Intellectual Ventures creates and acquires intellectual property, which it then seeks to monetize through non-exclusive licensing. In early 2009, as an increasing number of companies were trying to position themselves as leading intermediaries in the market for intellectual property, IV was looking for the best business model to become such a leading intermediary. Its model was predicated on making it easy for small inventors to monetize their inventions and IP (by selling it to IV) and then using its scale and aggregate IP portfolio to extract revenues from potential licensees (usually technology companies).
Authors :: Andrei Hagiu, David B. Yoffie, Alison Berkley Wagonfeld
Swot Analysis of "Intellectual Ventures" written by Andrei Hagiu, David B. Yoffie, Alison Berkley Wagonfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Intellectual Iv facing as an external strategic factors. Some of the topics covered in Intellectual Ventures case study are - Strategic Management Strategies, Intellectual property, Research & development, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Intellectual Ventures casestudy better are - – technology disruption, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Intellectual Ventures
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Intellectual Ventures case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Intellectual Iv, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Intellectual Iv 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 Intellectual Ventures can be done for the following purposes –
1. Strategic planning using facts provided in Intellectual Ventures case study
2. Improving business portfolio management of Intellectual Iv
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Intellectual Iv
Strengths Intellectual Ventures | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Intellectual Iv in Intellectual Ventures Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Intellectual Ventures firm has clearly differentiated products in the market place. This has enabled Intellectual Iv to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Intellectual Iv to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Intellectual Iv has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Intellectual Iv 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.
High switching costs
– The high switching costs that Intellectual Iv 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.
Organizational Resilience of Intellectual Iv
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Intellectual Iv does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Intellectual Iv 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 Intellectual Iv is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Intellectual Ventures Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Intellectual Iv 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 Intellectual Ventures HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Intellectual Iv is one of the leading recruiters in the industry. Managers in the Intellectual Ventures are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Strategy & Execution field
– Intellectual Iv 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 Intellectual Iv in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Intellectual Ventures 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.
Superior customer experience
– The customer experience strategy of Intellectual Iv in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Intellectual Iv 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 Intellectual Ventures - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Intellectual Iv has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Intellectual Iv to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Intellectual Ventures | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Intellectual Ventures are -
High operating costs
– Compare to the competitors, firm in the HBR case study Intellectual Ventures has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Intellectual Iv 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Intellectual Iv 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.
Need for greater diversity
– Intellectual Iv 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.
High cash cycle compare to competitors
Intellectual Iv 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.
Interest costs
– Compare to the competition, Intellectual Iv has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Intellectual Ventures HBR case study mentions - Intellectual Iv takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Intellectual Ventures, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Intellectual Iv 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Intellectual Ventures 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 Intellectual Iv 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 Intellectual Iv supply chain. Even after few cautionary changes mentioned in the HBR case study - Intellectual Ventures, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Intellectual Iv vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Intellectual Iv has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Intellectual Ventures should strive to include more intangible value offerings along with its core products and services.
Opportunities Intellectual Ventures | 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 Intellectual Ventures are -
Manufacturing automation
– Intellectual Iv can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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 Intellectual Iv in the consumer business. Now Intellectual Iv can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Intellectual Iv can develop new processes and procedures in Strategy & Execution 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.
Buying journey improvements
– Intellectual Iv can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Intellectual Ventures 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Intellectual Iv can use these opportunities to build new business models that can help the communities that Intellectual Iv operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Intellectual Iv has opened avenues for new revenue streams for the organization in the industry. This can help Intellectual Iv to build a more holistic ecosystem as suggested in the Intellectual Ventures case study. Intellectual Iv can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Intellectual Iv 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, Intellectual Ventures, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Intellectual Iv in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Intellectual Iv 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 Strategy & Execution segment.
Loyalty marketing
– Intellectual Iv has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Intellectual Iv 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.
Leveraging digital technologies
– Intellectual Iv 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Intellectual Iv to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Threats Intellectual Ventures External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Intellectual Ventures are -
Environmental challenges
– Intellectual Iv 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. Intellectual Iv can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Intellectual Iv with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Intellectual Iv.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Intellectual Iv 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 Intellectual Ventures .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Intellectual Iv needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Intellectual Iv is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Intellectual Iv has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Intellectual Iv needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Intellectual Iv in the Strategy & Execution sector and impact the bottomline of the organization.
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 Intellectual Iv business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Intellectual Iv 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 Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Intellectual Iv 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.
Weighted SWOT Analysis of Intellectual Ventures 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 Intellectual Ventures 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 Intellectual Ventures 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 Intellectual Ventures 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 Intellectual Ventures 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 Intellectual Iv needs to make to build a sustainable competitive advantage.