In the following video, 3D printing specialist Steve Heller and Motley Fool industrials analyst Blake Bos discuss ExOne's (NASDAQ:XONE) recent strategy shift from focusing on selling its industrial 3D printers to foundries to selling them direct to customer.

Earlier this year, ExOne highlighted that metal foundries are proving to be reluctant to purchase its large-format sand-based 3D printers that print sand molds for industrial metal castings. It's possible the metal foundry industry is afraid that ExOne's 3D printers, which require zero tooling, would devalue the industry's trade secrets around mold making and tooling. Consequently, ExOne has shifted its growth strategy to now focus on going after the metal foundry industry's customers.

While this transition has hurt ExOne's operating performance in the short term, it could potentially result in a bigger market opportunity for the industrial-focused 3D printer company, because in aggregate, there are more foundry customers than there are foundries, meaning ExOne's opportunity to sell its sand-based 3D printers could be greater than if the company remained solely focused on serving the metal foundry industry.

To help aid in the transition, ExOne's eight existing service centers across North America, Europe, and Japan should help prospective customers get acquainted with ExOne's technology and machines before they make a purchase. By the end of 2015, ExOne intends to have 15 service centers in operation worldwide, which should help expand the presence of its brand and potential customer base.

Ultimately, ExOne is a niche-focused 3D printing company with only one direct competitor in the sand mold space: Germany-based voxeljet. Being a niche player could give ExOne an opportunity to establish itself as a leading company in the 3D-printed sand castings space, which could make it difficult for new competitors to penetrate the market. The 3D printing "majors" such as Stratasys and 3D Systems don't currently offer 3D-printed sand molds and are more focused on capitalizing on the general rise of 3D printing, whereas ExOne is focused on a specific segment in the market that it believes is underserved. This more focused strategy could help ExOne drive strong earnings results longer term, without the added pressure of increased competition.

Going forward, ExOne investors should acknowledge that as exciting as it is that the company is a niche-focused 3D printing company, it is not an investment free from risks. Year to date, shares have sold off around 65%, and the company has to prove that its strategy to focus directly on foundry customers will bear fruit, which may take years.  

A full transcript follows the video.

Blake Bos: Let's run through a few of the companies. We talked to ExOne. They do metals. It sounds like they have an interesting strategy. They're going after a niche market in foundries. They probably can't compete with the SLS [selective laser sintering] machines for aerospace. Do you like their strategy? Is it something that gets you excited?

Steve Heller: I do. It seems more disruptive to the existing way of business. Metal foundries, where people get investment castings made, have a lot of black-box secrets. ExOne takes away that mystery.

They print molds, so they have direct tooling -- no tooling required. Instead of using tooling, they just print the mold, and then they have the casting. That's pretty disruptive.

Bos: And the OEM owns the design.

Heller: Exactly, so instead of an OEM [original equipment manufacturer] -- let's say you're a company like Ford -- instead of going to a foundry that has all these trade secrets and charges you for those trade secrets, they go to ExOne and say, "Hey, we want to print a new engine block, a functioning engine block for an upcoming prototype engine for our new C-Max."

Bos: Out pops a big sand brick, boom. Engine.

Heller: Exactly. It's actually a bigger market when you think about it from an OEM perspective than a foundry perspective.

They recently shifted strategies a little bit, focusing on foundry. They found foundries weren't very receptive to their business. Now they're going direct to customers, and that's actually a bigger opportunity, long term.

Bos: Yes. I think it's a good opportunity for investors, but it is higher risk. We talked to them. It's going to take some time for that to play out.

Heller: I would say it's at least a five-year plan. I spoke to management. Their growth strategy is a three- to five-year plan right now. They're not even focused on the day-to-day. They're focusing on that long term, big picture.

Bos: As a Foolish investor...

Heller: Yes. Dollar-cost averaging, if you're interested in the stock.

Bos: Yes, but don't expect results overnight in ExOne.

Heller: Absolutely not. Especially given the recent underperformance, I think it's going to take time for the market to come around again in terms of sentiment improvements.