Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development
This article explores how firms can benefit from opening up the new product development process by integrating the principles of open innovation with the Stage-Gate process. It examines the potential opportunities of employing the principles of both inbound and outbound open innovation within new product development at a firm in the upstream oil & gas industry. A practitioner-oriented work model, named the open Stage-Gate model, can exploit the advantages of "openness." This model allows explicit consideration of import and export of know-how and technology through gate evaluations and also enables firms to continuously assess their core capabilities and business model. The application of this model can assist firms in capturing value from both internal and external technology exploitation in increasingly open innovation processes.
Authors :: Johan Gronlund, David Ronnberg Sjodin, Johan Frishammar
Swot Analysis of "Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development" written by Johan Gronlund, David Ronnberg Sjodin, Johan Frishammar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gate Model facing as an external strategic factors. Some of the topics covered in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development case study are - Strategic Management Strategies, Product development, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing commodity prices,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gate Model, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development can be done for the following purposes –
1. Strategic planning using facts provided in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development case study
2. Improving business portfolio management of Gate Model
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 Gate Model
Strengths Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gate Model in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development Harvard Business Review case study are -
Ability to lead change in Innovation & Entrepreneurship field
– Gate Model 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 Gate Model in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Gate Model 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.
Highly skilled collaborators
– Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Gate Model is one of the leading recruiters in the industry. Managers in the Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Gate Model in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Gate Model has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gate Model to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Gate Model is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Gate Model digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gate Model 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.
Analytics focus
– Gate Model 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 Johan Gronlund, David Ronnberg Sjodin, Johan Frishammar 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.
Low bargaining power of suppliers
– Suppliers of Gate Model in the sector have low bargaining power. Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gate Model to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development firm has clearly differentiated products in the market place. This has enabled Gate Model to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Gate Model to invest into research and development (R&D) and innovation.
Weaknesses Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development are -
High operating costs
– Compare to the competitors, firm in the HBR case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Gate Model 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Gate Model, firm in the HBR case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gate Model is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, is just above the industry average. Gate Model 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.
Lack of clear differentiation of Gate Model products
– To increase the profitability and margins on the products, Gate Model needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Gate Model 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 - Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, it seems that the employees of Gate Model 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.
Need for greater diversity
– Gate Model 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, Johan Gronlund, David Ronnberg Sjodin, Johan Frishammar suggests that, Gate Model is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development | 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gate Model 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 Gate Model to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Gate Model has opened avenues for new revenue streams for the organization in the industry. This can help Gate Model to build a more holistic ecosystem as suggested in the Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development case study. Gate Model can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Gate Model in the consumer business. Now Gate Model can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gate Model 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, Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Gate Model 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. Gate Model 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.
Better consumer reach
– The expansion of the 5G network will help Gate Model to increase its market reach. Gate Model 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gate Model can use these opportunities to build new business models that can help the communities that Gate Model operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Gate Model 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.
Learning at scale
– Online learning technologies has now opened space for Gate Model 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.
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. Gate Model can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Gate Model can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gate Model 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gate Model can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development are -
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.
Increasing wage structure of Gate Model
– 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 Gate Model.
High dependence on third party suppliers
– Gate Model 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gate Model with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development .
Technology acceleration in Forth Industrial Revolution
– Gate Model has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Gate Model 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.
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 Gate Model.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gate Model 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.
Environmental challenges
– Gate Model 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. Gate Model can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Consumer confidence and its impact on Gate Model 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.
Regulatory challenges
– Gate Model 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.
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. Gate Model needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Gate Model 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.
Weighted SWOT Analysis of Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Gate Model needs to make to build a sustainable competitive advantage.
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