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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing energy prices, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, increasing transportation and logistics costs, 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 -
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.
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.
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.
Training and development
– Israel's Israeli has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem 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.
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.
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.
Highly skilled collaborators
– Israel's Israeli 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 From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
High brand equity
– Israel's Israeli has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Israel's Israeli to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Innovation & Entrepreneurship field
– Israel's Israeli 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 Israel's Israeli in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 -
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.
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.
No frontier risks strategy
– After analyzing the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, 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.
High cash cycle compare to competitors
Israel's Israeli has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Israel's Israeli 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.
Capital Spending Reduction
– Even during the low interest decade, Israel's Israeli 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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Israel's Israeli is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Israel's Israeli needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Israel's Israeli to focus more on services rather than just following the product oriented approach.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, it seems that the employees of Israel's Israeli 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.
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 -
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.
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.
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.
Loyalty marketing
– Israel's Israeli 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.
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.
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. Israel's Israeli 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. Israel's Israeli 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.
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.
Building a culture of innovation
– managers at Israel's Israeli can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Leveraging digital technologies
– Israel's Israeli 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.
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.
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.
Creating value in data economy
– The success of analytics program of Israel's Israeli has opened avenues for new revenue streams for the organization in the industry. This can help Israel's Israeli to build a more holistic ecosystem as suggested in the From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem case study. Israel's Israeli can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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 -
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.
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.
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.
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.
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 Israel's Israeli business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study From Start-Up to Grown-Up Nation: The Future of the Israeli Innovation Ecosystem, Israel's Israeli 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 .
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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Israel's Israeli 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.
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.
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.