Does IP Strategy Have to Cripple Open Innovation? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Does IP Strategy Have to Cripple Open Innovation?
This is an MIT Sloan Management Review article. While the protection of intellectual property, or IP, seems to be at odds with a company's pursuit of open innovation, or OI -the selective use of research carried out elsewhere -businesses in the know can align these two approaches. An appropriate IP strategy can actually be an enabler of OI activities. In fact, an increasing number of companies, such as International Business Machines Corp., are involved in interconnected "ecosystems"-critically dependent on cooperating with other parties to generate innovations and profits. The authors'research has found that the enabling function of IP depends on the specific circumstances under which companies engage in OI. Two variables in particular have emerged as critical determinants: the technological environment in which the business is active, and the knowledge distribution among potential collaborators. Each variable is presented as having two possible values. The technological environment, for instance, is either calm or turbulent. Concerning the nature of innovative knowledge distribution, external knowledge can be thought of as residing either with the few (in puddles) or with the many (in oceans). By combining these two dimension sets, and thus creating four possible scenarios, we provide a better sense of a firm's most appropriate IP/IO strategy. Depending on the category into which the company falls, IP plays a different role as an enabler of OI.
Authors :: Oliver Alexy, Paola Criscuolo, Ammon Salter
Swot Analysis of "Does IP Strategy Have to Cripple Open Innovation?" written by Oliver Alexy, Paola Criscuolo, Ammon Salter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oi Ip facing as an external strategic factors. Some of the topics covered in Does IP Strategy Have to Cripple Open Innovation? case study are - Strategic Management Strategies, IT, Managing organizations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Does IP Strategy Have to Cripple Open Innovation? casestudy better are - – increasing household debt because of falling income levels, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing transportation and logistics costs,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Does IP Strategy Have to Cripple Open Innovation?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Does IP Strategy Have to Cripple Open Innovation? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oi Ip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oi Ip 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 Does IP Strategy Have to Cripple Open Innovation? can be done for the following purposes –
1. Strategic planning using facts provided in Does IP Strategy Have to Cripple Open Innovation? case study
2. Improving business portfolio management of Oi Ip
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 Oi Ip
Strengths Does IP Strategy Have to Cripple Open Innovation? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oi Ip in Does IP Strategy Have to Cripple Open Innovation? Harvard Business Review case study are -
Innovation driven organization
– Oi Ip is one of the most innovative firm in sector. Manager in Does IP Strategy Have to Cripple Open Innovation? 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 Does IP Strategy Have to Cripple Open Innovation? 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.
Ability to recruit top talent
– Oi Ip is one of the leading recruiters in the industry. Managers in the Does IP Strategy Have to Cripple Open Innovation? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Oi Ip has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oi Ip has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Oi Ip 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 Oi Ip is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Does IP Strategy Have to Cripple Open Innovation? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Oi Ip 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.
Highly skilled collaborators
– Oi Ip 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 Does IP Strategy Have to Cripple Open Innovation? 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
– Does IP Strategy Have to Cripple Open Innovation? firm has clearly differentiated products in the market place. This has enabled Oi Ip to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Oi Ip to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Oi Ip 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 Does IP Strategy Have to Cripple Open Innovation? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Oi Ip 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 Oi Ip in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Oi Ip in the sector have low bargaining power. Does IP Strategy Have to Cripple Open Innovation? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oi Ip to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Oi Ip is present in almost all the verticals within the industry. This has provided firm in Does IP Strategy Have to Cripple Open Innovation? 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.
Weaknesses Does IP Strategy Have to Cripple Open Innovation? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Does IP Strategy Have to Cripple Open Innovation? are -
Capital Spending Reduction
– Even during the low interest decade, Oi Ip 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.
Lack of clear differentiation of Oi Ip products
– To increase the profitability and margins on the products, Oi Ip needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Does IP Strategy Have to Cripple Open Innovation?, is just above the industry average. Oi Ip 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 operating costs
– Compare to the competitors, firm in the HBR case study Does IP Strategy Have to Cripple Open Innovation? 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 Oi Ip 's lucrative customers.
Need for greater diversity
– Oi Ip 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.
Increasing silos among functional specialists
– The organizational structure of Oi Ip is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Oi Ip needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oi Ip to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Oi Ip 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Does IP Strategy Have to Cripple Open Innovation?, it seems that the employees of Oi Ip 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.
Products dominated business model
– Even though Oi Ip 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 - Does IP Strategy Have to Cripple Open Innovation? should strive to include more intangible value offerings along with its core products and services.
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 Oi Ip supply chain. Even after few cautionary changes mentioned in the HBR case study - Does IP Strategy Have to Cripple Open Innovation?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Oi Ip vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Does IP Strategy Have to Cripple Open Innovation?, in the dynamic environment Oi Ip has struggled to respond to the nimble upstart competition. Oi Ip has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Does IP Strategy Have to Cripple Open Innovation? | 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 Does IP Strategy Have to Cripple Open Innovation? are -
Learning at scale
– Online learning technologies has now opened space for Oi Ip 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oi Ip 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 Oi Ip to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oi Ip is facing challenges because of the dominance of functional experts in the organization. Does IP Strategy Have to Cripple Open Innovation? 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Oi Ip 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.
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 Oi Ip in the consumer business. Now Oi Ip can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Oi Ip 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 Does IP Strategy Have to Cripple Open Innovation? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oi Ip to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Oi Ip 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.
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. Oi Ip 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 Oi Ip to increase its market reach. Oi Ip 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.
Leveraging digital technologies
– Oi Ip 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.
Creating value in data economy
– The success of analytics program of Oi Ip has opened avenues for new revenue streams for the organization in the industry. This can help Oi Ip to build a more holistic ecosystem as suggested in the Does IP Strategy Have to Cripple Open Innovation? case study. Oi Ip 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, Oi Ip 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, Does IP Strategy Have to Cripple Open Innovation?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Oi Ip 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.
Threats Does IP Strategy Have to Cripple Open Innovation? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Does IP Strategy Have to Cripple Open Innovation? are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oi Ip 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 Oi Ip in the Strategy & Execution sector and impact the bottomline of the organization.
Regulatory challenges
– Oi Ip 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.
Shortening product life cycle
– it is one of the major threat that Oi Ip is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oi Ip with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Oi Ip
– 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 Oi Ip.
High dependence on third party suppliers
– Oi Ip 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.
Consumer confidence and its impact on Oi Ip 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.
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. Oi Ip can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Oi Ip 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
– Oi Ip 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. Oi Ip can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Oi Ip.
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 Does IP Strategy Have to Cripple Open Innovation? 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 Does IP Strategy Have to Cripple Open Innovation? 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 Does IP Strategy Have to Cripple Open Innovation? 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 Does IP Strategy Have to Cripple Open Innovation? 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 Does IP Strategy Have to Cripple Open Innovation? 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 Oi Ip needs to make to build a sustainable competitive advantage.