Nowadays, multinational corporations face the challenge of harnessing their local research and development activities (R&D) for the company as a whole. The heterogeneous organizational structure with its decentralized R&D-departments is a major obstacle in realizing synergy effects and blocks valuable resources. On the other hand, the heterogeneity of sales markets prevents centralized concepts. This framework requires strategic management decisions that concentrate innovation efforts on markets with the most promising demand and market conditions to develop a product design which evolves into the dominant design in global markets (Lead Markets). These far-reaching deliberation results need to be founded on thorough theoretical analysis. The goal of the current project was to translate findings from innovation research into solutions for R&D-specific questions. The Lead Market concept was further developed in the direction of applying it to functional clusters. The project was carried out in close cooperation with DaimlerChrysler Corporation. For each product category we conducted an exhaustive Lead Market analysis. The objective was to identify the specific category pilot market with the largest potential. The results show that a relatively small and stable group of countries exhibits the largest Lead Market potentials across all functional clusters.