The World's Most Innovative Companies: 4 Things That Differentiate Them SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The World's Most Innovative Companies: 4 Things That Differentiate Them
The authors present research indicating that four key attributes are critical to a robust innovation strategy: an emphasis on speed; the use of technological platforms; well-run (and very often lean) R&D processes; and the systematic exploration of adjacent markets. They discuss how to accomplish each and present examples from the world's most innovative companies, including Zara, GE and W.L. Gore.
Authors :: Michael Ringel, Andrew Taylor, Hadi Zablit
Swot Analysis of "The World's Most Innovative Companies: 4 Things That Differentiate Them" written by Michael Ringel, Andrew Taylor, Hadi Zablit includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that W.l Gore facing as an external strategic factors. Some of the topics covered in The World's Most Innovative Companies: 4 Things That Differentiate Them case study are - Strategic Management Strategies, Leadership, Organizational culture and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The World's Most Innovative Companies: 4 Things That Differentiate Them casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The World's Most Innovative Companies: 4 Things That Differentiate Them
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The World's Most Innovative Companies: 4 Things That Differentiate Them case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the W.l Gore, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them can be done for the following purposes –
1. Strategic planning using facts provided in The World's Most Innovative Companies: 4 Things That Differentiate Them case study
2. Improving business portfolio management of W.l Gore
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 W.l Gore
Strengths The World's Most Innovative Companies: 4 Things That Differentiate Them | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of W.l Gore in The World's Most Innovative Companies: 4 Things That Differentiate Them Harvard Business Review case study are -
Effective Research and Development (R&D)
– W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– W.l Gore has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The World's Most Innovative Companies: 4 Things That Differentiate Them 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For W.l Gore digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. W.l Gore 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.
Diverse revenue streams
– W.l Gore is present in almost all the verticals within the industry. This has provided firm in The World's Most Innovative Companies: 4 Things That Differentiate Them case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– W.l Gore has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled W.l Gore to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- W.l Gore 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 W.l Gore is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The World's Most Innovative Companies: 4 Things That Differentiate Them Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of W.l Gore in the sector have low bargaining power. The World's Most Innovative Companies: 4 Things That Differentiate Them has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps W.l Gore to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that W.l Gore 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 W.l Gore
– The covid-19 pandemic has put organizational resilience at the centre of everthing that W.l Gore does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– The World's Most Innovative Companies: 4 Things That Differentiate Them firm has clearly differentiated products in the market place. This has enabled W.l Gore to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped W.l Gore to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The World's Most Innovative Companies: 4 Things That Differentiate Them are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The World's Most Innovative Companies: 4 Things That Differentiate Them, in the dynamic environment W.l Gore has struggled to respond to the nimble upstart competition. W.l Gore has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– W.l Gore 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 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 W.l Gore supply chain. Even after few cautionary changes mentioned in the HBR case study - The World's Most Innovative Companies: 4 Things That Differentiate Them, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left W.l Gore vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The World's Most Innovative Companies: 4 Things That Differentiate Them 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 W.l Gore has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, W.l Gore 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them 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 W.l Gore 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, W.l Gore is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The World's Most Innovative Companies: 4 Things That Differentiate Them can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As The World's Most Innovative Companies: 4 Things That Differentiate Them HBR case study mentions - W.l Gore 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.
Increasing silos among functional specialists
– The organizational structure of W.l Gore is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. W.l Gore needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help W.l Gore to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
W.l Gore 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.
Workers concerns about automation
– As automation is fast increasing in the segment, W.l Gore 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.
Opportunities The World's Most Innovative Companies: 4 Things That Differentiate Them | 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 The World's Most Innovative Companies: 4 Things That Differentiate Them are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, W.l Gore is facing challenges because of the dominance of functional experts in the organization. The World's Most Innovative Companies: 4 Things That Differentiate Them 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. W.l Gore can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for W.l Gore 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 W.l Gore to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. W.l Gore 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. W.l Gore 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects W.l Gore can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– W.l Gore 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.
Developing new processes and practices
– W.l Gore 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.
Learning at scale
– Online learning technologies has now opened space for W.l Gore 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.
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 W.l Gore in the consumer business. Now W.l Gore can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, W.l Gore 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, The World's Most Innovative Companies: 4 Things That Differentiate Them, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, W.l Gore can use these opportunities to build new business models that can help the communities that W.l Gore 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 W.l Gore has opened avenues for new revenue streams for the organization in the industry. This can help W.l Gore to build a more holistic ecosystem as suggested in the The World's Most Innovative Companies: 4 Things That Differentiate Them case study. W.l Gore can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for W.l Gore 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.
Threats The World's Most Innovative Companies: 4 Things That Differentiate Them External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them are -
Environmental challenges
– W.l Gore 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. W.l Gore can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. W.l Gore 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.
High dependence on third party suppliers
– W.l Gore 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. W.l Gore can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them .
Consumer confidence and its impact on W.l Gore demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of W.l Gore
– 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 W.l Gore.
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.
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 W.l Gore business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– W.l Gore has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, W.l Gore 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.
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. W.l Gore needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– W.l Gore 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.
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.
Weighted SWOT Analysis of The World's Most Innovative Companies: 4 Things That Differentiate Them 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 The World's Most Innovative Companies: 4 Things That Differentiate Them 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 The World's Most Innovative Companies: 4 Things That Differentiate Them 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 The World's Most Innovative Companies: 4 Things That Differentiate Them 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 The World's Most Innovative Companies: 4 Things That Differentiate Them 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 W.l Gore needs to make to build a sustainable competitive advantage.