanguage compatible, which decreases its social integration
worldwide. Finally, 3D printing is a slow process that can takes hours or even days
depending on the size of the object and is not expected to speed up anytime soon because
of how fast materials like ABS and PLY can extrude before the object’s quality is
compromised. Finally, the open-source library of printable objects on the internet do not
have an essential influence on daily lives while the pieces that are used to assemble
products such as screws, gaskets, and springs are not printed. This could be a threat to
that the desktop 3D printer will not have a drastically positive influence on society and
households.24
d.) Legal/Political/Regulatory
Opportunities
 A key patent expiration of the 3D printing technology known as laser sintering is set to
expire in February of 2014. A major implication of this expiration is lower cost of
currently expensive industrial-grade laser-sintering printers. Expectations suggest the
price drop will occur upon entrance of both Chinese 3D printing manufacturers and key
domestic competitors. One of the major benefits of this expiration is the laser sintering
technology creates finished products that can be sold easier as opposed to the current
desktop 3D printer that cannot print out the exact requested model for mass production.
Utilizing Shapeway(online 3D printing marketplace), delivery for a finished product
takes up to two weeks while 3D system’s models, which are used by Shapeway, take up
to 12-18 weeks. This is due to the fact that these companies couldn’t obtain laser
23 Shead, . Techworld, "Scientists warn of 3D printing health effects as tech hits high street."
Last modified July 26, 2013.
24 Johnson, CBS Money Watch, "3D printing: Don't believe the hype." Last modified June 21,
2013.

12. 11
sintering printers. The February expiration of the laser sintering patent should reduce
ultimately reduce delivery time and promote mass customization.25
 According to Olliclop, iphone accessory maker,
3D printing is actually the best way for them to
avoid counterfeiting and preserve trade secrets.
Olloclip is a California-based company that
creates a snap-on camera for iphones that is
widely popular. The company invested 50,000
in 3D printing for prototyping purposes and a
faster production process as new iPhone hit the
market. Olloclip’s speed to the market is
essential upon release of a new iPhone. As a
result, the company’s biggest challenge is
fending off Chinese counterfeiters that make
low-quality Olloclips and attempt to compete
in the iPhone market. CEO Patrick O’Neill
suggests that prototyping done using 3D
printing allows them to safeguard their
Computer-Aided-Design files in-house. This is
contrary to the method of having prototype
samples created in rapid prototyping service
bureaus, which are more likely to reveal
blueprints to the public. In this context, 3D
printers may not be effective for enforcing
trademarks but are certainly instrumental in
protecting trade secrets.26
Threats
 Intellectual property theft is a multinational issue. The U.S. alone has over $300 billion in
intellectual property stolen annually. Most of the intellectual property theft globally will
be attributable to automotive parts, toys, and consumer products amounting to $15 billion
dollars by 2016.27 3D printing implicates intellectual property issues such as copyright
over 3D printed design, replication of patented objects, or unauthorized trademarks
appearing on 3D printed items. To counteract the potentially criminal behavior,
manufacturers will continue to lobby to strengthen IP laws and enforce the laws similar to
the way digitized content is. The major issue at hand is that government intervention has
25 Scott, . www.3ders.org, "3D printing will take off soon as key patents expire in 2014." Last
modified July 22, 2013. Accessed November 9, 2013.
26 Banwatt, . 3D printing law blog, "Trade Secrets – 3D Printers can actually help PREVENT
counterfeiting! ." Last modified March 15, 2013. Accessed November 9, 2013
27 McNee, . Gartner Research, "Predicts 2014: The Materialization and Dematerialization of
Print." Last modified November 19, 2013. Accessed November 19, 2013.

13. 12
its limitations as users can pirate content through torrents while avoiding detection all
together.28
 In order for intellectual property concerning 3D printed items to be marketed on an
exchange, buyers must go through multiple levels of copyright ownership across CAD
(Computer-Aided Design) files and the printer’s management software. This could create
obstacles in the exchange transactions because transparency of necessary rights and
dependable distribution of licensing fees to both counterparties. Another issue related to
the exchange of intellectual property includes issues regarding which party possesses
legal detriment upon the sale of a CAD file that is defective.29
e.) Technology
Opportunities
 Additive manufacturing covers a wide array of 3D printing technology applications and
consists of the joining of material progressively to create finished objects. This approach
is more resourceful and efficient for low-volume production processes because expensive
specialized tools aren’t necessary. The 3D printed parts market, which is driven largely
by the wider range of AM industrial
applications, is expected to grow to $8.4
billion by 2012. This includes the
possibility of creating finished items
from titanium or nickel super alloys,
which shows AM’s application in
manufacturing precise metallic items.
Also, the recently created playable violin
produced from polyether ketone ketone
thermoplastic shows AM’s
manufacturing capability in aerospace-
grade polymers. 30
 The additive manufacturing industry is expected to reach $3.5 billion by 2017 with a
compounded annual growth rate of 13.5%.31 The three major laser-based additive
manufacturing techniques include Selective Laser Sintering, Laser Engineered Net
28 Lawrence, . Electronic Frontiers, "3D Printing: legal and regulatory issues." Last modified
August 8, 2013. Accessed November 9, 2013.
29 Merian, . Computerworld, "Will 3D printing kill IP?." Last modified September 19, 2013.
Accessed November 9, 2013.
30 Hayes, . Optonics and Photonics, "The future of 3D printing." Last modified July 2013.
Accessed November 9, 2013.
31 Bloomberg, . PR Newswire, "Global Additive Manufacturing Market (2012 - 2017)." Last
modified November 21, 2012. Accessed November 9, 2013.

14. 13
Shaping, and Stereolithography. This technological advancement includes the
introduction of ytterbium-dober fiber lasers, which involves the use of high-power and
quality beams to create finished products with good physical properties and surface finish.
According to Electro Optical Systems, these lasers were revolutionary change in
production technology. Stereolithography is attractive to company manufacturing
processes as it increases product development speed and allows for the manufacturing of
multiple designs at a time with high accuracy. Laser Engineered Net Shaping is the most
plausible technology for manufacturing as the parts obtain similar density to the metal
that utilized to fabricate it. Selective Laser Sintering, which is a powder-based layering
process for building parts, processes accurate products with tolerances of .05 to .25 mm
and allows for less post processing.32
 Two technologies that are set generate breakthroughs in high resolution parts with metal
include two-photon laser curing and the femtosecond laser. Two-photon laser curing will
allow fabricators to achieve sufficient density and precision through simultaneous
absorption of two photons. Femtosecond lasers, which is utilized in corrective eye
surgery is now being applied to 3D printing. This technology is currently costly but
essentially provides a low-power laser the ability to fuse metal with pulse compression,
which involves the squeezing of large amounts of optical energy into short pulses.33
Threats
 2012 NAS reports indicated that there are significant barriers on the photonic side of
additive manufacturing in resolution limitations attributable to laser wavelength. The
biggest challenge faced for companies using AM technology is generating acceptable
productivity levels while balancing the cost of raw materials in production. Laser-based
AM is still a fairly expensive commodity as compared to traditional manufacturing
technology.34
 Additive manufacturing processes lack process consistency and operating efficiency with
lack of control over process variables, variation in material supply chain, and additional
post-processing in surface finishing to meet unique product specification. Also, high
powered lasers ends ups producing poorer quality products than what is expected from
end-consumers.35
 Another threat to viability of 3D printing in the consumer market includes strength,
surface finish, speed, usability, and the difficulty CAD (Computer Aided Design). 3D
printed parts lack strength compared to products that are traditionally manufactured,
especially because there is a stronger bond between the X and Y planes of the product
32 Hayes, . Optonics and Photonics, "The future of 3D printing." Last modified July 2013.
Accessed November 9, 2013.
33 Hewitt, . Extremetech, "3D printing with metal: The final frontier of additive manufacturing."
Last modified December 27, 2012. Accessed November 9, 2013.
34 Hayes, . Optonics and Photonics, "The future of 3D printing." Last modified July 2013.
Accessed November 9, 2013.
35 IBID

15. 14
rather than the Z axis during the layering process. For the consumer, it is also difficult to
gain a smooth surface finish of the product utilizing plastic materials. Also, the process of
printing materials with complex chemical properties can only extrude at a certain rate
before compromising the integrity of the product. Finally, the 3D printing process is not
intuitive as consumers, hobbyists, and entrepreneurs would have a difficult time utilizing
Computer-Aided design models, which is an essential pre-printing process. The
preceding factors could continue to threaten the 3D printing industry’s penetration into
the consumer market.36
f.) Natural
Opportunities
 According to a study at Michigan Technological University, 3D printing utilizes less
energy and emits small amounts of carbon dioxide into the atmosphere. The study was
done to compare entry of a product into US from being manufactured overseas versus 3D
printing it domestically. Results indicated that creating items on a 3D printer uses 41 to
64 % less energy than producing it in a factory and shipping from outside of the US. This
is due to the use of less raw materials and the potential requirement of less amounts of
plastic filament. Recycling postconsumer products into filament for 3D printing is done
using RecycleBots, further reducing costs and negative environmental impact.37
 The study also
concluded that
the solar-
powered 3D
printers would
have less of
an
environmental
impact
because of the
lower energy
requirement.
Traditional
manufacturing
higher
36 Allen, . Gizmodo, "Why 3D Printing Is Overhyped (I Should Know, I Do It For a Living)." Last
modified May 17, 2013.
37 Megan Kreiger, Joshua M. Pearce, Environmental Life Cycle Analysis of Distributed Three-
Dimensional Printing and Conventional Manufacturing of Polymer Products

16. 15
amounts of PV (photovoltaic) because of the energy necessary for mass production and
the storage essential to continuous operation. Traditional manufacturing processes
automatically leads to more energy use associated with cement and metal ground
mounted racking. Also, 3D printed, which is a form of distributed manufacturing, would
generally occur during the day, when photovoltaic power is available without storage
while centralized manufacturing is continuous.38
Threats
 Part of the study at the Michigan Technological University also compared plastic
filament used in common 3D printing methods such as polylactic acid, which is an
ingredient made from renewable resources, and ABS(Acrylonitrile Butadiene Styrene), a
filament that requires higher temperatures for the print bed and the extrusion process.
Results in this experiment demonstrated the impact of ABS based 3D printers are less
environmentally friendly. Solutions to this issue would be for companies to print ABS on
acrylic and PLA on surfaces covered with blue painters tape with no heating necessary.
These techniques solve the heating issues, which would lower energy utilization and
further impact on the environment. When printing two blocks simultaneously under the
same conditions and settings as a single block made out of PLA at 10% fill under
conventional electricity, there was an energy savings of 4%and an emission reduction of
5% over printing a single block.39
 A group of Technophilic environmentalists conducted a study assessing the
environmental impacts of two 3D printers and the CNC mill. The results of the study
show that the
FDM printer
had the
smallest impact
on the
environment
and half the
impact of the
3D inkjet
printer, which
had 1/3 less of
an impact than
the CNC mill.
All of these methods scored worse for environmental impact than injection molding,
which is most commonly used for mass manufacturing of plastic parts. This is based on
energy utilization and electricity use, which is function of how much time the machines
38 IBID
39 IBID

17. 16
are running for. Conclusion of the experiment is that FDM printing is the only form of
3D printing that is considered mildly environmentally friendly.40
g.) Global
Opportunities
 Globally, Manufacturing makes a
17% contribution to the world’s
60 trillion dollar economy.
Therefore, 10% of global
manufacturers have to adopt 3D
printing technology in order for
the industry to be considered a 1
trillion dollar market. At the same
time, sales of 3D printing
products and services has the
capability to reach $6.5 billion
dollars by 2019. The additive
manufacturing industry is
expected to see a CAGR above
20% over the next several years
based on historical averages. Examples of companies utilizing 3D printing in their
manufacturing processes include Nike, which has reported both cost and lead time
reduction of 58% and 92%. Also, in addition to corporations improving their product line,
they will be more likely to create all of their products in-house rather than outsourcing
their production to those without expertise in this area. 4142
 In 2012, the majority of 3D printing
market share was held by the
Americas at 46% due to the
overwhelming amount of automotive
manufacturing and consumer
product manufacturing companies.
Also, demand in Americas is
experiencing growth attributable to
the medical field through tissue
engineering and implant surgeries.
40 Faludi, . Greenbiz, "Is 3D printing an environmental win? ." Last modified July 19, 2013.
Accessed November 9, 2013.
41 Wagriech, . "3D Printing: Everything You Need to Know." Last modified 2013. Accessed
November 5, 2013.
42 Wohlers Associates, . HV3D, "The Economics of 3D Printing." Accessed November 5, 2013.

18. 17
Technavio’s research indicates that the 3D printing market in the EMEA region is
expected to grow at a 2.8% CAGR from 2011-2015. The market in this region will
expand as the demand for AIO (all-in-one) printers materialize. Top-line growth in EME
is largely focused on demand in Germany, Italy, France, and the UK. New developments
for 3D printing in the APAC region have unfolded as application in the automotive
industry becomes widely adopted. The Singapore government still subsidizes the “Future
of Manufacturing” program, which involves a $500 million investment and a 5 year
initiative to drive advanced manufacturing technology forward.4344
Threats
 3D printing is one of the larger growth industries in China. 3D printing allows China to
apply its mass production strategies to a broader range of sectors in multiple regions. The
low cost manufacturing capability along with 3D printing may stop domestic jobs from
being outsourced abroad due to faster production time and design capabilities of 3D
printers in the US. This is not been a significant threat as the Americas were first to the
Global 3D printing market and China is looking to adapt or resolve issues with existing
3D printers.45
General Environment Red Thread: The 3D printing industry reveals opportunities through
technological advancements, a wide diversity of demographics that have unique 3D
printing applications, and the expiration of key selective lasersintering technologies in
February of 2014. Looming threats in the 3D printing external environment include
intellectual property theft, environmental impacts of plastic filaments, and affordability of
desktop 3D printers.
A) Competitive Environment
a. Industry Structure-Tight Undifferentiated Oligopoly
The 3D printing industry mainly provides both industrial manufacturing, personal desktop 3D
printers, and materials market. Buyers in the 3D printing industry will be mostly driven by
Automotive, Medical, and Aerospace applications, which is expected to account for 84% of the
entire market by 2025.46 The hobbyist, artist, educational institutions, consumer, and enterprise
demographic will mainly be driven by 20-30% lower price points and improved functionality in
43 3ders.org, "Stratasys opens Singapore office to meet rising 3D printing demand in Asia." Last
modified October 1, 2013. Accessed November 10, 2013.
44 Roy, . Technavio, "TechNavio Report on Global 3D Printer Market finds US to be the Leading
Country." Last modified 2013. Accessed November 10, 2013.
45Wnjing, . CCTV, "World's first 3D printing conference begins in Beijing." Last modified October
25, 2013. Accessed November 10, 2013.
46 Lux Reasearch, "Automotive, Healthcare and Aerospace Industry: 3D Printing to be $8.4
Billion Market by 2025." Last modified 2013. Accessed November 3, 2013.

19. 18
3D printing technology over the last 3 years.47 Industrial application are geared towards part
fabrication that is essential to the manufacturing of equipment or machinery that are expensive
and timely to produce. The hobbyist and consumer market design products usually from open
source libraries on the internet for creative use and rapid prototyping capability.
Other Miscellaneous
Hardware Industry
Classification(CCB)
Market Share(%
of Industry
Revenue)
Total
Revenue(in
millions)
Market
Cap(% of
Industry)
Market
Cap(In
millions)
Total Industry Revenue 100% 800 100.00% 15822.92
SSYS 26.91% 215.24 30.65% 4850
DDD 44.20% 353.63 50.62% 8010
EXONE Co 1.91% 15.29 5.60% 886.81
Orgonavo(Fab Metal and
Hardware)
0.15% 1.2 4.53% 716.11
Proto Labs(Fab Metal and
Hardware)
15.75% 125.99 8.60% 1360
48
Based on our comparables analysis, the 3D printing industry is a tight undifferentiated oligopoly
because it has 3 firms that dominate the majority of the industry with a market concentration of
86.86%.49 This can be mainly attributable to 3D systems and Stratasys, who dominate the
majority of the market with 71.11%. Oligopolistic industries usually have moderate to high
barriers to entry and a small number of firms dominating the industry. Both Stratasys and 3D
System’s market segments include print materials, 3D printers, and 3D printing services. Based
on quality and price, Stratasys and 3D systems continue to compete for market share in a
growing consumer market with CubeX and Makerbot Replica 2x, which Statasys recently
acquired on June 19, 2013. ExOne’s applications are mainly geared towards engineers looking to
produce parts and rapid prototypes with the help of ExMicro Orion machine. ExOne is mildly
different than other companies within the industry because it markets its products to the energy,
oil, and gas industry. ExOne allows for the CAD production of sand molds, cores, or entire core,
in which the ability to customize these types of tooling provides cost efficiency, accuracy, and
timeliness for this commercial application. One the other hand, Proto Labs and Organavo remain
under the fab metal and hardware industry classification, but still is considered a form of additive
manufacturing and, therefore, a member of this peer industry group. Protolabs major market
segments lie in its legacy protomold plastic injection molded parts and its Firscut CNC machine
servicing. The applications of these technologies are mainly geared towards the entire market
including both industrial and consumer applications with their ability to fabricate metal and
improve design capability through plastic injection molding. Orgonovo’s niche segmentation is
mainly geared towards the fabrication of human tissue and therapeutic applications, which
47 Basiliere, Halpern. Gartner Research, "Use the Gartner Business Model Framework to
Determine the Impact of 3D Printing." Accessed November 3, 2013.
48 Bloomberg Terminals
49 IBID

20. 19
represents a strong opportunity as 3D printing medical applications are expected to grow to $1.9
billion by 2015.50
b.) Industry Life Cycle-Rapid Growth Phase
3D printing began in 1984 through the
innovation of the industry’s pioneer,
Charles Hull, who utilized
stereolithography technology to digitally
fabricate the first 3D printed object.
Essentially, users would create a design
arrangement that is amended until
ultimately printed into a final product.
Following this invention, the first SLA
(Stereolithographic Apparatus) was
created by 3D systems, which paved the
way for the adoption of 3D printing for
multiple applications. This includes the
first 3D printed organs in 2002 and the first selective laser sintering technology utilized for
industrial purposes and mass customization in 2006. Around the same era, 3D systems created
Objet, which was the first machine developed to print multiple materials at a time.51
This chart represents the Do-It-Yourself 3D
printing market. Further dissection of the cost
structure in the 3D printing industry shows
that significant customer demand and
continued applications into the consumer
market have increased because of the
significant technological advancements that
have driven costs downward. For competing
companies, this creates significant amounts
of demand and jockeying for market position.
For example, the key patent expiration of
low-cost printing technology in laser
sintering will unleash competition in the
50 Lux Reasearch, "Automotive, Healthcare and Aerospace Industry: 3D Printing to be $8.4
Billion Market by 2025." Last modified 2013. Accessed November 3, 2013.
51 T Rowe Price , "A BRIEF HISTORY OF 3D PRINTING." Last modified 2013. Accessed November
13, 2013.

21. 20
market and allow 3D manufacturers to lower prices to end consumers. Also, this technology is
meant to revolutionize design and functionality of 3D printed consumer products.52
Another factor that characterizes
growth in the 3D printing industry
is the drastic sales growth and
gross margins over the last few
years. 3 of the main 3D printing
companies including Stratasys,
3D systems, and ExOne now have
gross margins that are close to
50%.53 Entering the growth phase,
higher gross margins will allow
the companies to compete by
investing those gross profits into
operating expenses such as R&D,
which has a significant influence
on the 3D printing industry’s ability to create new patented technology while increasing market
share in both the 3D printer and materials segments. As the demand for 3D printers materialize,
new companies will emerge to compete and specialize in the materials segment, which makes up
10% of the global market share.54 According to Gartner research, Consumer and Enterprise 3D
printing shipments will grow 49% to approximately 56,000 unit with consumer spending and
enterprise spending to reach $738 million dollars in 2013.55 In correlation with demand by the
consumer, the materials market is expected to reach a value of $600 million by 2025.56
According to Wohler’s associates, the 3D printing market is worth now 2.2 billion dollars
worldwide and expected to grow to $8.4 billion with a CAGR of 23% by 2020. As a part of the
growth phase, companies continue to invest in production capacity.57 For example, Stratasys
recently bought a 90,000 square foot building to double their production capacity while
52 Christopher, Mims. Additive Manufacturing, "3D printing will explode in 2014, thanks to the
expiration of key patents,." Last modified July 21, 2013. Accessed October 1, 2013.
53 Seeking Alpha , " 3D Printing: Improving Margins Lowers Material Costs ." Last modified 2013.
Accessed November 13, 2013. 3D Printing: Improving Margins Lowers Material Costs. Accessed
November 13,2013.
54IBID
55 Lomas, . Gartner Research, "The Much-Hyped 3D Printer Market Is Entering A New Growth
Phase, Says Gartner." Last modified 2013. Accessed November 13, 2013.
56 IDTechX, . 3Ders.org, "3D printing materials market will be worth more than $600m by 2025."
Accessed November 13, 2013.
57 Staff, . MarketsandMarkets Research, "3D printing market worth $8.41 billion by 2020." Last
modified 2013. Accessed November 13, 2013.

22. 21
streamlining shipping and warehouse operations.58 Within the industry, there has also been a
significant amount of strategic mergers in order to facilitate the growth in particular segments for
some of the larger companies such as Stratasys and 3D systems. Over the summer, Stratasys
acquired Makerbot in order to increase their presence in the consumer 3D printing market while
3D systems acquired TeamPlatform, which is a collaborative design and project management
platform. Also characteristic of an industry in its growth phase include companies that are
developing marketing efforts in order to build brand awareness. Stratasys demonstrates this
ability in its annual Extreme Redesign 3D Printing Challenge, in which winners of this
computer-aided design competition win scholarship funds for designing or redesigning a product
that influences the way a task is accomplished.59 Finally, funding within the industry represents
growth features companies such as Shapeway recently attracted $30 million in venture capital
funding and Voxeljet filed for a $100 million Initial Public Offering.6061
c.) Porter Five Forces
Buying Power-Moderate to low
58 Glenn, Shane. Stratasys, "D Printer-Maker Stratasys Expands Production Capacity." Last
modified September 27, 2011. Accessed October 1, 2013.
59 Omastiak, . Minnpost, "Stratasys contest seeks 3D printing design ideas." Last modified
September 17, 2013. Accessed October 1, 2013.
60 Seeking Alpha, " With A Small 'v', 3-D Printing Company voxeljet Should Make A Big Splash On
The NYSE." Last modified October 2, 2013. Accessed October 1, 2013.
61 Scott, Crump. Stratasys, "Stratasys and Objet Geometries Announce Distribution Agreement."
Accessed October 1, 2013.

23. 22
3D printing is valuable to aerospace and automotive industries because it catalyzes the
production of lighter components and parts that are more complex. One can argue that buying
power for this buyer’s segment is diminishing because of the essential need that 3D printing
creates in manufacturing low-volume products that are highly customized. Buying power also
remains low for the medical and dental fields. In the medical field, innovation expands as
surgeons are now able to replicate and 3D print an exact patients body through use of an MRI or
CT scan, which allows for doctors to experiment or create new procedures on cadavers. 3D
printing also allows for customized dental implants, which caters specifically to particular
individuals. The hobbyist market is one that has moderate buying power because no consumer
3D printer has differentiated itself as this market remains a highly competitive market with 67
different start-up competitors. Current consumer 3D printers have low material variety in open
source libraries, remain highly priced, and have brought on health concerns from the fumes they
extract. The buyer power may change if the consumer 3D printing companies compete on price
following the laser sintering patent expiration, quality improves, and material inputs increase.62
Threats of New Entrants-Moderate to High
 There are several factors that are inherent to the threat of new entrants in a tight oligopoly,
which relate to advertising costs, excess capacity, reputation and warranties, product
bundling, and network effects. In a tight oligopoly such as the one experienced in the 3D
printing industry, several competing firms will invest above what is necessary in
advertising to build the awareness of its product and overcompensate for the disadvantage
new market entrants have in developing brand recognition. Currently, 3D systems and
Stratasys have been building brand awareness and have become distinguished among its
competitors. Therefore, new entrants and start-ups have to pay a high advertising fee for
entering into a market that is dominated by 2 companies that essentially created the 3D
printing industry with unique technology and have been building brand awareness since
the first 3D printers were manufactured.
 Currently, there is a key patent for laser sintering technology that is holding back
competitors from entering the 3D printing market, specifically in the consumer desktop
3D printing segment. Selective Laser Sintering, which was developed by Dr. Carl
Deckard in the mid-1980s, is the most efficient and cost-effective additive manufacturing
technique that new entrants in the 3D printing industry are looking to implement in the
consumer market. Capturing market share in this segment will be based primarily on
selective laser sintering’s key patent expiration taking place in February of 2013. The
expiration will allow consumer 3D printing manufacturers to produce 3D printers at a
lower cost and market them to households at a lower price point, which has been one of
the major barriers in this market segment.63
62 Kneissel, . IDTechEx, "3D Printing 2013-2025: Technologies, Markets, Players." Last modified
June 2013. Accessed November 11, 2013.
63 Lewis, . Industry Market Trends , "Selective Laser Sintering Patent Expiration Will Not Be a
Game Changer." Last modified September 4, 2013. Accessed November 3, 2013.

24. 23
 Recent developments such as the invention of Tim Elmore’s Filastruder has lowered the
cost of material filament by 60%. The average cost for a hobbyist to buy a single spool of
plastic filament costs in the range of $30-$50. He began a campaign on common crowd
funding platform Kickstarter and, within the first 2 weeks, raised $192,186 from 793
supporters. His Filastruder is an innovative technology that essential funnels plastic
pellets into a machine and heats them to a temperature that is adequate for the extrusion
process. This technology is revolutionary and can potentially create a niche for 3D
manufacturing competitors trying to compete in a tight oligopoly. This unique
development in lowering the cost of plastic filament can also bring new suppliers into the
market to supply pellets for the Filastruder, which is currently controlled by Open Source
printing.64
 Costs to startup a company is fairly significant when looking to enter into a tight
oligopoly. Makerbot, in particular, had to invest 75,000 into the first prototypes it
developed.65 Not only was it costly for Makerbot to develop what is now one of the top
desktop consumer 3D printer sold, but it took approximately 2 years from 2009-2011 to
introduce its first viable prototype to the marketplace. In conclusion, the cost to enter a
market where innovation drive growth is fairly high risk and requires a significant
amount of both time and capital investment. For new entrants, this notion is a difficult
barrier to overcome. Eventually, Foundry group decided to invest $10 million in
Makerbot’s development. 66
Bargaining Power of Customers-Low and Increasing
 Currently, the 3D printing market is dominated by 2 firms market with a total market
concentration of 71.11%. 3D systems and Stratasys are price setters and control the
quantity supplied to customers. The tight oligopoly in the 3D printing industry has some
duopolistic characteristics because the consumer market is mainly controlled by CubeX
and Makerbot, which are subsidiaries of 3D systems and Stratasys. As a result, these
companies can take advantage of higher pricing strategies because of the proprietary
patented technology both companies utilize in its legacy consumer printers. One can
argue that, once the key patent expiration for selective laser sintering expires in February
of 2014, customers will have increasing buying power as every competitor in the market
will have access to low-cost 3D printing technology. As a result, competitors will be
incentivized to price compete in order to gain market share along with growing
applications of 3D printing in the consumer market.67
64 Finnegan, Caitlyn . "3D Printing Kit Filastruder Raises Nearly $200,000 through Kickstarter
Campaign." Gainesville Business Report RSS. Accessed November 15, 2013
65 Anderson, . Engineering.com, "Prediction: Private 3D Printing Company MakerBot Won’t Be
Private Much Longer." Last modified June 17, 2013. Accessed November 20, 2013.
66 Feld, . Foundry Group , Last modified August 23, 2013. Accessed November 20, 2013.
67 Lewis, . Industry Market Trends , "Selective Laser Sintering Patent Expiration Will Not Be a
Game Changer." Last modified September 4, 2013. Accessed November 3, 2013.

25. 24
 Michigan technical university recently conducted a break-even analysis demonstrates that
3D printed products are becoming more value than purchasing through an online retailer,
directly from a manufacturer, or a third-party vendor. The studies show that a 3D printed
essentially pays for itself after the purchase of 20 items according to the results of their
MTU’s cost analysis. The studies compared 20 traditional household items 3D printed vs.
one bought on the internet and shipped to one’s home. Results showed that 20 items
would cost approximately 18 dollars utilizing 3D printing compared to a range of
anywhere from $312-$1,943. These studies show significant value to households in the
3D printing industry, which makes the product closer to a necessity and a key driver of
consumer demand. Also, there is an insignificant amount of alternatives to the high
quality printers available to customers outside of the popular CubeX and Makerbot.68
Threat of Substitutes-Low
 Current legal protection has also halted the marketing of innovative 3D printing
technologies. Both the preservation of trade secrets and patent protections on 3D printing
technology such as Laser Sintering and Fused Deposition Modeling have been the key
drives of a moderate and decreasing threat of substitutes in the 3D printing industry.
Currently, the majority of companies that use 3D printing in its manufacturing process
develop products in-house, which preserves trade secrets as CAD designs are not shared
with service centers for final production. Also, companies such as Stratasys and 3D
systems have massive patent portfolios on technologies that are revolutionary to the 3D
printing industry. As a result, companies are less likely to gain access to unique designs
or technology that can be replicated or substituted.
 Since the industry is in the growth stage of its industry life cycle, 3D printers still remain
a niche product rather than broadly adopted. Currently, many businesses rely on mass
manufacturing to drive down costs and maintain high gross margins. Due to current rate
at which 3D printing has been adopted worldwide, it is difficult to argue that there are
many substitutes for additive manufacturing because of the fact that traditional mass
manufacturing has not been surpassed. My belief is the catalyst for the adoption will be
driven by additive manufacturing when companies look to become innovative about
streamlining its current supply chain and reinventing there productions process. Right
now, demand has shown that large manufacturers are not ready to take this move.
Degree of Rivalry-High
The degree of rivalry among the 2 key competitors in Stratasys and 3D systems is fairly high.
Both companies control over 70% of the industry’s market share and operate in segments
focused on both industrial and consumer applications.69 3D systems continues to build out its
quick parts business while expanding in the EMEA and APAC regions and Stratasys continues to
utilize its large patent portfolio to drive sales in the consumer desktop 3D printing market. Also,
68 Goodrich, . Michigan Tech, "Make It Yourself and Save—a Lot—with 3D Printers." Last
modified November 14, 2013. Accessed November 20, 2013.
69 Refer to Industry Structure Chart

26. 25
3D systems continues to try to capture market share in a growing adoption of 3D printing in the
healthcare segment while Stratasys is focused on increasing its presence in the 3D printing
materials market. Another key influence that 3D systems is having on the consumer 3D printing
market is its introduction of the Sense 3D scanner, which was introduced to retail stores in
November of 2012. This represents an excellent cross-selling opportunity for 3D systems as
consumers now have access to 3D printed products in retail stores such as staples without having
an understanding computer-aided design. The result will be that consumers will have an idea of
the quality of products printed before they make the ultimate decision to purchase a desktop 3D
printer that is suitable for them. Consumers having the ability to scan items eliminates a
weakness in 3D systems in regards to how intuitive the 3D printing process is.
d.) Industry Attractiveness
The 3D printing industry is currently a tight undifferentiated oligopoly with duopolistic power in
the desktop consumer 3D printing market. The industry is currently growing in early maturity as
both 3D systems and Stratasys are making strategic acquisitions, building brand awareness, and
looking to capture key market segments throughout both industrial and consumer 3D printing
applications. Rivalry among both firms remains high as they attempt to keep new entrants out of
the 3D printing industry and position themselves in front of new technology and a growing
consumer market.
The attractiveness for new entrants to the industry remains low due to higher marketing costs,
current patents on key technologies, and high capital requirements. The market dynamics may
change to become attractive for new entrants when key technology patents expire going forward
and the market becomes more competitive in capturing market share from dominant companies
such as 3D systems and Stratasys.
The attractiveness for industry incumbents remain low. 3D systems and Stratasys have already
undergone the learning necessary in the early stages of the 3D printing industry to bring new
prototypes to the market. Unless a smaller market competitor is able to come up with a 3D
printing technology that lowers cost and increases printing quality, then the larger market
competitors already have the resources, technical expertise, and patent portfolios to appeal to the
majority of future 3D printing market segments.
The industry attractiveness for Stratasys (Makerbot) is high. Stratasys remains the number one
manufacturer of consumer 3D printers as the sales of Makerbot printers have accounted for over
25% of total consumer 3D printers sold. Stratasys also holds over 26% of the total market share
in the 3D printing industry, which is a market that is growing at approximately 23%. Stratasys is
poised to capture more market share through strategic acquisitions in addition to recent mergers
with Makerbot and Objet and positioning itself at the forefront of technological innovation.

27. 26
C.) Competitor Environment: The Players
a.) Strategic Group Analysis
 The strategic group analysis map above allows competitors within the 3D printing
industry to take action on separating itself from its most comparable 3D printer whether it
be for production, design, or consumer applications. Consumer printing lines are usually
cheaper and employ low-cost technology as affordability is an important concern among
buyers of desktop 3D printers. This closely influences the hobbyist market and
consumers looking to purchase printers to express creativity. 3D printers also cater to
industrial designers and rapid manufacturing techniques, which usually requires the use
of production grade printers that are capable of producing larger products and low-
volume parts. Also, 3D printing is utilized for enterprises, engineers, and educational
institutions in order to develop knowledge of CAD software, create prototypes, or
streamline a cost effective and efficient production process.70
 As seen above, personal/idea printers tend to be cheaper due to lower cost of technology
upon patent expirations in the past. This causes competitors to enter the 3D printing
market and supply its desktop printers at a lower price to compete with big companies
like Stratasys and 3D systems, which are companies that control the majority of market
70 Stratasys Main Website, Accessed November 20, 2013.

28. 27
share in the industry. On the other hand, industrial printers such as Stratasys’ Fortes
series and 3D System’s Z 150 printer are priced toward the $200,000 level. As noticed
above, Stratasys is diversified across the entire price range as it has a production series,
design series, and idea series. The diversification of Stratasys’ product mix is mainly due
to its acquisition of Objet and Makerbot industries, which broadened the company’s
technological expertise and 3D printing applications.71
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29. 28
b.) Key Success Factors
72
The following key success factors are going to have drastic influences on the desktop consumer
market going forward. The KSF’s are ranked from most important to least important according
to assumptions regarding consumer buying behavior. With a ranking of 3.3, 3D systems is
positioned favorably in the desktop consumer market over key competitors with its CubeX
model.
1. Accuracy & Model Resolution-The following represents the accuracy, surface finish, and
final resolution of the finished product compared to the original CAD design intended.
This is based on the quality score, which is based on observation of how well the product
is constructed. CubeX received a 100 quality score based on customer feedback, which
determines the ranking of 4 as a key success factor. Accuracy was weighed 20% because
of the previous complaints affiliated with quality and surface finish in desktop 3D
printers.73
2. Ease-of-use-This KSF is based on how intuitive the 3D printer is to operate as well as the
level of intellectual complication affiliated with its CAD design platform. Household
7210TopTenReviews, "2014 Best 3D Printer Reviews and Comparisons." Last modified 2013.
Accessed November 14, 2013.
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30. 29
consumers are often uninformed as to their capacity to learn CAD design from an expert
and, therefore, hold value in this feature in their decision regarding what type of printer is
best for them. 3D systems received an ease-of-use score of 100 based on the simplicity of
their product and feedback received from satisfied customers. Ease-of-use was weighed
20% because although CAD causes consumers difficulty, most of the applications in the
consumer market is determined by hobbyists and artists with a pre-existing foundation in
CAD.74
3. Price-This KSF determines the particular companies’ ability to bring in a particular
volume of buyers and compete for market share. Affiniah-Series 3D printer was ranked
the highest with a 4 because it is currently the lowest price point in the 3D printing
marketplace. Price was weighed at 20% similar to ease-of-use because the consumer
market is not very liquid right now and hasn’t gained much traction from buyers yet. Also,
lower price points is often the result of initial product creation using cheap raw materials
that compromise the products quality.75
4. Volume and Speed-Volume and Speed essentially determines the dimensional capacity
and time at which a product is printed. Stratasys’ Makerbot was given a ranking of 4
because its ability to print products that are 8.9x5.9x5.6 at a speed of 200 millimeters per
second, which is way faster than comparable consumer printers. Volume and Speed was
weighted at 20% similar to price and ease-of-use because consumers have demonstrated
that Makerbot is the most sold desktop 3D printer. One can conclude that this demand has
come from relative volume and speed.76
5. Help and Support-This refers to the warranty and communication support that keeps
customers satisfy beyond the initial sale of the 3D printer. Stratasys was given a ranking
of 4 in this KSF because it products a one year warranty along with continual support
throughout multiple communication channels. We weighted this KSF 10% due to the
belief that it holds some importance for customer retention.77
Results: CubeX has stronger key success factors
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31. 30
c.) Competitor Dynamics
Company Stratasys 3D Systems
Goals  Maintain global leadership in
Additive Manufacturing
 Continue to capture brand loyalty in
3D desktop consumer market under
their 7 existing brands through
improvements in affordability and
quality.
 Increased financial performance
through merger related revenue
synergies and projected tax savings
 Maintain industry leadership in content-to-
print 3D solutions while maintaining demand
geographically
 Position themselves at the forefront of a
competitive 3D industry with significant
technological advancements
 Enhance timeliness and affordability in their
traditional “replace and displace expertise
Assumptions Self
 Are leaders in proprietary
technology with 500 additive
manufacturing patents worldwide,
which includes FDM technologies
and utilization of Objet LTD’s
PolyJet technologies
 Offers broad range of products and
services, specifically in Additive
Manufacturing and rapid
prototyping
 Encourage customers to use DDM,
which provides quick and efficient
manufacturing process(tools,
fixtures, jigs, casts, and injection
molds)
Industry
 Traditional prototyping methods
include metal extrusion, manual
modeling techniques, and
computer-controlled machining
 Additive Manufacturing conquers
limitations in traditional modeling
technologies and enhances the
design process
 Customization through 3D printing
reducing lead time and cost in
traditional manufacturing process
 3D printing has evolved by
expanding its demographic and
finding new applications,
specifically in engineering and
design
Self
 Pioneered key technologies in
Stereolithography technology, Laser Sintering,
Multi-Jet Modeling, and Film Transfer
Imaging
 DDD additive layer printing satisfies customer
taste across production design and requirement
 Less volatile financial results
Industry
 3D printing caters to a broad range of function
and applications transforms traditional
manufacturing into more efficient digital
manufacturing processes
 3D printing reduces capital requirements for
tooling, mass production, and manufacturing
efficiency
 The broad ranged adoption of DDD services
are meant to cater to both professionals and
consumers alike
 Consumer 3D market may experience price
competition upon key patent expirations on
cost effective technologies
Capabilities Strengths
 Strategic acquisitions have made
Strengths
 2012 acquisition of Rapidform scan-to-CAD

32. 31
them AM industry leaders and well
positioned for the competition for
new technology utilization
 3D FDM and 3D inkjet-based
Polyjet printing engines offers
growth in potential applications
 Versatile Technological capability
in product line
 Diversified customer base across
multiple sectors
 260 distribution partnerships
globally
Weaknesses
 Lack of effective management and
ultimate material weakness in
internal controls
 Delayed realization of merger-
related value.
 Consumer printers are weak in ease-
of-use, accuracy and model
resolution, and price
 Market share-26.91% vs. DDD’s
44.20%78
reverse engineering, which integrates CAD
modeling, auto surfacing, faster production,
and better quality
 Maintains strong service revenue globally
through Quickparts initiative, which is a
multifunctional 3D printing system extended
into EMEA and APAC
 Financial Stability: 3 yr. EPS (+294.25%), 3
yr. Operating Income (+170.3%), 1 yr. FCF
(+100.75%)
 Leadership among 3D desktop printers among
key buyer considerations, specifically in print
volume, color options, environmental impact,
and print settings
Weaknesses
 Speed of consumer Cube X printer remains at
15 mm/s, which is slower Makerbot’s 200
mm/s
 Help and Support Services(90 day warranty vs.
1 yr. for Makerbot)79
 Owns only 10.8% of the revenues attributable
to Consumer 3D printing manufacturing vs.
Makerbot’s 25.5%80
Strategy  Maintain and grow range of 3D
printing consumable material,
which is currently the widest in
industry at 130
 Cross-sell new product lines to base
through increased marketing efforts,
which currently accounts for 260
resellers and salesmen globally
 Continue to catalyze demand
through adoption of lower capacity
entry level systems under their 7
existing brands through
improvements in affordability and
quality.
 Grow technology patent base
 Seek value generating vertical
acquisitions
 Increase affordability and quality for
applications in education, transportation,
recreation, healthcare, MCAD, architecture
and consumer marketplaces, which we believe
represent significant growth
 Expanding their business through expansion
into emerging market like India and China
potentially through partnerships and
acquisitions.81
 Make consumer 3D printer and CAD solutions
more intuitive to position themselves in front
of consumer demand
 Build brand loyalty
 Gain market share and growth in the healthcare
segment
 Develop Global custom-parts business
78 Bloomberg Terminals<GICS><FA>
79 IBID
80 3D Hubs, "3D Printing Trends November 2013." Last modified 2013. Accessed November 13,
2013.
81 Dingler, . University of Oregon Investment Group, "3D Systems Corporation." Last modified
2013. Accessed November 13, 2013.

33. 32
Satisfaction Satisfied
Stratasys remains satisfied with the
notion that 3D printing experiences
significant growth severalyears into the
future through the increase in design
capability and DDM applications. Main
drivers for SSYS include the
development of CAD content and
service along with both the development
of 3D scanners and further technological
innovation.
Somewhat Satisfied
3D systems maintains financial stability and
service revenue globally while the company plans
to gain more of the consumer totalmanufactured
3D printing sales, develop brand awareness, global
footprint, and both their healthcare applications and
custom parts businesses.
Next Move  Grow technology patent base
 Seek value generating vertical
acquisitions
 Gain market share and growth in the healthcare
segment
 Capitalize on growth in Global custom parts
business while building customer base
 Compete in desktop consumer 3D printing
market with continued lower prices to end-
users
Vulnerability  3D printing industry subject to
sporadic demand and constant
technological innovation
 Management of diverse and global
culture poses risk to vision
 Financial results subject to drastic
fluctuations as the industry remains
a niche adoption
 Product mix becoming skewed
towards lower margin and
profitability
 Reliance on third-party cross licensing
agreements with companies in the US for
unique technologies
 Integrating future acquisitions can potentially
deter management attention and disrupt key
businesses
 Large exposure to multiple geographic
segments
 Too much reliance on supply chain for raw
materials
Retaliation Stratasys seems to be the top
competitor as it maintains stronger
market share, proven industrial
applications, and continues to compete
in the consumer segment with the
acquisition of Makerbot and
technological innovation
3D systems will retaliate to Stratasys’
positioning by making their consumer product
more intuitive and faster. 3D systems also looks
to compete through lower pricing and global
expansion, which will increase their market
share.
82 83
Competitor Response Red Thread-Stratasys and 3D systems continue to battle to develop
market share and positioning in the consumer market as key patent expirations of laser sintering
technology drives down the cost of desktop 3D printers. 3D systems maintains an advantage in
the industry among key success factors regarding consumer preferences of its CubeX product.
3D systems will compete going forward by expanding its global custom parts business while
82 2013 Stratasys Annual Report. Accessed November 13, 2013
83 2013 3D Systems Annual Report. Accessed November 13, 2013

34. 33
Stratasys will try to grow technological patent portfolio through innovation and strategic vertical
acquisition. Overall, 3D systems remains the top competitor with 44.2% market share but
Statasys’ acquisition of Makerbot has rewarded the company with 25.5% of consumer 3D
printers sold.84
I. Internal Analysis
A) Nature of the Firm: Culture and Leadership
The culture of Stratasys and Makerbot is predicated on 3 values in particular, which are to make
robots that can create objects, to enhance design capability among all relevant applications, and
determine how the interaction between the customer and 3D printers can change the world.
Stratasys’ Makerbot products gained wide popularity based on its values regarding high powered
technology, ease of use,efficiency, affordability, and a do-it-yourself ethos. The culture of
Stratasys and Makerbot is synonymous with developing a technology that will undo the industrial
revolution, which is predicated on mass manufacturing while bringing forth a world where
machine tools are fabricated on desktop 3D printers.85
With Stratasys, Objet, and Makerbot as one
entity believe that innovation and unique vision regarding the multiple applications of 3D printing
will drive growth in the industry. At the same time, Stratasys looks to compete while maintaining
ethical business standards, a work environment that is open to creativity, and relentless work ethic.
The integration of unique company cultures while remaining positioned at the forefront of
multiple 3D printing market segments will be one of the main challenges for Stratasys following
the recent acquisitions. Regardless of the potential conflict, Stratasys seems poised to maintain its
dominant position in the industry due to recent changes in key leadership positions.
Key Leadership
a. Chairmen of the Board and Chief Innovation Officer: S. Scott Crump
S. Scott Crump is the pioneer of Fused Deposition Modeling
technology and wife of Lisa H. Crump, the co-founder of Stratasys,
Inc. Mr. Crump held severalroles throughout the company’s
development including Chief Executive Office, President, Treasurer,
and director of Stratasys since its 1988 inception. He also took on the
responsibility of Chief Financial Officer from February 1990 to May
1997 and remains in his current position as of 2013. His education
consists of a B.S. in engineering from Washington State University.86
84 Bloomberg<GICS>
85 The Conversation, "MakerBot seeks to undo the industrial revolution." Last modified October
27, 2013. Accessed November 20, 2013.
86 2013 Stratasys Annual Report. Accessed November 13, 2013

35. 34
b. Chairmen of the Executive Committee: Elchanan Jaglom
Mr. Jaglom’s early career primarily consisted of private
equity and venture capitalism focusing on growth companies in the
technology sector as he is the Chairmen of Diamond Capital
Management Ltd. He also continued his services as Chairmen of
Objet’s Board of Directors from 2001 until its merger with
Stratasys. Following the merger, he settled into his current position
as Stratasys’ Chairmen of the Executive Committee. Mr. Jaglom
graduated with a bachelor’s degree in economics and statistics
from the Hebrew University of Jerusalem and an M.B.A. from
NYU. 87
c. Chief Executive Officer: David Reis
David Reis has been his current position as Chief Executive officer
since March 2009 and was also a director for Objet from 2003 until
the close of the recent merger. Prior to his current experiences, he
held the CEO role at NUR Macro printers Ltd from 2006 until 2009.
Mr. Reis graduated with a B.A. in Economics and Management from
the IsraelInstitute of Technology and completed his Masters in
Business Administration from the University of Denver.88
d. Chief Financial Officer/ Chief Operating Officer:Erez Simha
Prior to his services with Stratasys,Mr. Simha was employed by
Orbotech, which is a company that develops automated optical
inspection systems and imaging solutions. He was promoted
within the company internally to obtain the role of Corporate
Vice President and Chief Financial Officer from July 2009 to
March 2011. Following his employment at Orbotech, Mr. Simha
joined Objet in November 2011 as Chief Financial and
Operations Officer. He has continued to hold this position
following the merger of Objet and Stratasys.89
87 2013 Stratasys Annual Report. Accessed November 13, 2013
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36. 35
90
90 Stratasys Capping Group, Bus_477, Section 113. Accessed November 15, 2013

37. 36
B) Organizational Structure
Stratasys’ Organizational includes Stratasys Ltd and its Israeli parent company as well as
wholly-owned subsidiaries including Stratasys, Inc., which was integrated as the result of a
merger. Stratasys, Inc. then acquired Solidscape Inc. in May 2011 in order to increase its
presence in high-precision 3D printing. Solidscape became an indirect wholly owned subsidiary
as a result of a 2012 merger with Objet, which includes Delaware-based Objet Geometries Inc.,
and Objet AP limited and Objet Shanghai Ltd, which represent a large portion of
Stratasys ’operations in the APAC region. The company infrastructure is moving towards global
expansion as it also consists of limited liability companies such as German-based Objet GMBH
and Stratasys GMBH along with Italian-based Technimold, which account for the majority of the
companies EMEA operations. Stratasys LTD also remains majority stakeholder of Japanese
company, Objet Japan Co., which represents their joint venture with 3D printer division Fasotec.
This corporate action further solidifies the relationship with key distribution networks in the
APAC region.91
The company currently utilizes a differentiating strategy through its merger with
companies who demonstrate expertise in multiple applications of 3D printing. Due to the
company’s nature, the organizational structure remains multidivisional as responsibilities are
doled out to lower level managers to keep daily operations sustainable. Right now, Stratasys
operates under seven different brands because of vertically integrated acquisitions, which causes
challenges to managers attempting to integrate multiple cultures and separate business entities.
Management has strategic controls in place to support its external opportunities with its expertise
across technology, marketing, product development, engineering, operations, customer service,
and human resources. Analysis of financial controls indicate that management has lacked the
ability to allocate capital resources towards projects or investments that have demonstrated
positive financial efficiency and return on equity. Since Stratasys is in its growth stages,
management will have to focus on its internal control of finance and operations in order to
created economic value added above its equity cost of capital. The multidivisional organizational
structure is currently the most useful for Stratasys as it has multiple subsidiaries that can be
compared by upper-level management to determine future allocations of resources.
C.) Value Chain
91 2013 Stratasys Annual Report. Accessed November 13, 2013

38. 37
Inbound Operations Outbound
Marketing and
Sales Service
Infrastructure
-Strong Leadership and Organizational Structure
-R&D and PP&E investment
-Systems Integration and Filament Manufacturing
Human
Resources
-Talent Acquisition -International Sales
Team
-Phone and Contact
us service
Technology
-ABS plus plastics
-FDM and 3D
inkjet
-Photopolymer
materials and
thermoplastics
-Recycling Centers
-Digital ABS
material
-Global Patent
Portfolio
-3D printing hubs -Website
-Social media
-User blogs
-Pay-per-click
advertising
-Search Engine
Optimization
-130 3D printing
materials
-500 certified
engineers
Procurement
-Idea Series(Mojo,
Uprint)
-Design
Series(Objet, Eden
and Connex)
-Production
Series(Fortis)
-Makerbot
-Objet
-Redeye Digital
-UPS
-Fedex
-Reseller
-Cloudfab,
Figureprints,and
Materialise
-IngramMicro
-Makerbot
Ecommerce
Platform
-Amazon
-MicrosoftRetail
-CAD training
-technical support
-repair and
maintenance
-Red-eye paid parts
PRIMARY
ACTIVITIES
-FDM
Thermoplastic
Materials
- Polyjet
Photopolymer
Materials
- Printer Hardware
-Concept Modeling
-Functional
Prototyping
-Manufacturing
Tooling
-End Use Parts
-Advanced
Applications and
Finishing
-Distribution
channels
-Retailers
-Intermediary
-International
Salesmen
-Multinational
Retailers
-Service Bureaus
-Press Releases
-Tradeshows
-Websites
-Brochures
-Channel
Partnerships
-Regional
Demonstrations
-Customer Support
-Warranty
-Training
-Leasing
Firm Infrastructure
 The company owns 4 buildings compromising 288,312 square feet compromising
executive offices and production facilities located in Eden Praririe, Minnesota and
Rehvot, Israel. The infrastructure further supports the assembly of systems, marketing,

39. 38
operations, storage, and manufacturing of RedEYE service, R&D, filament
manufacturing, and the enhancement of production capacity.92
 Overall, the infrastructure consists of desktop 3D printers being marketed and distributed
under 7 existing brands, which enhances the systems for product design and its rapid
prototyping segment, which further drives DDM (Direct Digital Manufacturing). The
infrastructure consists of 120 3D printing consumable materials, 1,100 employees, and a
global additive manufacturing patent portfolio of 500. Stratasys continues to build out an
installed foundation that will allow for them to capture demand in its Idea series of
products that remain at lower price points while targeting a market that includes large
organizations all the way to individual design teams. Stratasys continues to invest in
R&D in order to increase their proprietary technology platform and find new-user
applications along with introducing cross-selling opportunities in a growing materials
market.93
Inbound Logistics
Primary Activities
 Fused Deposition Modeling of thermoplastics, which has the main ABS particle but
ranges across plastics that are opaque standard, translucent standard, biocompatible
plastics, dissipative, and high-performance plastics. The specialized elements of these
plastics provide the proper functionality in aerospace, automotive, and medical industries
as they provide final products with tight engineering tolerance that perform well under
harsh environments.94
 Polyjet photopolymer-final products are printed with this source of material, which prints
layers concentrated to 16 microns to create designs with intricate dimensions and a
smooth surface finish. This proprietary technology provides the widest material variety,
which ranges from rubber to rigid, transparent to opaque, and standard to biocompatible
in order to cater to prototyping and DDM (Direct Digital Manufacturing) industries.95
 Printer Hardware ranges across Stratasys’ Idea series, Design Series, Performance Series,
Production Series, and Technology Series. The idea series includes entry level 3D
printers that are affordable and intuitive for household consumers. The design series is
geared towards solutions between design and engineering as far as visualizing design and
ultimately functionally testing the product for potential reengineering. The performance
series allows for in-house prototyping with 9 different color thermoplastics along with
optionality on resolution, print speed, and layer thickness. The production series mainly
92 2013 Stratasys Annual Report. Accessed November 13, 2013
93 IBID
94 Stratasys Main Website, Accessed November 20, 2013.
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40. 39
features printers with multiple material options that create accurate prototypes and
production-grade part through the use of high-performance plastics.96
Procurement
 The idea series product line consists of the Mojo, the UPrint SE Plus, and the uPrint SE.
The Mojo printer, which was recently released in May, is intuitive as it requires no
expertise in its functions while settings can be adjusted from a host computer. It also
includes Stratasys proprietary software, which accurately manages the efficiency and
processing of the final product. The Uprint SE Plus provides a 33% larger building
envelope over the Uprint SE and allows for the optionality of 7 additional colors. Both
Uprint models are utilized to form and fit prototypes while using its CatalystEX
software.97
 The design series is made up of both the precision and performance product line. Part of
the precision family includes the Objet brand desktop, Eden and Connex printers while
the performance family consists of Stratasys Dimension brand production systems. With
the Objet series, 3D printing can be applied to prototyping or desktop 3D printing with
high quality resolution and fine details. Connex and Eden serve a similar purpose but
Connex maintains a variety of applications while Eden printers have a more plausible use
in an office environment. The performance product line is made up of Dimension 1200es
and Dimension Elite, which is applicable to final products that require tough testing and
durability. The Dimension 1200es is more affordable while the Dimension Elite has the
most admirable resolution.98
 The production series addresses many applications in the DDM (Direct Digital
Manufacturing) market. The Fortus 900mc, which is the largest printer in this series
builds accurate and sturdy products up to 914x610x914 with 9 material options and more
than twice the throughput of the smallest printer in the series (Fortus 250mc). Specifically
in DDM applications, the Solidscape line is utilized for small parts production and
consumer electronics such as jewelry, mobile phones, and biomedical products.99
Technology
 The recent Mojo printer is driven by two technologies: its hands free cleaning system that
does not require any form of plumbing and the ABSplus plastic, which is significantly
stronger than typical ABS plastic used in the injection molding process. The development
of Stratasys ’proprietary FDM (Fused Deposition Modeling) and 3D inkjet-based Polyjet
printing has improved the desirability of hardware in quality and resolution.100
96 Stratasys Website, Accessed November 20, 2013.
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41. 40
 Not only does Stratasys provide highly demanded hardware in its inkjet printer heads and
extrusion heads, but also supplements these products with 100 proprietary inkjet-based
photopolymer materials and 10 proprietary FDM based thermoplastics. The Fortus
900mc utilizes ball-screw technology, which is helpful in increasing accuracy, positional
repeatability, and engineering tolerance. Stratasys’ Redeye encompasses Polyjet
Photopolymers, which includes 20 material choices, which spans from hard resins to soft
or flexible resins.101
Human Resources
 Itzik Arbesfeld is the Executive Vice President of Global Human Resources and she has a
career suitable for the industry to acquire the talent necessary to drive talent into Stratasys’
growth strategy. She previously led Objet human resources department since 2009, which
means she has the expertise that spans back to the infancy of 3D printing applications in
prototyping and desktop 3D printing. One of the main influences on Stratasys’ ability to
capture the consumer market and grow within the 3D printing industry include its ability
to acquire the top talent. Arbesfeld has the proper credentials to lead innovation and
technological advancement through managing future human capital needs.102
Operations
Primary Activities
 Concept Modeling involves the process of small designers and engineers representing
and developing ideas through multiple testing of finished products. This segment of
Stratasys’ operations is mostly applicable to building new architectural designs,
ergonomic studies, and graphic design because of the modeler’s ability to quickly convey
ideas to their colleagues. Architectural models make traditional models done on foam or
wood boards obsolete as architects can have a tangible understanding of how a building
would stand in 3D space. Ergonomic design is also an essential application to concept
modeling as it allows manufacturers to assess how consumers interact with a products
physical properties.103
 Functional Prototyping segment of its business appeals to production processes that
involve active in-house prototyping that allows quick response to changes in market
demand. This includes reengineering and improving products during early stages of the
design process. Production-grade thermoplastics and FDM (Fused Deposition Modeling)
allow for development of high-performance products that drastic mechanical and
chemical stress. Examples include dynamic friction coefficient, soft touch parts, and
surrogate parts.104
101 2013 Stratasys Annual Report. Accessed November 13, 2013
102 Stratasys Website, Accessed November 20, 2013.
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104 Stratasys Website, Accessed November 20, 2013.

42. 41
 Manufacturing Tooling operations apply to building manufacturing tooling in
thermoplastics like ULTEM 9085, which are production-grade and allow for incredible
engineering capability. Examples include the production of jigs, fixtures, and low-volume
production through FDM technology. Stratasys polyjet technology creates tool masters
that have demonstrated smooth surface finish and intricate detail.105
 End Use Parts operations consists of creating low-volume parts or products that are
durable, stable, and repeatable with original shapes and unique geometrical compositions.
This operational segment is useful for digital design manufacturing.106
 Advanced Applications and Finishing-these multiple operation segments allow for
complex finishing with smooth surface finish and advanced applications that allow for
the extrusion of curved and hollow composites through Fused Deposition Modeling.107
Procurement
 Recently, Makerbot, which is headquartered in Brooklyn, NY, became a public company
under Stratasys Ltd as a result of a merger on June 10, 2013. This reaffirms the purpose
of the company readjusting its corporate infrastructure and strategy to adjust to a growing
consumer market and solidify position across 3D printing desktop applications such as
engineering, architecture, industrial design, educational institutions, and household
hobbyists.108 This is following the strategic merge between Objet and Stratasys taking
place in December of 2012. The purpose was mainly to fuse Stratasys’ FDM printer,
which led in printing objects out of durable materials for desktop purposes with Objet,
pioneers of inkjet-styles 3D printers that focused on speed, surface finish, and the
incorporation of softer material.109
 Redeye Digital manufacturing service provides Polyjet technology that allows for the
development of flexible parts and conceptual modeling with the use of hard resin material
or soft and flexible material. The optionality of 20 materials adheres to both prototyping
and DDM (Direct Digital Manufacturing) needs.110
Technology
105 IBID
106 IBID
107 IBID
108 Howard, . Makerbot Website, "MakerBot and Stratasys Merger Closing." Last modified
August 15, 2013. Accessed November 20, 2013.
109 Hurst, . Wired, "3-D Printing Giants Stratasys and Objet Merge to Create $3 Billion Firm."
Last modified December 5, 2013. Accessed November 20, 2013.
110 Redeye demand Website, "Giving You More Than 3D Parts." Accessed November 20, 2013.

43. 42
 Recycling centers allow for Stratasys to offer products that have less of an environmental
impact during its operational logistics. This is one scenario in which core technologies
such as FDM and Polyjet can drive 3D printing’s green initiative as far as recycling
cartridges, canisters, and print engines.111
 As of November 5, 2013, Stratasys Ltd introduced its second generation Digital ABS
material intended for its Polyjet printers. The technological advancement allows for the
production thin-wall products with strong durability in every dimension and is now
available in an ivory color. Application include low-volume injection molding using
thermoplastics. 112
 Stratasys currently has a global additive manufacturing patent portfolio of 500, which
involves the company’s recent merger with Israeli-based Object. This acquisition will
allow Stratasys to increase its positioning within the market for multi-material printers
where Object remains dominant.113
Outbound Logistics
Primary Activities
 Stratasys utilizes multiple forms of outbound logistics through resellers, retailers,
international salesmen, distribution channels, and direct-to-consumer. Resellers consists
of experts in 3D printer with an understanding of CAD and basic 3D function who
purchase Stratasys’ products and sell them in the open market.114
 Another channel of distribution includes trained international salesmen employed by
Stratasys to consumers worldwide. These individuals are paid in commission fees for
each unit sold and provide additional post-sale servicing to their end-clients. Another
avenue in which consumers can purchase a 3D printer is directly from the manufacturer,
which involves the product being ordered on Stratasys website and ultimately delivering
that product to the consumer. 115
Procurement
 The majority of 3D printing shipments is controlled through UPS and Fedex.
Internationally, the final sale of products either directly through the manufacturer or
through a third party distribution channel, will be handled primarily by Fedex. On other
hand, domestic US shipments will be dominated by UPS.
111 Stratasys Website, Accessed November 20, 2013.
112 PR Newswire, "Stratasys Introduces Digital ABS High-Rigidity Material for its Polyjet 3D
Printers." Last modified November 5, 2013. Accessed November 20, 2013.
113 2013 Stratasys Annual Report. Accessed November 13, 2013
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44. 43
Marketingand Sales
Primary Activities
 By 2017, seven of the world’s top largest multinational retailers are going to sell 3D
printers through their physical or online stores. These retailers sell the individual printers,
the supplies, and the 3D printed pieces. Retailers can also add to product sales through
3D printing services that allow them to print deviations of stock items to cater to unique
customer product needs.116
 Part of Stratasys’ marketing and sales tactics focus on press releases, print advertisements,
trade magazine articles, direct mail and email, websites, brochures, tradeshows,
newsletters, industry associations and referrals. Throughout regional offices, Stratasys
holds demonstrations both globally and domestically of how 3D printers function to give
consumers more comfort in operating design software and developing a finished product.
Also, Stratasys has channel partnerships worldwide, which includes 260 resellers and
independent agents to expand global outreach.117
Procurement
 Some of the service bureaus applicable to the retailer distribution channel in the market
include Cloudfab, FigurePrints, and Materialise. Going forward, retailers can acquire
customer demand for the printers themselves by initiating the 3D printer service that will
allow them to access local demand.118
 Stratasys recently announced a national distribution agreement with Ingram Micro, which
allows legacy Makerbot products to gain access to domestic resellers. Ingram is globally
recognized as a wholesale technology distributor and maintains leadership in
international segments including IT supply chain, mobile device lifecycle, and logistics
solutions. Traditionally, Makerbot sells directly to consumers through its eCommerce
platform, New York City store, US Microsoft retail chains, and Amazon’s online
retailing website. Makerbot’s relationship with Ingram represents a large move to
develop brand recognition domestically.119
Technology
116 . Gartner Research, "How 3D Printing Disrupts Business and Creates New Opportunities."
Accessed November 3, 2013.
117 2013 Stratasys Annual Report. Accessed November 13, 2013
118 Gartner Research, "How 3D Printing Disrupts Business and Creates New Opportunities."
Accessed November 3, 2013.
119 Stratasys, "MakerBot Announces National Distribution Agreement with Ingram Micro." Last
modified October 10 , 2013. Accessed November 20, 2013.