Open Innovation at Fujitsu (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Open Innovation at Fujitsu (A)
This case study examines the open innovation journey at Fujitsu, a global information and communication technology company. The case ends with the location decision between Tokyo, Japan, downtown San Francisco or Sunnyvale, California, regarding establishing a small unit for the purpose of institutionalizing Fujitsu's open innovation journey. Mohi Ahmed, together with Mikito Kiname and Tango Matsumoto, embarked on the journey to strengthen Fujitsu's marketing and innovation platform in North America, and to transform the company's innovation culture by making the Japanese giant more open and leaner in its approach to innovation. In the past, Fujitsu struggled with opening up its innovation process in Silicon Valley: partnering with other organizations to integrate outside technology in its products and services; spinning out unexploited technology had proved challenging. With input from thinkers and practitioners inside and outside of Fujitsu, Ahmed identified the maker movement as a potential avenue to begin Fujitsu's open innovation journey because of the significance of Monozukuri (art and science of making) in the company's origin. He engaged with Mark Hatch, CEO of TechShop Inc., a fast-growing chain of member-based maker spaces, in a conversation about how companies could focus on "doing well by doing good," and they jointly initiated four projects on which they could collaborate. Ahmed planned to leverage these projects to transform Fujitsu's innovation culture by illustrating that the company could successfully engage in exploration with new external partners, and could move quickly into experimentation to accelerate learning and innovation. This case also shows how two very different organizations managed to team across boundaries. Doing so, it emphasizes the human side of inter-organizational collaboration by highlighting leadership activities that served to develop a shared vision, nurture psychological safety, leverage collective capabilities, and promote execution-as-learning.
Swot Analysis of "Open Innovation at Fujitsu (A)" written by Amy C. Edmondson, Jean-Francois Harvey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fujitsu's Fujitsu facing as an external strategic factors. Some of the topics covered in Open Innovation at Fujitsu (A) case study are - Strategic Management Strategies, Collaboration, Emerging markets, IT, Leadership, Organizational culture, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Open Innovation at Fujitsu (A) casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Open Innovation at Fujitsu (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Open Innovation at Fujitsu (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fujitsu's Fujitsu, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fujitsu's Fujitsu 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 Open Innovation at Fujitsu (A) can be done for the following purposes –
1. Strategic planning using facts provided in Open Innovation at Fujitsu (A) case study
2. Improving business portfolio management of Fujitsu's Fujitsu
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 Fujitsu's Fujitsu
Strengths Open Innovation at Fujitsu (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fujitsu's Fujitsu in Open Innovation at Fujitsu (A) Harvard Business Review case study are -
Analytics focus
– Fujitsu's Fujitsu is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Amy C. Edmondson, Jean-Francois Harvey can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Strategy & Execution field
– Fujitsu's Fujitsu 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 Fujitsu's Fujitsu in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Fujitsu's Fujitsu 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
– Fujitsu's Fujitsu is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Fujitsu's Fujitsu in the sector have low bargaining power. Open Innovation at Fujitsu (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fujitsu's Fujitsu to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Fujitsu's Fujitsu 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
- Fujitsu's Fujitsu 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 Fujitsu's Fujitsu is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Open Innovation at Fujitsu (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Fujitsu's Fujitsu is present in almost all the verticals within the industry. This has provided firm in Open Innovation at Fujitsu (A) 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
– Fujitsu's Fujitsu is one of the most innovative firm in sector. Manager in Open Innovation at Fujitsu (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Open Innovation at Fujitsu (A) 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.
Effective Research and Development (R&D)
– Fujitsu's Fujitsu 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 Open Innovation at Fujitsu (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Fujitsu's Fujitsu
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fujitsu's Fujitsu does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Open Innovation at Fujitsu (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Open Innovation at Fujitsu (A) are -
Capital Spending Reduction
– Even during the low interest decade, Fujitsu's Fujitsu has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High cash cycle compare to competitors
Fujitsu's Fujitsu 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 Open Innovation at Fujitsu (A), in the dynamic environment Fujitsu's Fujitsu has struggled to respond to the nimble upstart competition. Fujitsu's Fujitsu has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Open Innovation at Fujitsu (A) 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 Fujitsu's Fujitsu 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Fujitsu's Fujitsu is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fujitsu's Fujitsu needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fujitsu's Fujitsu to focus more on services rather than just following the product oriented approach.
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 Fujitsu's Fujitsu supply chain. Even after few cautionary changes mentioned in the HBR case study - Open Innovation at Fujitsu (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fujitsu's Fujitsu vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Open Innovation at Fujitsu (A), is just above the industry average. Fujitsu's Fujitsu 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Amy C. Edmondson, Jean-Francois Harvey suggests that, Fujitsu's Fujitsu is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Fujitsu's Fujitsu 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.
Slow to strategic competitive environment developments
– As Open Innovation at Fujitsu (A) HBR case study mentions - Fujitsu's Fujitsu 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.
Interest costs
– Compare to the competition, Fujitsu's Fujitsu 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.
Opportunities Open Innovation at Fujitsu (A) | 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 Open Innovation at Fujitsu (A) are -
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. Fujitsu's Fujitsu can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Fujitsu's Fujitsu to increase its market reach. Fujitsu's Fujitsu 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
– Fujitsu's Fujitsu can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Open Innovation at Fujitsu (A) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fujitsu's Fujitsu is facing challenges because of the dominance of functional experts in the organization. Open Innovation at Fujitsu (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Fujitsu's Fujitsu 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 Fujitsu's Fujitsu 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fujitsu's Fujitsu can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Fujitsu's Fujitsu 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fujitsu's Fujitsu 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.
Manufacturing automation
– Fujitsu's Fujitsu 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.
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. Fujitsu's Fujitsu 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. Fujitsu's Fujitsu 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.
Creating value in data economy
– The success of analytics program of Fujitsu's Fujitsu has opened avenues for new revenue streams for the organization in the industry. This can help Fujitsu's Fujitsu to build a more holistic ecosystem as suggested in the Open Innovation at Fujitsu (A) case study. Fujitsu's Fujitsu 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, Fujitsu's Fujitsu 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, Open Innovation at Fujitsu (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Open Innovation at Fujitsu (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Open Innovation at Fujitsu (A) are -
Shortening product life cycle
– it is one of the major threat that Fujitsu's Fujitsu is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Fujitsu's Fujitsu can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Fujitsu's Fujitsu 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. Fujitsu's Fujitsu can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Fujitsu's Fujitsu 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.
Consumer confidence and its impact on Fujitsu's Fujitsu 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.
Regulatory challenges
– Fujitsu's Fujitsu 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.
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 Fujitsu's Fujitsu business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Fujitsu's Fujitsu 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.
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. Fujitsu's Fujitsu 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fujitsu's Fujitsu 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fujitsu's Fujitsu 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 Open Innovation at Fujitsu (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Open Innovation at Fujitsu (A), Fujitsu's Fujitsu 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 Open Innovation at Fujitsu (A) 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 Open Innovation at Fujitsu (A) 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 Open Innovation at Fujitsu (A) 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 Open Innovation at Fujitsu (A) 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 Open Innovation at Fujitsu (A) 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 Fujitsu's Fujitsu needs to make to build a sustainable competitive advantage.