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 - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing transportation and logistics costs, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
cloud computing is disrupting traditional business models, technology disruption, 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 -
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.
Learning organization
- Innovation Bottle 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 Innovation Bottle is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Innovation Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Diverse revenue streams
– Innovation Bottle is present in almost all the verticals within the industry. This has provided firm in Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Innovation Bottle digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Innovation Bottle 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.
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.
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.
Superior customer experience
– The customer experience strategy of Innovation Bottle in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 -
Aligning sales with marketing
– It come across in the case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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 Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle can leverage the sales team experience to cultivate customer relationships as Innovation Bottle is planning to shift buying processes online.
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.
Interest costs
– Compare to the competition, Innovation Bottle has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, in the dynamic environment Innovation Bottle has struggled to respond to the nimble upstart competition. Innovation Bottle has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Henry W. Chesbrough, Marcel Bogers, Robert Strand suggests that, Innovation Bottle 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 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Innovation Bottle 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.
Slow to strategic competitive environment developments
– As Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle HBR case study mentions - Innovation Bottle 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.
High cash cycle compare to competitors
Innovation Bottle 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.
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 -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Innovation Bottle is facing challenges because of the dominance of functional experts in the organization. Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle 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.
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 Innovation Bottle in the consumer business. Now Innovation Bottle can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Innovation Bottle can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Sustainability Through Open Innovation: Carlsberg and the Green Fiber Bottle, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Leveraging digital technologies
– Innovation Bottle 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.
Learning at scale
– Online learning technologies has now opened space for Innovation Bottle 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Innovation Bottle 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 Innovation Bottle to hire the very best people irrespective of their geographical location.
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.
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.
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.
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. Innovation Bottle needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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 .
Increasing wage structure of Innovation Bottle
– 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 Innovation Bottle.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Innovation Bottle 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.
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.
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.
Consumer confidence and its impact on Innovation Bottle 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.
Shortening product life cycle
– it is one of the major threat that Innovation Bottle is facing in Innovation & Entrepreneurship 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. 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.
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.
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.
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.
