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 inequality as vast percentage of new income is going to the top 1%, technology disruption, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
Slow decision making process
– As mentioned earlier in the report, W.l Gore 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. W.l Gore 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.
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.
Aligning sales with marketing
– It come across in the case study The World's Most Innovative Companies: 4 Things That Differentiate Them that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The World's Most Innovative Companies: 4 Things That Differentiate Them can leverage the sales team experience to cultivate customer relationships as W.l Gore is planning to shift buying processes online.
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.
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 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.
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.
Skills based hiring
– The stress on hiring functional specialists at W.l Gore 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.
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.
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 -
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.
Manufacturing automation
– W.l Gore 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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, W.l Gore 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.
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.
Buying journey improvements
– W.l Gore can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The World's Most Innovative Companies: 4 Things That Differentiate Them 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.
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.
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.
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.
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.
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.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that W.l Gore is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for W.l Gore in the Strategy & Execution industry. The Strategy & Execution 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 W.l Gore in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The World's Most Innovative Companies: 4 Things That Differentiate Them, W.l Gore may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.