Engaging with Startups to Enhance Corporate Innovation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Engaging with Startups to Enhance Corporate Innovation
When it comes to agility, startups have an edge over large corporations-whereas large corporations sit on resources which startups can only dream of. The combination of entrepreneurial activity with corporate ability seems like a perfect match, but often goes unused. This article examines how large corporations from the tech industry have begun to tap into entrepreneurial innovation from startups. Prominent examples are used to inductively derive a set of four models commonly used to engage with startups and to describe their characteristics, challenges, and rationales. While corporate equity is the key mechanism behind more established models, newer approaches replace equity with shared technology to connect both worlds with fewer organizational costs. This article presents a typology of corporate mechanisms to engage with startups that balance speed and agility against control and strategic direction, to map the ways companies can bridge the gap between themselves and the startup world.
Swot Analysis of "Engaging with Startups to Enhance Corporate Innovation" written by Tobias Weiblen, Henry W. Chesbrough includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Startups Corporations facing as an external strategic factors. Some of the topics covered in Engaging with Startups to Enhance Corporate Innovation case study are - Strategic Management Strategies, Joint ventures, Managing organizations, Technology, Venture capital and Technology & Operations.
Some of the macro environment factors that can be used to understand the Engaging with Startups to Enhance Corporate Innovation casestudy better are - – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Engaging with Startups to Enhance Corporate Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Engaging with Startups to Enhance Corporate Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Startups Corporations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Startups Corporations 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 Engaging with Startups to Enhance Corporate Innovation can be done for the following purposes –
1. Strategic planning using facts provided in Engaging with Startups to Enhance Corporate Innovation case study
2. Improving business portfolio management of Startups Corporations
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Startups Corporations
Strengths Engaging with Startups to Enhance Corporate Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Startups Corporations in Engaging with Startups to Enhance Corporate Innovation Harvard Business Review case study are -
High switching costs
– The high switching costs that Startups Corporations 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.
Operational resilience
– The operational resilience strategy in the Engaging with Startups to Enhance Corporate 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.
Superior customer experience
– The customer experience strategy of Startups Corporations in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Technology & Operations industry
– Engaging with Startups to Enhance Corporate Innovation firm has clearly differentiated products in the market place. This has enabled Startups Corporations to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Startups Corporations to invest into research and development (R&D) and innovation.
Learning organization
- Startups Corporations 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 Startups Corporations is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Engaging with Startups to Enhance Corporate Innovation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Startups Corporations in the sector have low bargaining power. Engaging with Startups to Enhance Corporate Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Startups Corporations to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Startups Corporations 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 Engaging with Startups to Enhance Corporate 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.
Training and development
– Startups Corporations has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Engaging with Startups to Enhance Corporate Innovation Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Startups Corporations 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Startups Corporations digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Startups Corporations 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.
Strong track record of project management
– Startups Corporations is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Startups Corporations
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Startups Corporations does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Engaging with Startups to Enhance Corporate Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Engaging with Startups to Enhance Corporate Innovation are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Engaging with Startups to Enhance Corporate Innovation, in the dynamic environment Startups Corporations has struggled to respond to the nimble upstart competition. Startups Corporations has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Startups Corporations 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.
Slow to strategic competitive environment developments
– As Engaging with Startups to Enhance Corporate Innovation HBR case study mentions - Startups Corporations 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.
Slow decision making process
– As mentioned earlier in the report, Startups Corporations 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. Startups Corporations 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.
Need for greater diversity
– Startups Corporations 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.
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 Startups Corporations supply chain. Even after few cautionary changes mentioned in the HBR case study - Engaging with Startups to Enhance Corporate Innovation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Startups Corporations vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Engaging with Startups to Enhance Corporate Innovation 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 Startups Corporations has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Engaging with Startups to Enhance Corporate 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 Startups Corporations 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Startups Corporations 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 Startups Corporations is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Startups Corporations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Startups Corporations to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Startups Corporations, firm in the HBR case study Engaging with Startups to Enhance Corporate Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Engaging with Startups to Enhance Corporate 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 Engaging with Startups to Enhance Corporate Innovation are -
Manufacturing automation
– Startups Corporations can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Creating value in data economy
– The success of analytics program of Startups Corporations has opened avenues for new revenue streams for the organization in the industry. This can help Startups Corporations to build a more holistic ecosystem as suggested in the Engaging with Startups to Enhance Corporate Innovation case study. Startups Corporations can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Startups Corporations 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 Startups Corporations to hire the very best people irrespective of their geographical location.
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 Startups Corporations in the consumer business. Now Startups Corporations can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Startups Corporations 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Startups Corporations 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. Startups Corporations 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Startups Corporations 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 Startups Corporations to increase its market reach. Startups Corporations 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Startups Corporations can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Startups Corporations is facing challenges because of the dominance of functional experts in the organization. Engaging with Startups to Enhance Corporate 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.
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 Startups Corporations 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.
Using analytics as competitive advantage
– Startups Corporations 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 Engaging with Startups to Enhance Corporate Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Startups Corporations to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Startups Corporations 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.
Threats Engaging with Startups to Enhance Corporate Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Engaging with Startups to Enhance Corporate Innovation are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Startups Corporations with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Startups Corporations 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Startups Corporations in the Technology & Operations industry. The Technology & Operations 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.
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 Startups Corporations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Startups Corporations 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 Engaging with Startups to Enhance Corporate Innovation .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Engaging with Startups to Enhance Corporate Innovation, Startups Corporations may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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. Startups Corporations needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Startups Corporations is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Startups Corporations 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.
High dependence on third party suppliers
– Startups Corporations 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.
Environmental challenges
– Startups Corporations 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. Startups Corporations can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Startups Corporations
– 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 Startups Corporations.
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 Startups Corporations in the Technology & Operations sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Engaging with Startups to Enhance Corporate 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 Engaging with Startups to Enhance Corporate 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 Engaging with Startups to Enhance Corporate 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 Engaging with Startups to Enhance Corporate 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 Engaging with Startups to Enhance Corporate 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 Startups Corporations needs to make to build a sustainable competitive advantage.
