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 - – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
talent flight as more people leaving formal jobs, technology disruption, 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 -
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.
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.
Learning organization
- Gate Model 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 Gate Model is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development 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.
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.
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.
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.
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.
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.
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 -
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.
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.
Interest costs
– Compare to the competition, Gate Model 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 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.
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.
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.
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.
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.
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.
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.
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 -
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.
Loyalty marketing
– Gate Model 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.
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.
Leveraging digital technologies
– Gate Model can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gate Model in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Open Innovation and the Stage-Gate Process: A Revised Model for New Product Development, Gate Model may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
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.
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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