Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle
The case follows Danish brewer Carlsberg as it develops the Green Fiber Bottle, a beer bottle made of wood pulp, in collaboration with a startup, a small-to-medium sized enterprise (SME), and a Danish University. The case has a dual focus. First, it demonstrates how a company can successfully innovate by leveraging the concept of open innovation. Second, it shows how sustainability - and relatedly, the idea of purpose - can be a powerful motivator to drive open innovation efforts. In this respect, this case serves as one of the first formal documentations of how open innovation can effectively drive innovation activities to address a stated sustainability objective. This co-mingling of sustainability and open innovation has the potential to become a domain in its own right (perhaps under a moniker such as "Sustainable Open Innovation").
Authors :: Henry W. Chesbrough, Marcel Bogers, Robert Strand
Topics :: Innovation & Entrepreneurship
Tags :: Marketing, Social enterprise, Social responsibility, Sustainability, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle" written by Henry W. Chesbrough, Marcel Bogers, Robert Strand includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Innovation Bottle facing as an external strategic factors. Some of the topics covered in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle case study are - Strategic Management Strategies, Marketing, Social enterprise, Social responsibility, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle casestudy better are - – increasing energy prices, technology disruption, increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Innovation Bottle, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Innovation Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle can be done for the following purposes –
1. Strategic planning using facts provided in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle case study
2. Improving business portfolio management of Innovation Bottle
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 Innovation Bottle
Strengths Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Innovation Bottle in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle Harvard Business Review case study are -
Training and development
– Innovation Bottle has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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.
Strong track record of project management
– Innovation Bottle is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Innovation Bottle has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Innovation Bottle to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Innovation Bottle is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Innovation Bottle in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Innovation Bottle 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle firm has clearly differentiated products in the market place. This has enabled Innovation Bottle to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Innovation Bottle to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Innovation Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Innovation Bottle is one of the leading recruiters in the industry. Managers in the Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Innovation Bottle is one of the most innovative firm in sector. Manager in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Innovation Bottle has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Innovation Bottle 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.
Low bargaining power of suppliers
– Suppliers of Innovation Bottle in the sector have low bargaining power. Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Innovation Bottle to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Innovation Bottle 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.
Weaknesses Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle are -
Increasing silos among functional specialists
– The organizational structure of Innovation Bottle is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Innovation Bottle needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Innovation Bottle to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Innovation Bottle 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, it seems that the employees of Innovation Bottle 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.
Lack of clear differentiation of Innovation Bottle products
– To increase the profitability and margins on the products, Innovation Bottle needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Innovation Bottle 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. Innovation Bottle 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Innovation Bottle 's lucrative customers.
Need for greater diversity
– Innovation Bottle 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 Innovation Bottle supply chain. Even after few cautionary changes mentioned in the HBR case study - Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Innovation Bottle vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Innovation Bottle, firm in the HBR case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, is just above the industry average. Innovation Bottle 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.
Products dominated business model
– Even though Innovation Bottle 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 - Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle should strive to include more intangible value offerings along with its core products and services.
Opportunities Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle | 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Innovation Bottle can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Innovation Bottle can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Innovation Bottle can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Innovation Bottle 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.
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. Innovation Bottle can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Innovation Bottle 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.
Loyalty marketing
– Innovation Bottle 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Innovation Bottle 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.
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 Innovation Bottle 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, Innovation Bottle 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Innovation Bottle 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. Innovation Bottle 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.
Creating value in data economy
– The success of analytics program of Innovation Bottle has opened avenues for new revenue streams for the organization in the industry. This can help Innovation Bottle to build a more holistic ecosystem as suggested in the Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle case study. Innovation Bottle can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Innovation Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Innovation Bottle to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle are -
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.
Environmental challenges
– Innovation Bottle 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. Innovation Bottle can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Innovation Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, Innovation Bottle may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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 Innovation Bottle business can come under increasing regulations regarding data privacy, data security, etc.
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. Innovation Bottle 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
– Innovation Bottle has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Innovation Bottle needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Regulatory challenges
– Innovation Bottle 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 Innovation & Entrepreneurship industry regulations.
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 Innovation Bottle.
Stagnating economy with rate increase
– Innovation Bottle 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.
High dependence on third party suppliers
– Innovation Bottle 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.
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. Innovation Bottle 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.
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 Innovation Bottle in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Innovation Bottle needs to make to build a sustainable competitive advantage.