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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing commodity prices,
increasing energy prices, supply chains are disrupted by pandemic , 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 -
Organizational Resilience of Webasto Innovation
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Webasto Innovation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Learning organization
- Webasto Innovation 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 Webasto Innovation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Webasto: Co-Creating Innovation with Lead Users Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Effective Research and Development (R&D)
– Webasto Innovation 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 Webasto: Co-Creating Innovation with Lead Users - 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 Webasto Innovation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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 -
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Webasto Innovation 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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Webasto: Co-Creating Innovation with Lead Users HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Webasto Innovation has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Webasto Innovation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Webasto: Co-Creating Innovation with Lead Users can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Webasto Innovation needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Webasto Innovation is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Webasto Innovation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Webasto Innovation to focus more on services rather than just following the product oriented approach.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Webasto: Co-Creating Innovation with Lead Users, it seems that the employees of Webasto Innovation 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.
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 -
Learning at scale
– Online learning technologies has now opened space for Webasto Innovation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Webasto Innovation 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.
Buying journey improvements
– Webasto Innovation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Webasto: Co-Creating Innovation with Lead Users 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.
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.
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.
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.
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.
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.
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.
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.
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.
Using analytics as competitive advantage
– Webasto Innovation 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 Webasto: Co-Creating Innovation with Lead Users - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Webasto Innovation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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 -
High dependence on third party suppliers
– Webasto Innovation 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 Webasto Innovation 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.
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 Webasto Innovation.
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.
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.
Increasing wage structure of Webasto Innovation
– 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 Webasto Innovation.
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.
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.
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 Webasto Innovation in the Strategy & Execution sector and impact the bottomline of the organization.
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 .
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.