Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

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

Topics :: Innovation & Entrepreneurship

Tags :: Product development, Technology, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, 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, supply chains are disrupted by pandemic , there is backlash against globalization, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing commodity prices, etc

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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.

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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

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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 -

Successful track record of launching new products

– Gate Model has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gate Model 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.

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.

Cross disciplinary teams

– Horizontal connected teams at the Gate Model 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.

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.

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.

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.

Organizational Resilience of Gate Model

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gate Model does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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.

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.

Training and development

– Gate Model has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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.

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.

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.

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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 -

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.

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.

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.

Increasing silos among functional specialists

– The organizational structure of Gate Model is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Gate Model needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gate Model to focus more on services rather than just following the product oriented approach.

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.

Slow to strategic competitive environment developments

– As Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development HBR case study mentions - Gate Model 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.

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.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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 Gate Model 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 Gate Model supply chain. Even after few cautionary changes mentioned in the HBR case study - Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gate Model vulnerable to further global disruptions in South East Asia.

Slow decision making process

– As mentioned earlier in the report, Gate Model has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Gate Model even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Skills based hiring

– The stress on hiring functional specialists at Gate Model has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

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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 -

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.

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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Gate Model is facing challenges because of the dominance of functional experts in the organization. Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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.

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.

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.

Using analytics as competitive advantage

– Gate Model 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 Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gate Model to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Gate Model 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.

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.

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.

Buying journey improvements

– Gate Model can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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.

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.

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.

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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 -

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.

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.

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. Gate Model can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– 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.

Shortening product life cycle

– it is one of the major threat that Gate Model is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Gate Model business can come under increasing regulations regarding data privacy, data security, etc.

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.

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.

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 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.

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 Gate Model in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.

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.

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.

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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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