Case Study Description of Boundary-Setting Strategies for Escaping Innovation Traps
This is an MIT Sloan Management Review article. Research suggests that a variety of traps that forestall innovation can be avoided by, paradoxically, placing boundaries on innovation activity. In an environment without boundaries, there is no context for shared interpretation or common expectations. Boundaries, on the other hand, act not as constraints but as aids to defining innovation needs and producing useful outputs that business units can exploit. Smartly placed constraints actually act as enablers of innovation by making it more palatable and execution friendly and giving it traction in the competition for corporate attention and resources. Offers several scenarios of "boundaries in use"--for example, how Shell makes the radical legitimate by making it thematically relevant to core business.
Swot Analysis of "Boundary-Setting Strategies for Escaping Innovation Traps" written by Liisa Valikangas, Michael Gibbert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Boundaries Traps facing as an external strategic factors. Some of the topics covered in Boundary-Setting Strategies for Escaping Innovation Traps case study are - Strategic Management Strategies, Innovation and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Boundary-Setting Strategies for Escaping Innovation Traps casestudy better are - – increasing commodity prices, talent flight as more people leaving formal jobs, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, wage bills are increasing,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Boundary-Setting Strategies for Escaping Innovation Traps
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Boundary-Setting Strategies for Escaping Innovation Traps case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Boundaries Traps, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Boundaries Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps can be done for the following purposes –
1. Strategic planning using facts provided in Boundary-Setting Strategies for Escaping Innovation Traps case study
2. Improving business portfolio management of Boundaries Traps
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 Boundaries Traps
Strengths Boundary-Setting Strategies for Escaping Innovation Traps | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Boundaries Traps in Boundary-Setting Strategies for Escaping Innovation Traps Harvard Business Review case study are -
Diverse revenue streams
– Boundaries Traps is present in almost all the verticals within the industry. This has provided firm in Boundary-Setting Strategies for Escaping Innovation Traps 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.
Learning organization
- Boundaries Traps 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 Boundaries Traps is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Boundary-Setting Strategies for Escaping Innovation Traps Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Boundaries Traps has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Boundaries Traps 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.
Superior customer experience
– The customer experience strategy of Boundaries Traps in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Boundaries Traps in the sector have low bargaining power. Boundary-Setting Strategies for Escaping Innovation Traps has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Boundaries Traps to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Boundaries Traps 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.
Ability to lead change in Innovation & Entrepreneurship field
– Boundaries Traps 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 Boundaries Traps in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Boundaries Traps digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Boundaries Traps 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.
High brand equity
– Boundaries Traps has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Boundaries Traps to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Boundaries Traps is one of the most innovative firm in sector. Manager in Boundary-Setting Strategies for Escaping Innovation Traps Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Boundaries Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Boundaries Traps has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Boundary-Setting Strategies for Escaping Innovation Traps 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.
Weaknesses Boundary-Setting Strategies for Escaping Innovation Traps | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Boundary-Setting Strategies for Escaping Innovation Traps are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Boundary-Setting Strategies for Escaping Innovation Traps, is just above the industry average. Boundaries Traps 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.
High cash cycle compare to competitors
Boundaries Traps 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 Boundaries Traps 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Boundaries Traps needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Boundaries Traps products
– To increase the profitability and margins on the products, Boundaries Traps needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Boundaries Traps 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Boundaries Traps is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Boundary-Setting Strategies for Escaping Innovation Traps can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Boundaries Traps 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.
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 Boundaries Traps supply chain. Even after few cautionary changes mentioned in the HBR case study - Boundary-Setting Strategies for Escaping Innovation Traps, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Boundaries Traps vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Boundary-Setting Strategies for Escaping Innovation Traps, in the dynamic environment Boundaries Traps has struggled to respond to the nimble upstart competition. Boundaries Traps has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Liisa Valikangas, Michael Gibbert suggests that, Boundaries Traps is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Boundary-Setting Strategies for Escaping Innovation Traps | 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 Boundary-Setting Strategies for Escaping Innovation Traps are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Boundaries Traps 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, Boundary-Setting Strategies for Escaping Innovation Traps, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Boundaries Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Boundaries Traps to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Boundaries Traps 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.
Leveraging digital technologies
– Boundaries Traps 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.
Developing new processes and practices
– Boundaries Traps 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.
Manufacturing automation
– Boundaries Traps 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.
Learning at scale
– Online learning technologies has now opened space for Boundaries Traps 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.
Loyalty marketing
– Boundaries Traps 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
– Boundaries Traps can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Boundary-Setting Strategies for Escaping Innovation Traps 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Boundaries Traps is facing challenges because of the dominance of functional experts in the organization. Boundary-Setting Strategies for Escaping Innovation Traps 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. Boundaries Traps 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. Boundaries Traps 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Boundaries Traps 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.
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 Boundaries Traps in the consumer business. Now Boundaries Traps can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Boundary-Setting Strategies for Escaping Innovation Traps External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Boundary-Setting Strategies for Escaping Innovation Traps are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Boundaries Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps .
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.
Technology acceleration in Forth Industrial Revolution
– Boundaries Traps has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Boundaries Traps 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
– Boundaries Traps 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Boundary-Setting Strategies for Escaping Innovation Traps, Boundaries Traps 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 .
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. Boundaries Traps needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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. Boundaries Traps can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Boundaries Traps 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. Boundaries Traps can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing wage structure of Boundaries Traps
– 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 Boundaries Traps.
Shortening product life cycle
– it is one of the major threat that Boundaries Traps is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Boundaries Traps business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Boundaries Traps 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.
Weighted SWOT Analysis of Boundary-Setting Strategies for Escaping Innovation Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps 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 Boundary-Setting Strategies for Escaping Innovation Traps 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 Boundaries Traps needs to make to build a sustainable competitive advantage.