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 - – increasing household debt because of falling income levels, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing energy prices, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, there is backlash against globalization, 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 -
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.
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.
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.
Innovation driven organization
– W.l Gore is one of the most innovative firm in sector. Manager in The World's Most Innovative Companies: 4 Things That Differentiate Them Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the The World's Most Innovative Companies: 4 Things That Differentiate Them 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 W.l Gore in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– W.l Gore is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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 -
Products dominated business model
– Even though W.l Gore 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 - The World's Most Innovative Companies: 4 Things That Differentiate Them should strive to include more intangible value offerings along with its core products and services.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them, 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.
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.
Low market penetration in new markets
– Outside its home market of W.l Gore, firm in the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them, it seems that the employees of W.l Gore 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The World's Most Innovative Companies: 4 Things That Differentiate Them, is just above the industry average. W.l Gore 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.
Lack of clear differentiation of W.l Gore products
– To increase the profitability and margins on the products, W.l Gore needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
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.
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.
Better consumer reach
– The expansion of the 5G network will help W.l Gore to increase its market reach. W.l Gore 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.
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. W.l Gore can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– W.l Gore 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.
Using analytics as competitive advantage
– W.l Gore 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 The World's Most Innovative Companies: 4 Things That Differentiate Them - to build a competitive advantage using analytics. The analytics driven competitive advantage can help W.l Gore to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 W.l Gore 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.
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.
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.
Building a culture of innovation
– managers at W.l Gore 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.
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.
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.
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.
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 -
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.
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.
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.
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.
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 W.l Gore in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– W.l Gore 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.
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.
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.
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 W.l Gore.
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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents W.l Gore with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
