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 - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, technology disruption, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation,
increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
Sustainable margins compare to other players in Organizational Development industry
– Licensing Strategies of the New "intellectual Property Vendors" firm has clearly differentiated products in the market place. This has enabled Licensing Ip to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Licensing Ip to invest into research and development (R&D) and innovation.
Ability to lead change in Organizational Development field
– Licensing Ip is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Licensing Ip in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Licensing Ip has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Licensing Ip to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Successful track record of launching new products
– Licensing Ip has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Licensing Ip has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Licensing Ip are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Licensing Ip is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Licensing Strategies of the New "intellectual Property Vendors" can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Licensing Ip has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Lee Davis suggests that, Licensing Ip is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Licensing Ip needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Licensing Strategies of the New "intellectual Property Vendors", it seems that the employees of Licensing Ip don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study Licensing Strategies of the New "intellectual Property Vendors", it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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 -
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Licensing Ip can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Licensing Strategies of the New "intellectual Property Vendors", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Licensing Ip in the consumer business. Now Licensing Ip can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Licensing Ip can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Licensing Ip can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Licensing Ip can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Licensing Ip can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Licensing Ip in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
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 -
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Licensing Strategies of the New "intellectual Property Vendors", Licensing Ip may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
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.
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.
Increasing wage structure of Licensing Ip
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Licensing Ip.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Licensing Ip.
Stagnating economy with rate increase
– Licensing Ip can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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" .
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.
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.
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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Licensing Ip can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.