From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem
In June 2016, Benjamin (Bibi) Netanyahu, Prime Minister of Israel, wrestled with how to sustain Israel's strong innovation track record and the country's reputation as the 'startup nation.' Despite the economic miracle the country had wrought since its founding, he knew he could not be complacent. On the one hand, in 2015 Israeli start-ups raised record-breaking amounts of venture capital, and exits for the year totaled over $8 Billion. On the other hand, government expenditure on R&D had decreased and Israel's position in the Global Innovation Index had fallen. Several other indicators, such as achievement tests among elementary school students in math and science, painted a grim picture. Furthermore, in spite of the wealth created by many high-tech Israeli firms, socioeconomic gaps in the country had widened. A two-tier economy had formed. The long-term sustainability of the "innovation economy" was in doubt, as the sector faced increased competition from foreign innovation hubs, was being reshaped by the growth of Multinational Corporations (MNCs) locating R&D centers in Israel, and had to contend with a vexing shortage of human capital and low labor force participation among some groups. Netanyahu had to assess whether it was time to sound the alarm, and whether drastic and immediate measures were needed to right the innovation economy ship. Bibi mulled over which policies or interventions would best curb the erosion of Israel's competitive position as an innovation powerhouse and how best to promote social equality. He pondered whether public policy could make a difference or whether the market and societal currents, responsible for these trends, were too strong for him and his government to try to contend with. Several prominent figures, including the Governor of the Central Bank of Israel, Knesset members, Israel's Chief Scientist, prominent business leaders, academics, and journalists weigh in on the formation of the Israeli entrepreneurial and innovation ecosystem, the challenges it faces going forward, and what approaches might help it continue to thrive.
Authors :: Elie Ofek, Margot Eiran
Topics :: Innovation & Entrepreneurship
Tags :: Economy, Global strategy, Globalization, Government, Research & development, Venture capital, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis
Swot Analysis of "From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem" written by Elie Ofek, Margot Eiran includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Israel's Israeli facing as an external strategic factors. Some of the topics covered in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem case study are - Strategic Management Strategies, Economy, Global strategy, Globalization, Government, Research & development, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem casestudy better are - – technology disruption, supply chains are disrupted by pandemic , 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, there is increasing trade war between United States & China, central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Israel's Israeli, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Israel's Israeli 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem can be done for the following purposes –
1. Strategic planning using facts provided in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem case study
2. Improving business portfolio management of Israel's Israeli
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 Israel's Israeli
Strengths From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Israel's Israeli in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem Harvard Business Review case study are -
Innovation driven organization
– Israel's Israeli is one of the most innovative firm in sector. Manager in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Israel's Israeli is present in almost all the verticals within the industry. This has provided firm in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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.
Ability to recruit top talent
– Israel's Israeli is one of the leading recruiters in the industry. Managers in the From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 Israel's Israeli in the sector have low bargaining power. From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Israel's Israeli to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Israel's Israeli in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem firm has clearly differentiated products in the market place. This has enabled Israel's Israeli to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Israel's Israeli to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Israel's Israeli has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Israel's Israeli 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 Israel's Israeli is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Israel's Israeli 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.
Strong track record of project management
– Israel's Israeli is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Israel's Israeli
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Israel's Israeli does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Israel's Israeli 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem are -
High operating costs
– Compare to the competitors, firm in the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 Israel's Israeli 's lucrative customers.
Need for greater diversity
– Israel's Israeli 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Israel's Israeli is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 bargaining power of channel partners
– Because of the regulatory requirements, Elie Ofek, Margot Eiran suggests that, Israel's Israeli 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.
Lack of clear differentiation of Israel's Israeli products
– To increase the profitability and margins on the products, Israel's Israeli needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Israel's Israeli supply chain. Even after few cautionary changes mentioned in the HBR case study - From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Israel's Israeli vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Israel's Israeli 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. Israel's Israeli 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.
Low market penetration in new markets
– Outside its home market of Israel's Israeli, firm in the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem can leverage the sales team experience to cultivate customer relationships as Israel's Israeli is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, is just above the industry average. Israel's Israeli 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.
Slow to strategic competitive environment developments
– As From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem HBR case study mentions - Israel's Israeli 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.
Opportunities From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem | 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem are -
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. Israel's Israeli can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Israel's Israeli 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.
Better consumer reach
– The expansion of the 5G network will help Israel's Israeli to increase its market reach. Israel's Israeli 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.
Developing new processes and practices
– Israel's Israeli 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Israel's Israeli can use these opportunities to build new business models that can help the communities that Israel's Israeli operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Israel's Israeli 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Israel's Israeli 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, From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Israel's Israeli 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 Israel's Israeli 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 Israel's Israeli in the consumer business. Now Israel's Israeli can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Israel's Israeli 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.
Manufacturing automation
– Israel's Israeli can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Israel's Israeli 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Israel's Israeli to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Israel's Israeli 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.
Threats From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem are -
Increasing wage structure of Israel's Israeli
– 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 Israel's Israeli.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Israel's Israeli will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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. Israel's Israeli needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– Israel's Israeli 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. Israel's Israeli can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Stagnating economy with rate increase
– Israel's Israeli can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Israel's Israeli 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.
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.
Shortening product life cycle
– it is one of the major threat that Israel's Israeli is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Israel's Israeli has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Israel's Israeli 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.
Regulatory challenges
– Israel's Israeli 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.
Consumer confidence and its impact on Israel's Israeli 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.
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. Israel's Israeli can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Israel's Israeli 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem .
Weighted SWOT Analysis of From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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 Israel's Israeli needs to make to build a sustainable competitive advantage.
