Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry
What happens when firms in an oligopolistic industry find themselves lagging behind in a potentially dominant technology? If R&D costs are significant and catch-up is key, technology laggards must turn to each other and open up their innovation processes in order to survive. This article uses a real options framework to explain the motives of bitter rivals to engage in collaborative relationships in order to catch up with industry leaders in specific technologies. It shows that ex ante, their interests converge and this lays the foundation of "catch-up alliances": competitors open up to catch up. However, they often bring vastly different resources to the alliance and, in the process of cooperation, what they learn may cause their interests to diverge. Furthermore, some participants may discount a technology trajectory on the basis of what they learn, and terminate efforts in that area. Therefore, the "road not taken" may be a valuable outcome of the open innovation alliance. This article uses the case of a global alliance in hybrid electric drivetrain automotive technology as the study context, and it analyzes the implications for managers facing similar decisions.
Swot Analysis of "Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry" written by Marcelo Cano-Kollmann, Snehal Awate, T J Hannigan, Ram Mudambi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Catch Laggards facing as an external strategic factors. Some of the topics covered in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry case study are - Strategic Management Strategies, Creativity, Research & development and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, increasing commodity prices, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Catch Laggards, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Catch Laggards 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry can be done for the following purposes –
1. Strategic planning using facts provided in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry case study
2. Improving business portfolio management of Catch Laggards
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Catch Laggards
Strengths Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Catch Laggards in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry Harvard Business Review case study are -
Organizational Resilience of Catch Laggards
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Catch Laggards does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Catch Laggards in the sector have low bargaining power. Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Catch Laggards to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Catch Laggards is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Catch Laggards has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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.
Diverse revenue streams
– Catch Laggards is present in almost all the verticals within the industry. This has provided firm in Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry firm has clearly differentiated products in the market place. This has enabled Catch Laggards to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Catch Laggards to invest into research and development (R&D) and innovation.
High brand equity
– Catch Laggards has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Catch Laggards to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Catch Laggards 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Catch Laggards has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Catch Laggards 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.
Ability to recruit top talent
– Catch Laggards is one of the leading recruiters in the industry. Managers in the Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Catch Laggards 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.
Cross disciplinary teams
– Horizontal connected teams at the Catch Laggards 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.
Weaknesses Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Catch Laggards 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, Catch Laggards is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry, in the dynamic environment Catch Laggards has struggled to respond to the nimble upstart competition. Catch Laggards has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Catch Laggards 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Catch Laggards 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. Catch Laggards 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.
Slow to strategic competitive environment developments
– As Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry HBR case study mentions - Catch Laggards 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.
Products dominated business model
– Even though Catch Laggards 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 - Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Catch Laggards 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry, is just above the industry average. Catch Laggards needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Marcelo Cano-Kollmann, Snehal Awate, T J Hannigan, Ram Mudambi suggests that, Catch Laggards 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.
Opportunities Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry | 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Catch Laggards can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Catch Laggards in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Catch Laggards to increase its market reach. Catch Laggards 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.
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 Catch Laggards in the consumer business. Now Catch Laggards can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Catch Laggards 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.
Developing new processes and practices
– Catch Laggards can develop new processes and procedures in Innovation & Entrepreneurship industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Catch Laggards 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 Innovation & Entrepreneurship segment.
Manufacturing automation
– Catch Laggards can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Catch Laggards is facing challenges because of the dominance of functional experts in the organization. Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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.
Buying journey improvements
– Catch Laggards can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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.
Creating value in data economy
– The success of analytics program of Catch Laggards has opened avenues for new revenue streams for the organization in the industry. This can help Catch Laggards to build a more holistic ecosystem as suggested in the Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry case study. Catch Laggards 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 Catch Laggards can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Catch Laggards 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 Catch Laggards to hire the very best people irrespective of their geographical location.
Threats Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry are -
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 Catch Laggards business can come under increasing regulations regarding data privacy, data security, 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. Catch Laggards 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
– Catch Laggards 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Catch Laggards with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Catch Laggards 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.
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 Catch Laggards in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Catch Laggards 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Catch Laggards in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Catch Laggards is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Catch Laggards
– 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 Catch Laggards.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Catch Laggards can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Catch Laggards 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. Catch Laggards can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Burying the Hatchet for Catch-Up: Open Innovation among Industry Laggards in the Automotive Industry 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 Catch Laggards needs to make to build a sustainable competitive advantage.
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