Case Study Description of Competing Through Joint Innovation
This is an MIT Sloan Management Review Article. Emerging markets such as China and India have become the growth drivers of corporate research and development initiatives from all around the world. Although there is growing evidence that Chinese companies are shifting their innovation focus from cost saving to knowledge-based research, the view by many in the West remains that companies based in emerging markets are not ready to take over the role of leading innovators from their Western competitors. As a result, Chinese multinationals have been at a competitive disadvantage, particularly in strategic technology industries. What can Chinese multinationals do to overcome Western barriers to entry in strategically important technology industries in which "Made in China" or "Designed in China" are viewed as negatives? What dynamic innovation capabilities - or, put another way, what culturally specific processes - should companies focus on to gain acceptance in the competitive global marketplace? To answer these questions, the author studied Huawei Technologies Co. Ltd., the Chinese telecommunications company that has recently made significant inroads in Europe's mature and strategically important telecommunications industry, making it a potential role model for companies in China and other parts of Asia hoping to make a similar transition. In Europe, the author notes, Huawei has typically relied on the same strategy it used to build its market position in China. It has (1) offered customized technologies that meet the practical needs and resource constraints of target customers; (2) built customer loyalty by enhancing practical innovation with longer-term joint innovation partnerships; and (3) enlisted the support of governments, universities, and other industry stakeholders by customizing further innovation investments to their priorities.
Swot Analysis of "Competing Through Joint Innovation" written by Manuel Hensmans includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Innovation Huawei facing as an external strategic factors. Some of the topics covered in Competing Through Joint Innovation case study are - Strategic Management Strategies, Innovation, Joint ventures and Global Business.
Some of the macro environment factors that can be used to understand the Competing Through Joint Innovation casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, geopolitical disruptions, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, wage bills are increasing, etc
Introduction to SWOT Analysis of Competing Through Joint Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Competing Through Joint Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Innovation Huawei, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Innovation Huawei 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 Competing Through Joint Innovation can be done for the following purposes –
1. Strategic planning using facts provided in Competing Through Joint Innovation case study
2. Improving business portfolio management of Innovation Huawei
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Innovation Huawei
Strengths Competing Through Joint Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Innovation Huawei in Competing Through Joint Innovation Harvard Business Review case study are -
Diverse revenue streams
– Innovation Huawei is present in almost all the verticals within the industry. This has provided firm in Competing Through Joint Innovation 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.
Operational resilience
– The operational resilience strategy in the Competing Through Joint 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.
High switching costs
– The high switching costs that Innovation Huawei 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.
Learning organization
- Innovation Huawei 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 Huawei is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Competing Through Joint Innovation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Innovation Huawei has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Innovation Huawei 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 lead change in Global Business field
– Innovation Huawei 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 Huawei 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 Huawei are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Innovation Huawei in the sector have low bargaining power. Competing Through Joint Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Innovation Huawei to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Innovation Huawei in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Innovation Huawei has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Innovation Huawei to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Innovation Huawei digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Innovation Huawei 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.
Training and development
– Innovation Huawei has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Competing Through Joint 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.
Weaknesses Competing Through Joint Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Competing Through Joint Innovation are -
High operating costs
– Compare to the competitors, firm in the HBR case study Competing Through Joint 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 Innovation Huawei 's lucrative customers.
Lack of clear differentiation of Innovation Huawei products
– To increase the profitability and margins on the products, Innovation Huawei needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Competing Through Joint Innovation HBR case study mentions - Innovation Huawei 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.
Aligning sales with marketing
– It come across in the case study Competing Through Joint Innovation 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 Competing Through Joint Innovation can leverage the sales team experience to cultivate customer relationships as Innovation Huawei is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Innovation Huawei is dominated by functional specialists. It is not different from other players in the Global Business segment. Innovation Huawei needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Innovation Huawei to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Innovation Huawei 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 bargaining power of channel partners
– Because of the regulatory requirements, Manuel Hensmans suggests that, Innovation Huawei is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Competing Through Joint 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 Innovation Huawei has relatively successful track record of launching new products.
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 Huawei supply chain. Even after few cautionary changes mentioned in the HBR case study - Competing Through Joint Innovation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Innovation Huawei vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Innovation Huawei is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Competing Through Joint Innovation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Competing Through Joint Innovation, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Opportunities Competing Through Joint 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 Competing Through Joint Innovation are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Innovation Huawei 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.
Creating value in data economy
– The success of analytics program of Innovation Huawei has opened avenues for new revenue streams for the organization in the industry. This can help Innovation Huawei to build a more holistic ecosystem as suggested in the Competing Through Joint Innovation case study. Innovation Huawei can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Innovation Huawei can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Innovation Huawei 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 Huawei 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 Huawei can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Innovation Huawei can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Innovation Huawei 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.
Learning at scale
– Online learning technologies has now opened space for Innovation Huawei 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.
Using analytics as competitive advantage
– Innovation Huawei 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 Competing Through Joint Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Innovation Huawei to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Innovation Huawei to increase its market reach. Innovation Huawei 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.
Building a culture of innovation
– managers at Innovation Huawei 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 Global Business segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Innovation Huawei can use these opportunities to build new business models that can help the communities that Innovation Huawei operates in. Secondly it can use opportunities from government spending in Global Business sector.
Leveraging digital technologies
– Innovation Huawei can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Competing Through Joint Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Competing Through Joint Innovation are -
Stagnating economy with rate increase
– Innovation Huawei 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 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 Huawei needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Huawei.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Innovation Huawei with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Huawei in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Innovation Huawei 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.
Increasing wage structure of Innovation Huawei
– 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 Huawei.
Shortening product life cycle
– it is one of the major threat that Innovation Huawei is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Innovation Huawei 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 Competing Through Joint Innovation .
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 Huawei business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Competing Through Joint Innovation, Innovation Huawei may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Huawei 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.
Weighted SWOT Analysis of Competing Through Joint 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 Competing Through Joint 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 Competing Through Joint 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 Competing Through Joint 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 Competing Through Joint 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 Innovation Huawei needs to make to build a sustainable competitive advantage.