Licensing Strategies of the New "intellectual Property Vendors" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Licensing Strategies of the New "intellectual Property Vendors"
This article explores the licensing strategies pursued by firms whose business model is based on developing and licensing out their intellectual property. These "intellectual property (IP) vendors" are not traditional suppliers, since they do not engage in production or commercialization, but specialize solely in the generation of IP. Considerable anecdotal evidence exists about these creative and enterprising firms. However, there has been no systematic investigation of how they use licensing to capture value from their IP. Our research indicates that their licensing strategies can be differentiated along two main dimensions. The first concerns the nature of the contractual relationship: whether the license stands alone or whether it is part of a larger package including other R&D collaborative agreements. The second concerns whether the technologies concerned are of high or low cumulativeness. These dimensions yield a typology outlining four different strategies IP vendors can use.
Swot Analysis of "Licensing Strategies of the New "intellectual Property Vendors"" written by Lee Davis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Licensing Ip facing as an external strategic factors. Some of the topics covered in Licensing Strategies of the New "intellectual Property Vendors" case study are - Strategic Management Strategies, Intellectual property and Organizational Development.
Some of the macro environment factors that can be used to understand the Licensing Strategies of the New "intellectual Property Vendors" casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, technology disruption, there is backlash against globalization, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Licensing Strategies of the New "intellectual Property Vendors"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Licensing Strategies of the New "intellectual Property Vendors" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Licensing Ip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Licensing Ip operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Licensing Strategies of the New "intellectual Property Vendors" can be done for the following purposes –
1. Strategic planning using facts provided in Licensing Strategies of the New "intellectual Property Vendors" case study
2. Improving business portfolio management of Licensing Ip
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Licensing Ip
Strengths Licensing Strategies of the New "intellectual Property Vendors" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Licensing Ip in Licensing Strategies of the New "intellectual Property Vendors" Harvard Business Review case study are -
Highly skilled collaborators
– Licensing Ip has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Licensing Strategies of the New "intellectual Property Vendors" HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Licensing Ip has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Licensing Strategies of the New "intellectual Property Vendors" Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Licensing Ip has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Licensing Strategies of the New "intellectual Property Vendors" Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Licensing Ip is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Licensing Ip is one of the leading recruiters in the industry. Managers in the Licensing Strategies of the New "intellectual Property Vendors" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Licensing Ip has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Licensing Strategies of the New "intellectual Property Vendors" - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Licensing Ip in the sector have low bargaining power. Licensing Strategies of the New "intellectual Property Vendors" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Licensing Ip to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Licensing Ip is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Licensing Ip is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Licensing Strategies of the New "intellectual Property Vendors" Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Licensing Ip is one of the most innovative firm in sector. Manager in Licensing Strategies of the New "intellectual Property Vendors" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Licensing Ip digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Licensing Ip has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– Licensing Ip is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lee Davis can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Licensing Strategies of the New "intellectual Property Vendors" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Licensing Strategies of the New "intellectual Property Vendors" are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Licensing Strategies of the New "intellectual Property Vendors", in the dynamic environment Licensing Ip has struggled to respond to the nimble upstart competition. Licensing Ip has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Licensing Ip has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Licensing Ip products
– To increase the profitability and margins on the products, Licensing Ip needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Licensing Ip is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Licensing Ip needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Licensing Ip to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Licensing Strategies of the New "intellectual Property Vendors" that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Licensing Strategies of the New "intellectual Property Vendors" can leverage the sales team experience to cultivate customer relationships as Licensing Ip is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Licensing Ip, firm in the HBR case study Licensing Strategies of the New "intellectual Property Vendors" needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Licensing Strategies of the New "intellectual Property Vendors" HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Licensing Ip has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Licensing Strategies of the New "intellectual Property Vendors", is just above the industry average. Licensing Ip needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Licensing Ip supply chain. Even after few cautionary changes mentioned in the HBR case study - Licensing Strategies of the New "intellectual Property Vendors", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Licensing Ip vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Licensing Ip has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Licensing Ip has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Licensing Ip even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Licensing Strategies of the New "intellectual Property Vendors" | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Licensing Strategies of the New "intellectual Property Vendors" are -
Better consumer reach
– The expansion of the 5G network will help Licensing Ip to increase its market reach. Licensing Ip will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Licensing Ip can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Licensing Ip to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Licensing Ip to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Licensing Ip has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Licensing Strategies of the New "intellectual Property Vendors" - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Licensing Ip to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Licensing Ip can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Licensing Ip to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Licensing Ip can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Licensing Strategies of the New "intellectual Property Vendors" suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Creating value in data economy
– The success of analytics program of Licensing Ip has opened avenues for new revenue streams for the organization in the industry. This can help Licensing Ip to build a more holistic ecosystem as suggested in the Licensing Strategies of the New "intellectual Property Vendors" case study. Licensing Ip can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Licensing Ip can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Licensing Ip is facing challenges because of the dominance of functional experts in the organization. Licensing Strategies of the New "intellectual Property Vendors" case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Licensing Ip can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Licensing Ip can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Licensing Ip can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Licensing Strategies of the New "intellectual Property Vendors" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Licensing Strategies of the New "intellectual Property Vendors" are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Licensing Ip in the Organizational Development sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Licensing Ip is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Licensing Ip with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Licensing Ip has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Licensing Ip needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Environmental challenges
– Licensing Ip needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Licensing Ip can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Licensing Ip will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Licensing Ip needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Licensing Ip can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Licensing Strategies of the New "intellectual Property Vendors" .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Licensing Ip high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Licensing Ip business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Licensing Ip in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Licensing Strategies of the New "intellectual Property Vendors" Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Licensing Strategies of the New "intellectual Property Vendors" needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Licensing Strategies of the New "intellectual Property Vendors" is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Licensing Strategies of the New "intellectual Property Vendors" is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Licensing Strategies of the New "intellectual Property Vendors" is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Licensing Ip needs to make to build a sustainable competitive advantage.
