Webasto: Co-Creating Innovation with Lead Users SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Webasto: Co-Creating Innovation with Lead Users
University of California, Berkeley-Haas collection"In the book, Open Services Innovation, the concept of co-creation with one's customers is touted as a best practice for companies. This is also the prescription offered by the Lead User methodology built on the work of Eric von Hippel. There are a number of companies that have benefited from embracing the idea of co-creating with customers. And business school cases in general tend to discuss successful examples of various proffered concepts. This case is different. It is, in fact, a failure case, where a company faithfully followed a "best practice", and ended up with nothing to show for it. As such, it can be a powerful antidote to the usual success cases that comprise much of our syllabi. The Webasto case study provides students with an example of a company that focused on product innovation by incorporating a lead user method. Alexander Lang, director of marketing, created an elaborate open innovation process in order to help Webasto not only create innovative products, but also to differentiate itself as an innovative company. There are a number of interesting innovation, organizational, strategy, change management, and leadership issues this case brings up, all likely to generate a lively class discussion. As it happens, some of these issues prove fatal to the initiative."
Swot Analysis of "Webasto: Co-Creating Innovation with Lead Users" written by Henry W. Chesbrough, Alexander Stern includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Webasto Innovation facing as an external strategic factors. Some of the topics covered in Webasto: Co-Creating Innovation with Lead Users case study are - Strategic Management Strategies, Competitive strategy, Entrepreneurship, Innovation, Leadership and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Webasto: Co-Creating Innovation with Lead Users casestudy better are - – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is backlash against globalization, technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Webasto: Co-Creating Innovation with Lead Users
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Webasto: Co-Creating Innovation with Lead Users case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Webasto Innovation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Webasto Innovation 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 Webasto: Co-Creating Innovation with Lead Users can be done for the following purposes –
1. Strategic planning using facts provided in Webasto: Co-Creating Innovation with Lead Users case study
2. Improving business portfolio management of Webasto Innovation
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 Webasto Innovation
Strengths Webasto: Co-Creating Innovation with Lead Users | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Webasto Innovation in Webasto: Co-Creating Innovation with Lead Users Harvard Business Review case study are -
Strong track record of project management
– Webasto Innovation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Webasto Innovation is one of the most innovative firm in sector. Manager in Webasto: Co-Creating Innovation with Lead Users 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 Webasto Innovation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Webasto Innovation 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.
Operational resilience
– The operational resilience strategy in the Webasto: Co-Creating Innovation with Lead Users 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 Webasto Innovation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Webasto Innovation in the sector have low bargaining power. Webasto: Co-Creating Innovation with Lead Users has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Webasto Innovation to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Webasto Innovation 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 Webasto: Co-Creating Innovation with Lead Users HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Webasto Innovation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Webasto Innovation 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.
Analytics focus
– Webasto Innovation 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 Henry W. Chesbrough, Alexander Stern 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.
Cross disciplinary teams
– Horizontal connected teams at the Webasto Innovation 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.
High brand equity
– Webasto Innovation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Webasto Innovation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Webasto: Co-Creating Innovation with Lead Users firm has clearly differentiated products in the market place. This has enabled Webasto Innovation to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Webasto Innovation to invest into research and development (R&D) and innovation.
Weaknesses Webasto: Co-Creating Innovation with Lead Users | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Webasto: Co-Creating Innovation with Lead Users are -
High operating costs
– Compare to the competitors, firm in the HBR case study Webasto: Co-Creating Innovation with Lead Users 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 Webasto Innovation 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Henry W. Chesbrough, Alexander Stern suggests that, Webasto Innovation 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
– Webasto Innovation 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 Webasto Innovation, firm in the HBR case study Webasto: Co-Creating Innovation with Lead Users needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Webasto Innovation 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.
Lack of clear differentiation of Webasto Innovation products
– To increase the profitability and margins on the products, Webasto Innovation needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Webasto: Co-Creating Innovation with Lead Users 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 Webasto: Co-Creating Innovation with Lead Users can leverage the sales team experience to cultivate customer relationships as Webasto Innovation is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Webasto Innovation 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. Webasto Innovation 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Webasto: Co-Creating Innovation with Lead Users, in the dynamic environment Webasto Innovation has struggled to respond to the nimble upstart competition. Webasto Innovation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Webasto Innovation 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.
No frontier risks strategy
– After analyzing the HBR case study Webasto: Co-Creating Innovation with Lead Users, 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.
Opportunities Webasto: Co-Creating Innovation with Lead Users | 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 Webasto: Co-Creating Innovation with Lead Users are -
Better consumer reach
– The expansion of the 5G network will help Webasto Innovation to increase its market reach. Webasto Innovation 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.
Building a culture of innovation
– managers at Webasto Innovation 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.
Loyalty marketing
– Webasto Innovation 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.
Creating value in data economy
– The success of analytics program of Webasto Innovation has opened avenues for new revenue streams for the organization in the industry. This can help Webasto Innovation to build a more holistic ecosystem as suggested in the Webasto: Co-Creating Innovation with Lead Users case study. Webasto Innovation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Webasto Innovation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Webasto Innovation 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.
Manufacturing automation
– Webasto Innovation 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.
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. Webasto Innovation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Webasto Innovation can use these opportunities to build new business models that can help the communities that Webasto Innovation operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Webasto Innovation 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, Webasto Innovation 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.
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 Webasto Innovation in the consumer business. Now Webasto Innovation can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Webasto Innovation 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, Webasto: Co-Creating Innovation with Lead Users, 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 Webasto: Co-Creating Innovation with Lead Users External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Webasto: Co-Creating Innovation with Lead Users are -
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. Webasto Innovation 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.
Stagnating economy with rate increase
– Webasto Innovation 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Webasto Innovation 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 Webasto: Co-Creating Innovation with Lead Users .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Webasto Innovation 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.
Regulatory challenges
– Webasto Innovation 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Webasto Innovation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Webasto Innovation business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Webasto Innovation 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. Webasto Innovation can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Webasto Innovation is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Webasto Innovation needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Webasto Innovation can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Webasto Innovation has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Webasto Innovation 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.
Weighted SWOT Analysis of Webasto: Co-Creating Innovation with Lead Users 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 Webasto: Co-Creating Innovation with Lead Users 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 Webasto: Co-Creating Innovation with Lead Users 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 Webasto: Co-Creating Innovation with Lead Users 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 Webasto: Co-Creating Innovation with Lead Users 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 Webasto Innovation needs to make to build a sustainable competitive advantage.