KEL194

ROBERT COOPER AND MARK JEFFERY

DuPont Tyvek®:
Commercializing a Disruptive Innovation

In 2000 DuPont’s Tyvek® weather-resistant membranes were protecting homes around the
world. Tyvek® offered unique properties to the construction industry: it was both water resistant
and vapor permeable—meaning it kept rain out of a home while letting moisture escape, thus
helping prevent mold, mildew, and other costly water damage.

Despite much international success, Tyvek® had struggled to make headway in the United
Kingdom’s construction market. As Tom Schuler, global business director for DuPont’s building
innovations team, remarked, “Our team in Europe pointed out that physics is global, but the
markets are local. Homes are built differently in every market, and it’s our job to understand and
adapt to those differences.”

A window of opportunity presented itself with the signing of the Kyoto Protocol in 1999. The
UK government had placed a new emphasis on energy efficiency, and Tyvek® had all the inherent
properties to offer a meaningful energy solution. The team knew it had a potentially disruptive
innovation on its hands; now it needed to determine how to bring it to market.

DuPont
DuPont was founded in 1802 by E. I. DuPont to manufacture and commercialize black
gunpowder in the United States. Over its two hundred years in business, the company produced a
constant stream of innovations in global markets as diverse as apparel, automotives, agriculture,
and construction. DuPont remained one of the world’s most innovative companies by consistently
pursuing its core mission:

To be the world’s most dynamic science company, creating sustainable solutions

essential to a better, safer, healthier life for people everywhere.1

In 2000 DuPont held science as its building block of value creation and was transitioning into
the third stage of its business development, from (1) explosives; to (2) chemistry and energy; to
(3) chemistry, biology, and nanotechnology.

1
DuPont Vision Statement, http://www2.dupont.com/Our_Company/en_US/glance/vision/index.html (accessed April 18, 2006).

©2006 by the Kellogg School of Management, Northwestern University. This case was prepared by Scott Buchanan ’06 in
collaboration with Robert Cooper, R. A. Cooper LLC, under the supervision of Professor Mark Jeffery. Cases are developed solely as
the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or
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 DUPONT TYVEK® KEL194

The safety and protection group, a $5 billion collection of businesses and one of DuPont’s
five major growth platforms, was responsible for the Tyvek® business. The core mission of this
group was:

To be the global market leader in safety and protection of people, property, operations,
and the environment by leveraging our knowledge, our science, and our safety heritage.

The safety and protection team settled on a set of project selection criteria to guide the future
business direction. The leaders specifically asked if the following could be accomplished:

• Can we capture value through unique science and functionalities?

• Can we leverage the strength of our brands?
• Can we manage the value chain?
• Can we deliver unique solutions to create value beyond the functionality of our
materials?
• Can we create value from our deep knowledge of end-user needs-based segmentation?

All new projects had to rate well on these criteria to continue through the pipeline to market.

Tyvek® Background
In 1955 DuPont engineer Jim White noticed white polyethylene fluff coming out of a pipe in
a company lab. By flash spinning the fluff fibers in a randomly distributed, nondirectional
manner, engineers produced a new, exceptionally strong material. The flash spinning process was
protected by trade secret since the resultant material had unique properties—it was vapor
permeable, yet was water, chemical, and tear resistant. DuPont branded the new fabric as Tyvek®
(see Exhibit 1).

The safety and protection team immediately began exploring applications for Tyvek®. It was
eventually introduced into packaging, protective apparel, envelopes, covers, graphics, and home
construction.

Tyvek®’s permeability made it extremely useful in the construction market. It was used as a
building envelope, wrapped around the frame of a building to allow moisture to escape while
preventing water/rain from penetrating. This helped mitigate the growth of mold and mildew
caused by condensation, thereby protecting homes and buildings from expensive water damage.

Tyvek® and the U.S. Construction Market

In the early 1980s Tyvek® was introduced into the U.S. market as an energy-efficient
building paper (see Exhibit 2). The initial market response was excellent. Over time the Tyvek®
team recognized an opportunity to expand Tyvek®’s potential by reframing the addressable
market space. According to Schuler:

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 KEL194 DUPONT TYVEK®

In the mid-1990s Tyvek® was primarily positioned as an “energy-efficient” product in

North America. When we went out and spoke to the market, we realized people were
buying Tyvek® for “water management.” So we reframed our definition of the U.S.
market and went from 70 percent share of the “energy-efficient” market to 25 percent of
the larger “water-management” market. We realized we had tremendous room to grow,
and the “water-management” platform drove our messaging and penetration in the U.S.
market.

The team’s next move was to drive the “water-management” message to market. To reach out
and connect with end users, the Tyvek® team worked with distributor partners to put together a
team of specialists (ex-builders, ex-roofers, etc.) who could translate Tyvek®’s features into
benefits and outcomes that mattered to the target audience. Exhibit 3 shows the strong Tyvek®
growth resulting from continually refining the product’s addressable market space and the
growing use of industry specialists.

The Tyvek® team learned how to work with the industry trades to deliver a product that met
market needs in the United States. Now they wanted to translate these experiences to grow
Tyvek® rapidly in the United Kingdom.

Tyvek® and “Cold Roofs” in the United Kingdom

DuPont’s initial success in Europe was in the roof, not the wall. Stone or block walls
precluded the use of Tyvek® in most systems, but most European houses included insulated attics
to extend living space. Tyvek® was included in this “warm” roofing system for the same water-
management and energy-efficient purposes that it served in U.S. wall systems. That trend applied
to most countries, but not the United Kingdom.

Most UK walls were stone, like those in the rest of Europe. However, UK roofing systems
were similar to U.S. systems in that the roofs were not insulated (or “cold”). In the “cold roof”
design, insulation is placed in the ceiling between the joists (as in a U.S. home) to retain heat in
the house. Bitumen felt is layered under the shingles (usually clay or slate) to keep water out.
Water vapor generated inside the home through normal use would be trapped in the cold roof
since the vapor could not permeate the bitumen felt roof liner. Cold temperatures in the roof
would condense the vapor to water, producing the potential for mold and other damage.

To avoid condensation and mold accumulation in buildings, construction firms crafted cold
roofs with vents on the ridge and sides of the roof that allowed for cross-ventilation and helped
moisture escape. See Exhibit 4 for an illustration.

Construction using cross-ventilation had become the norm in the UK construction market.
With the vents in place, there was no reason for builders to switch from bitumen felt to Tyvek®,
especially when Tyvek® was priced significantly higher than felt. Despite being two to five times
better at water holdout than felt, Tyvek® was an unnecessary expense in addressing the traditional
cold roof. The marketplace did not need, nor was it demanding, a more effective solution. As a
result, Tyvek® sales stagnated.

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 DUPONT TYVEK® KEL194

The Kyoto Protocol

In December 1997 representatives from more than 160 countries convened in Kyoto, Japan.
There, as part of the United Nations Framework Convention on Climate Change, these nations
developed the Kyoto Protocol, described as:

. . . an agreement under which industrialized countries will reduce their collective

emissions of greenhouse gases by 5.2 percent compared to the year 1990 (but note that,
compared to the emissions levels that would be expected by 2010 without the Protocol,
this target represents a 29 percent cut). The goal is to lower overall emissions from six
greenhouse gases—carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, HFCs,
and PFCs.2

On March 15, 1999, the Kyoto Protocol closed with signatures from 84 countries, including
the United Kingdom. Today more than 130 countries have ratified, or accepted, the treaty. See
Exhibit 5 for an excerpt from the Kyoto Protocol.

The UK government immediately began looking for opportunities to increase energy

efficiency and rapidly reduce carbon dioxide emissions. One area it focused on was the local
construction market.

A 1990 report suggested that construction and building use accounted for 30 percent of the
United Kingdom’s carbon dioxide emissions—the largest single source. That same report went on
to explain that approximately 30 percent of the building emissions came specifically from
residential housing (about 9 percent of total emissions). Drilling down further, 30 percent of this
energy loss was through the traditional cold roof. Thus, about 3 percent of the United Kingdom’s
total carbon dioxide emissions and energy loss was directly through the roofs of UK homes.

The Turning Point

The government targeted energy loss and emissions from residential homes as a potential
quick win in its quest to meet Kyoto’s standards; however, the government lacked the technology
to address the issue. The UK government threatened to fine utility companies and builders who
did not adhere to new emissions standards. This put pressure on both the government and
industry to find a solution. Local officials, also under pressure from the government, were
anxious to create new building codes if a viable system surfaced.

The key to increasing energy efficiency was minimizing the escape of unconditioned (heated
or cooled) air through the ceiling, and subsequently the roof. Fortunately, in Tyvek®, DuPont had
a solution that could transform the energy efficiency of cold roofs. As shown in Exhibit 6, the
new roof design was a closed system in which the Tyvek® layer common to the house allowed
water vapor to escape the interior and enhanced retention of heat in the house, while the Tyvek®
layers on the roof kept water out. Unlike the old system, the Tyvek® roof liner also allowed water
vapor to escape through the roof before condensation could form. Tyvek® thus enabled the
elimination of the vents, immediately improving a home’s energy efficiency. The new system not

2
United Nations Framework Convention on Climate Change, “Kyoto Protocol,” http://unfccc.int/resource/docs/convkp/kpeng.html
(accessed April 21, 2006).

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 KEL194 DUPONT TYVEK®

only simplified construction for the builder but also reduced the overall cost to the builder and
homeowner.

With the government’s interest and support, the timing was right to reintroduce Tyvek® to the
UK construction market. With the stars aligning, the European Tyvek® group knew it had to be
absolutely on the mark with this reintroduction. Reflecting on the situation, Schuler said:

There are four key elements of a product or offering that need to be understood and
distributed separately when you are serving any market. If you can understand how the
money, product, information, and influence are distributed, then you have a great chance
of being successful. You can’t always assume they go through the same channel. We knew
we needed to manage how these four elements were introduced into the UK
marketplace—we needed more clarity to create the optimum solution for the market.

The DuPont team also recognized that there were a couple of major barriers to success. For
one, although Tyvek® promised unique benefits, the team had to find a way to establish the value
proposition as credible. It needed the right people and messages supporting the product.

Perhaps an even bigger obstacle was the current value chain. See Exhibit 7 for a depiction of
Tyvek®’s value chain. DuPont was selling through a handful of installation distributors who
managed all downstream relationships. DuPont risked upsetting these powerful distributors if the
company could not tactfully find a way to connect with roofing merchants. The team needed to
manage the friction inherent in existing relationships while exploring new channels.

Diagnostic Tools: The I5nnovation Business Design and the

Innovation Radar Methodologies
DuPont’s European Tyvek® team had to devise a solution at the intersection of multiple
elements. Specifically: Whom should it target? How would it describe the offering’s value
proposition? Through what channels could it reach the key decision makers?

One diagnostic tool the safety and protection team turned to was the I5nnovation Business
Design methodology embodied in the market-driven growth process. See Exhibit 8 for the
I5nnovation Business Design methodology.

The Business Design methodology guided the team through three sequential steps: first, the
team segmented customers based on their desired outcomes. This helped the team identify key
customers outside the obvious building and roofing clientele. Second, the team had to create its
value proposition, linking customers’ desired outcomes to Tyvek® roofing system benefits.
Finally, having created value for its customers, the team needed to determine how to capture a
maximum portion of that value—whether through product form, distribution, pricing, or other
strategies. In taking the above steps, the I5nnovation Business Design Process acted as a road
map.

After thinking through the basic business design concept, the team had to create the entire
business system. It turned to the innovation radar (see Exhibit 9). Based on extensive research,3

3
Mohan Sawhney, Robert C. Wolcott, and Inigo Arroniz, “The 12 Different Ways for Companies to Innovate,” MIT Sloan
Management Review (Spring 2006): 75–81.

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 DUPONT TYVEK® KEL194

the perimeter of the radar was designed to call attention to all the issues relevant to bringing an
innovation to market. The spider graph starts with WHAT the product is (at twelve o’clock on the
radar), then works clockwise to clearly define WHO key customers are, HOW the product affects
the desired outcomes, and WHERE the product should be placed in market. The elements in the
radar comprise a complete business system—it transitions the business design into a business
system.

The driving idea behind the innovation radar is making certain that your approach to market
is integrated across the whole business system. The safety and protection team used such a tool to
identify strengths and weaknesses to determine where to build capabilities.

The Tyvek® Team Challenge

Entering the UK market presented both significant opportunities for revenue growth and
significant challenges. The team needed to first identify the critical customer segments. Once it
understood who would use Tyvek®, who would make the decision to buy it, and who was
invested in its success, the team could craft the value proposition.

Connecting with decision makers was crucial, and the team knew that to be credible it would
need to acknowledge the concerns of adopting new construction techniques using Tyvek®. The
team had to decide how to work with stakeholders to build a convincing argument for Tyvek®’s
efficacy.

The team also knew it had to work closely with each group of decision makers, educating
them on how to work with Tyvek®. This was no simple task. It needed to educate a huge user
base—literally hundreds of individuals and businesses, from architects to roofers—in a cost-
effective manner. The team needed a way to rapidly connect with user groups and deliver a
credible message about the Tyvek® product.

Finally, the Tyvek® team had to step back and consider how the current value chain affected
distribution of Tyvek®. According to Schuler, “When we took a look at the benefits that Tyvek®
offered the UK market, we realized our current distribution system simply could not support our
goals. We needed to educate decision makers on our technology, which meant working directly
with the end user.”

Because the window of opportunity to be first to market was rapidly closing, the European
team knew it needed to move fast. As Schuler explained, the team had to “understand how the
money, product and information, and influence are distributed.” Consequently, it sought answers
to three major questions: (1) How do we define the market opportunity (money)? (2) How do we
build a credible platform for the product (product)? And (3) how do we influence the value chain
to meet our needs (information and influence)?

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 KEL194 DUPONT TYVEK®

Exhibit 1: Tyvek® Properties

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 DUPONT TYVEK® KEL194

Exhibit 2: Tyvek® Building Envelope

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 KEL194 DUPONT TYVEK®

Exhibit 3: Tyvek®’s North American Growth—Expanding Addressable Market

Space and Increasing Use of Industry Specialists

700
Weather Weatherization
Air Barrier Barrier System
600

500
Index to 1992

400 Specialist
Addressable Market
DuPont Share
Sales
300 Starts

200

100

0
80

82

84

86

88

90

92

94

96

98

00

02
19

19

19

19

19

19

19

19

19

19

20

20

Exhibit 4: “Cold Roof” Design—Example of a Traditional Roof Design (Without

Tyvek®)
Fiberglass
insulation

#15 bitumen felt

Without Tyvek®, UK roofs had to include vents to allow

moisture to escape.

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 DUPONT TYVEK® KEL194

Exhibit 5: Kyoto Protocol Mandate (Excerpt from Article 3)

ARTICLE 3

1. The Parties included in Annex I shall, individually or jointly, ensure that their aggregate
anthropogenic carbon dioxide equivalent emissions of the greenhouse gases listed in Annex A do
not exceed their assigned amounts, calculated pursuant to their quantified emission limitation and
reduction commitments inscribed in Annex B and in accordance with the provisions of this
Article, with a view to reducing their overall emissions of such gases by at least 5 percent below
1990 levels in the commitment period 2008 to 2012.

2. Each Party included in Annex I shall, by 2005, have made demonstrable progress in achieving
its commitments under this Protocol.

Exhibit 6: “Cold Roof” Design—Example of a Roof with Tyvek®

Tyvek®
Diffusion
open
Vapor
Diffusion

Vapor
Heat

With Tyvek®, vapor can diffuse through the cold roof,

and with the absence of vents, heat stays in the home
while water stays out.

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 DUPONT TYVEK® KEL194

Exhibit 7: Tyvek® Current Value Chain in the UK

DuPont

Building Merchants = Roofing Merchants =

100% Distributor 0%

Distributors (3) Insulation Insulation Roofing Roofing

Distributor #1 Distributor #2 Distributor #1 Distributor #2

Retailers (500) Building Building Roofing Roofing

Merchant #1 Merchant #2 Merchant #1 Merchant #2

Roofing Roofing Roofing Roofing Roofing

Contractors Contractor #1 Contractor #2 Contractor #3 Contractor #4
(1000s)

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 DUPONT TYVEK® KEL194

Exhibit 8: I5nnovation Business Design Methodology

Value Customer
Capture Segmentation
Innovation Innovation
• Unit of Business •Target Customers
• Sustainability
Business • Desired Outcomes
Design
Innovation

Value
Proposition
I
• Product/Service nnovation (Functional)
I
• Demand nnovation (Economic and Emotive)

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 DUPONT TYVEK® KEL194

Exhibit 9: Innovation Radar

Offering – creating
new products and
services

Brand – leveraging the WHAT

customer connection Platform - exploiting commonality

Networking – exploiting network Solution – solving

intelligence complete problems

Presence – changing
where, when and how WHERE Customer – serving
WHO
customers access your firm future desired outcomes

Supply Chain – changing Customer Experience –

how you source and deliver redesigning the customer
interface/enhancing the experience
Organization – changing
form and function HOW Value Capture –
Process – changing how you get
changing how paid
you work

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