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 - – increasing energy prices, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, technology disruption, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
Highly skilled collaborators
– Innovation Huawei 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 Competing Through Joint Innovation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Ability to recruit top talent
– Innovation Huawei is one of the leading recruiters in the industry. Managers in the Competing Through Joint Innovation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Innovation Huawei
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Innovation Huawei does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Analytics focus
– Innovation Huawei is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Manuel Hensmans can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
Sustainable margins compare to other players in Global Business industry
– Competing Through Joint Innovation firm has clearly differentiated products in the market place. This has enabled Innovation Huawei to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Innovation Huawei to invest into research and development (R&D) and innovation.
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 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.
Interest costs
– Compare to the competition, Innovation Huawei 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.
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.
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.
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 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.
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.
Products dominated business model
– Even though Innovation Huawei 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 - Competing Through Joint Innovation should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Innovation Huawei 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.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Innovation Huawei can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Huawei 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Innovation Huawei in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Innovation Huawei 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, Competing Through Joint Innovation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Innovation Huawei can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Competing Through Joint Innovation 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Innovation Huawei 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 Huawei 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.
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.
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.
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.
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 Huawei in the consumer business. Now Innovation Huawei can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Innovation Huawei can develop new processes and procedures in Global Business 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.
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 -
Consumer confidence and its impact on Innovation Huawei 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.
Environmental challenges
– Innovation Huawei 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 Huawei can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Innovation Huawei in the Global Business industry. The Global Business 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.
Regulatory challenges
– Innovation Huawei 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 Global Business industry regulations.
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.
Technology acceleration in Forth Industrial Revolution
– Innovation Huawei has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Innovation Huawei needs to keep up with the evolution of technology in the Global Business 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.
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.
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.
