Description
This thesis aims stress out the key challenge organisation might face, if the changes in the environment reveal the need for a strategic repositioning.
I
Faculty of Economics
Subject Corporate Entrepreneurship and Innovation
Chair of Entrepreneurship
Master Thesis
Supervisor: Joakim Winborg
Strategic repositioning in the construction industry –
An examination of main challenges
Hand in by:
Mundt, Tim-Ole
Ladugardsmarken 411
22591 Lund
Student-ID: 851007-T759
Email: [email protected]
Programme: M.Sc. Entrepreneurship/Corporate Entrepreneurship
Date:
Lund, 29th of April 2013
Key words: Strategic repositioning, strategic renewal, Challenges of change pro-
cesses, Strategic Entrepreneurship, Corporate Venturing, Construction Industry,
Spin out
II
Abstract
This thesis aims stress out the key challenge organisation might face, if the changes in
the environment reveal the need for a strategic repositioning. In particular this thesis
examines the perceived organizational challenges that might occur, if an organizations
tries to reposition itself by spinning out a new venture that aims to create a new combi-
nation of products and markets. To illustrate how firms may tackle the occurring chal-
lenges, a model is proposed that points out what key challenges companies need to con-
sider when pursuing a process of strategic repositioning. On the one hand, this paper
classifies strategic repositioning as a strategic initiative dedicated to the domain of stra-
tegic renewal, which can be perceived as one of the main streams of strategic entrepre-
neurship. On the other hand, it will point out several challenges that are directly interre-
lated with a specific form of corporate venturing; the spin out. In effort to combine the-
se two elemental streams of corporate entrepreneurship, the here used concept of strate-
gic repositioning is referring to a range of theoretical concepts that reflect a broad per-
spective on the area of entrepreneurship theory. The theoretical framework majorly con-
sists of two superordinated streams: Firstly, theory dedicated to strategic repositioning
(Reichel, 2005; Ryan, Moroney, Geoghegan, & Cunningham, 2007; Turner, 2003),
which also includes a classification and distinction of the framing domain of strategic
renewal (Agarwal & Helfat, 2009; Kuratko, Covin, & Morris, 2011). Secondly, theory
discussing the main challenges of organizational change with a focus on strategic re-
newal and strategic repositioning (Agarwal & Helfat, 2009; Ryan et al., 2007). Thereby,
the conceptualization of the business model (Cavalcante, Kesting, & Ulhøi, 2011;
McGrath, 2010; Morris, Schindehutte, & Allen, 2005; Osterwalder & Pigneur, 2010)
will be highlighted in effort to outline it as a particularly relevant key challenge with
regard to the spin out as carrier of the strategic repositioning process. Subject of the
conducted case study is Inwido, a multi-national construction company based in Swe-
den that is settled in the window and door industry. To gather the required information a
range of qualitative data was collected embracing semi-structured interviews as well as
the employment of secondary data sources. In a further step the gathered data is ana-
lyzed and compared with relevant literature to reveal implications to the proposed theo-
retical model. According to the findings final recommendations are stated to deduct
further implications for other companies in the construction industry or unrelated indus-
tries that face similar challenges.
III
I TABLE OF CONTENT
I Table of Content ................................................................................................................. III
II List of Abbreviations .......................................................................................................... V
III List of Figures ................................................................................................................... VI
IV List of Tables ................................................................................................................... VII
1 Introduction ........................................................................................................................ 1
1.1 Background ............................................................................................................. 1
1.2 Problem discussion ................................................................................................. 2
1.3 Research question .................................................................................................... 4
1.4 Purpose .................................................................................................................... 5
1.5 Key concepts ........................................................................................................... 6
2 Theoretical frame of reference .......................................................................................... 7
2.1 Strategic renewal ..................................................................................................... 7
2.2 Strategic repositioning .......................................................................................... 11
2.2.1 Distinction and conceptualization ....................................................... 11
2.2.2 Diversification and concentration strategies ....................................... 14
2.2.3 Differentiation of SRP to Diversification and Concentration ............. 16
2.2.4 Static and dynamic perspectives ......................................................... 16
2.2.4.1 Market based view (MBV) – A dynamic view .............. 16
2.2.4.2 Resource based view (RBV) .......................................... 17
2.3 Key Challenges of strategic repositioning processes ............................................ 19
2.3.1 A framework of strategic repositioning .............................................. 20
2.3.2 A conceptual framework of challenges dedicated to SRP .................. 25
3 Method .............................................................................................................................. 30
3.1 Overall research design and process ..................................................................... 30
3.2 Data collection ...................................................................................................... 33
3.3 Method for data analysis ....................................................................................... 38
3.4 Reflections of method choices .............................................................................. 40
4 Presentation of results ..................................................................................................... 43
4.1 Repositioning in practice: A case study of Inwido ............................................... 43
4.2 Key challenges ...................................................................................................... 52
5 Analysis and discussion ................................................................................................... 62
5.1 Strategic renewal ................................................................................................... 62
5.2 Key challenges ...................................................................................................... 64
5.3 A revised framework for successful strategic repositioning ................................. 68
IV
6 Conclusions and implications .......................................................................................... 70
6.1 Conclusions ........................................................................................................... 70
6.2 Implications for research ....................................................................................... 71
6.3 Practical implications ............................................................................................ 72
7 Appendix ........................................................................................................................... 74
8 List of Literature ............................................................................................................ 132
V
II LIST OF ABBREVIATIONS
BA Business areas
BM Business model
CBU Core business units
CR Customer relationship
IP Intellectual property
M&A Mergers and acquisitions
PDP Product development process
RQ Research question
SBU Strategic Business Units
SME Small and medium-sized enterprises
SRP Strategic repositioning
TMT Top management team
TOP 60 Group of 60 executives representing the top management
team of Inwido’s
VI
III LIST OF FIGURES
Figure 1: Strategic Renewal as fundamental From of Strategic Entrepreneurship .......... 9
Figure 2: Classification of strategies according to Welge and Al-Laham (2003) .............. 10
Figure 3: Classification of strategies according to Ansoff (1957) ....................................... 12
Figure 4: SRP as Diversification Strategy according to Ansoff (1957) .............................. 13
Figure 5: The concept of SRP as combination of Diversification and Concentration ...... 14
Figure 6: Classification of different Forms of Diversification according to H.I. Ansoff
(1965) adapted from Reichel (2005) and Bamford and West (2010) . 15
Figure 7: A Conceptual Framework of Challenges in Strategic Repositioning ............... 25
Figure 8: Process of Building Theory from Case Study Research according to
(Eisenhardt, 1989). ................................................................................. 32
Figure 9: Conceptual draft of data analysis method, adapted from Ghannad (2013) ..... 38
Figure 10: The overall research path (marked in bold) of the study, adapted from
Ghannad (2013) ...................................................................................... 40
Figure 11: Structured growth through acquisitions ("Inwido Company Presentation,"
2012) ........................................................................................................ 43
Figure 12: Inwido’s “Light-Matrix” Structure ("Inwido Company Presentation," 2012)46
Figure 13: Inwido’s Brand Portfolio ("Inwido Company Presentation," 2012) ............... 48
Figure 14: Inwido’s business structure – Brands, Segments, Channels, and Offerings
("Inwido Company Presentation," 2012) ............................................ 48
Figure 15: Inwido’s strategic goals ("Inwido Company Presentation," 2012) ................ 50
Figure 16: A Revised Conceptual Framework – Perceived Challenges of Strategic
Repositioning Processes of a Multi-Brand Corporation in the
Construction Industry ........................................................................... 69
VII
IV LIST OF TABLES
Table 1: Overview: Case study design ................................................................................. 30
Table 2: Definition and Operationalization of concepts related to challenges of
strategic repositioning and BM change ................................................ 36
1
1 Introduction
1.1 Background
Adapting to a dynamic business environment has always been challenging for or-
ganizations (Aggarwal & Mudambi, 2005; Barker Iii & Duhaime, 1997; Chan & Soong,
2011; Christensen & Overdorf, 2000; McGrath, 2010; Phan, 2011; M. Porter, 1985;
Ryan et al., 2007; Stahl, 2005; David J Teece, Gary Pisano, & Amy Shuen, 1997;
Turner, 2003). On the one hand, strategic basic decisions regarding the way of how to
enter a market (e.g. innovator or follower) or how to achieve a competitive advantage
(e.g. segmentation, differentiation, cost leadership) had to be made (Ansoff, 1957; P.
Kotler, Keller, Brady, Goodman, & Hansen, 2009; M. Porter, 1985). On the other hand,
more concrete strategic decisions need to be taken regarding how to create and capture
value for the customer (Osterwalder & Pigneur, 2010), how to design the value chain to
deliver the created value to the target markets (P. Kotler et al., 2009), and which re-
sources and capabilities required for these processes (Chan & Soong, 2011; Dittrich,
Duysters, & de Man, 2007; Halme, Lindeman, & Linna, 2012; Ryan et al., 2007; Sama-
vi, Yu, & Topaloglou, 2009; Turner, 2003). A changing business environment challeng-
es this already complex process by adding a dynamic component: industry consolida-
tion, globalization, new information technologies, and rising customer expectations are
driving the further changes in the marketplace (Aggarwal & Mudambi, 2005, p. 48).
Further, Aggarwal and Mudambi (2005, p. 48). claim that especially manufacturing
companies need to develop proactive and effective strategy to improve their efficiency
in this cyclical, slow growth industry. With other words, an organization needs not only
to determine the variables describing what in stands for (vision) and how it will achieve
this idea of itself (mission) (P. Kotler et al., 2009), it also need to revise these variables
according to changing conditions that are affecting the organization (Agarwal & Helfat,
2009; Chan & Soong, 2011; Turner, 2003). If these changing conditions and increasing
customer expectations require a re-examination of the strategic market position and
force companies to substantially altering their product-market combination at the ex-
pense of pre-existing product-market combination one can refer to the term strategic
repositioning (SRP) (Aggarwal & Mudambi, 2005; Ramanujam & Varadarajan, 1989;
Reichel, 2005; Ryan et al., 2007; Turner, 2003).
2
1.2 Problem discussion
G. A. Hamel and Prahalad (1994) claim that in a turbulent environment strategic
change is often considered as crucial for organizations to survive. Among others, Dit-
trich et al. (2007) propose that theory often refers to intense competition and drastic
technological changes (Eisenhardt & Tabrizi, 1995; Sadowski, Dittrich, & Duysters,
2003) as primary motives for companies to change their corporate strategy. Dittrich et
al. (2007) argue that firm’s new strategic directions are needed to facilitate the neces-
sary strategic change (Dittrich et al., 2007, p. 1497) Thus, they propose that the demand
for strategic change comes first, then firms attempt to gather the capabilities needed to
facilitate this change, and resultantly the strategic repositioning process in the market
can be concluded. (Dittrich et al., 2007, p. 1497). Picturing the proposed approach of
Dittrich et al. (2007) one could assume that strategic repositioning (SRP) is a general
logic consequence of a strategic change process. Thus, the author recognised the need
to delimit SRP from this broad generic strategic classification and propose SRP as dedi-
cated to the domain of strategic renewal (Kuratko et al., 2011). Agarwal and Helfat
(2009, p. 282) claim that strategic renewal “…includes the process, content, and out-
come of refreshment or replacement of attributes of an organization that have the po-
tential to substantially affect its long-term prospects.”
Following this classification literature is relating to SRP in a much broader range.
Ryan et al. (2007) argue that “repositioning has been variously employed as essential to
corporate transformation” (Dunphy & Stace, 1993) or as “an element of corporate-
level strategy”(Thompson & Strickland, 2003). Furthermore, Ryan et al. (2007) refer to
SRP as a strategic response in dynamic environments, which can be perceived as over-
lapping to the already mentioned general characterization of strategic change of G. A.
Hamel and Prahalad (1994). Finally, Michael E Porter (1996) is drawing a picture of
SRP as integral to strategic competition and Williamson (1999) uses the term SRP in-
terchangeable with the term turnaround. A turnaround or turnaround management can
be described as a process dedicated to the domain of strategic change (Barker Iii &
Duhaime, 1997) and Ryan et al. (2007, p. 83) add that a turnaround can be described as
radical form of strategic change, which is persuaded by performance drops that threat-
ens subsistence of the organisation.
3
Although, turnarounds most often imply “cutback actions” (Barker Iii & Duhaime,
1997), strategic turnarounds can also be differed “… into those that involve a change in
the organization's strategy for competing in the same business and those that call for
entering a new business or businesses.” (Hofer, 1980, p. 20). Although, SRP shares
parallels with strategic turnarounds (e.g. fundamental strategic character, attempt im-
prove the designated value proposition under performance is challenges), there are ma-
jor differences between both concepts in terms of each concepts nature, scope and path
of change (Ryan et al., 2007, p. 85). In this respect, SRP should be differentiated from a
strategic turnaround (Ryan et al., 2007). With reference to Walsh (1995) and Ra-
jagopalan and Spreitzer (1997), Ryan et al. (2007). they claim that the emphasis of
SRP is on processes of both positive, mental mapping complemented by strategic learn-
ing, in which change is largely endorsed . Further, they claim that change is supple-
mented by supportive entrepreneurial action, which brings SRP closer to the domain of
strategic renewal as also Kuratko et al. (2011, p. 98) claim by proposing the reversely
integration of SRP into strategic renewal. On the other hand, a strategic turnaround,
involves expedient, forced operational intervention (Ryan et al., 2007, p. 98).
Consequently, Ryan, Moroney, Geoghegan, and Cunningham (2007) argue that
“repositioning” within the conceptualization of the term strategic repositioning is not
well elaborated and is lacking supporting citations (Ryan et al., 2007, p. 83). Further,
they claim that this lack of theoretical conceptualization is missing clarity and reveals a
process, which is underspecified (Ryan et al., 2007, p. 83). According to Turner (2003)
reposition is to change the way in which a company’s offering is regarded in the mar-
ket. Thus, SRP appears as a conscious act conducted by corporations as attempt to adapt
to an altering commercial environment (Ryan et al., 2007, p. 84). Turner (2003, p. 251)
defines repositioning as largely driven by a rising gap between market needs and the
corporation’s capabilities. Thus, with reference to Baghai, Coley, and White (2000),
decisions concerning SRP aspects are founded upon a company’s capabilities to merge
the internal and the external environment by discovering a match between requirements
of the particular market and the firm’s ability to serve them (Turner, 2003, p. 251).
Based on these assumptions Ryan et al. (2007) propose a framework for successful
SRP based on six elements: core strategic values, strategic flexibility/learning capabili-
ties, customer awareness and sensitivity, external orientation, management commit-
ment, and belief in the product and brand.
4
Their proposed framework for successful repositioning is based on Turner (2003),
who discussed issues and challenges of repositioning strategy of Cable and Wireless
(C&W), which established market places were increasingly mature with limited poten-
tial for growth. The author refers, among others, to Ryan et al. (2007) self-proclaimed
provisional template for successful repositioning and Turner (2003), as one of the start-
ing point to stress out key challenges of SRP.
Nonetheless, the author argues that current literature has only partially examined
occurring key challenges, especially in the context of a SRP process that embraces a
spin out initiative. Thus, this report tries to contribute by providing an frame majorly
based on the following three theoretical concepts: Firstly, presenting a brief conceptual-
ization of the term “strategic repositioning” based on a generally acknowledged theoret-
ical underlying. Secondly, analysing the main challenges that may occur during a pro-
cess of strategic repositioning. To also provide practical implications the study is based
on a business case. Subject of the case study is the Inwido Group, which is facing the
challenges of an on-going change process affecting its strategy, structure, processes,
culture, peoples, product offerings and markets. Furthermore, Inwido questions if new
ways are needed to pursue the desired strategic change. Therefore they raised several
initiatives to reposition Inwido in the market. One of these initiatives is the spin out of a
new venture that should target the designated market segments in a so far unemployed
combination of channel, offerings, and target groups.
1.3 Research question
As the topic of this thesis addresses the examination of the organizational key chal-
lenges of strategic repositioning and it should be stressed that the author tries to espe-
cially highlight the challenges that might occur with regard to individual and organiza-
tional capabilities within the processes of strategic repositioning. As Ryan et al. (2007)
claim that theory on strategic repositioning is not very exhaustive also interrelated gen-
eral organizational challenges should be investigated further on. This approach will also
contribute to derive key challenges that can be applied as valid to SRP. Thus, the desig-
nated research question aims to contribute to close this academically gap. Hence, the
research question is stated as follows:
What are the perceived key challenges during an organization’s process of strategic
repositioning?
5
While chapter one introduces the reader in the general topic of the thesis, the overall
structure of the thesis can be described as follows: Firstly, the second chapter provides
an overview of the literature relating to SRP and interrelated key challenges, which will
close with a proposed conceptual framework. Secondly, an outline of the methodology
follows in the third chapter. Thirdly, the chapter four employs the story Inwido’s reposi-
tioning strategy, which is presented through several excerpts and statements out of sev-
eral conducted interviews. Also, secondary data sources are employed. In the fifth chap-
ter the gathered data is analyzed and the revision conceptual framework is proposed.
Finally, the sixth chapter employs the final conceptual model and a discussion of the
theoretical and practical implications is presented.
1.4 Purpose
This thesis studies the key challenges of strategic repositioning. It examines the ef-
forts of an Swedish based window and door multi-business manufacturer that employs a
conglomerate of several corporations (Inwido) to reposition itself as part of a process of
strategic renewal. Centred on an in-depth case study, the thesis proposes a framework
that addresses the main challenges of pursuing successful repositioning strategy.
The Inwido Group is a multinational Swedish based window and door manufac-
turer corporations and one of the largest manufacturer conglomerates of windows and
doors in Europe (Linden, 2012). During the last ten years Inwido grew from a company
with barely one billion SEK to a multi-brand (Appendix A1) and multi-market (Appen-
dix A1-A2) conglomerate with a turnover of over five billion SEK and 3200 employees
("Inwido Company Presentation," 2012). The organizational network of Inwido is based
on a through mergers and acquisition (M&A) grown conglomerate of formerly inde-
pendent companies (Linden, 2012). Historically, the window and door industry is char-
acterized by only incremental innovations, which are more or less based on product
quality improvements, cost reductions and additional service offerings (Linden, 2012).
Especially applied to Inwido, also valuable customer long-term relationship is lacking
(Linden, 2012). Responding to that Inwido’s ambition is to explicitly find more radical
innovation and to shift its focus from a supplier for windows and doors to a company
that predominately targets the end consumer market. To further pursue its on-going rad-
ically strategic change process towards an organic growth strategy a drastic reposition-
ing in terms of establishing a new strategic business unit (SBU) that targets the end-
consumer market with new products is considered (Appendix A3-A8).
6
Since the setting of the research, a spin out, was not established during the data col-
lection phase proposed challenges can be described as mostly individual perceptions of
the executives that took part in the data collection phase.
1.5 Key concepts
In an effort to construct a substantial understanding of the research question, the
key concepts will focus on the classification and determination of the term SRP, and
highlight key challenges of organizational change processes.
Apart from the Ryan et al. (2007) proposed framework for successful SRP this thesis
points out two other approaches to classify essential elements of SRP (Aggarwal &
Mudambi, 2005; Chan & Soong, 2011). This approach will also contribute to derive key
challenges of SRP, since one can claim that theory regarding this specific suspect is not
extensive (Ryan et al., 2007)
Adapting on this dearth of theory (Ryan et al., 2007) regarding the specific sus-
pect of SRP, the author also employs concepts and frameworks that address the key
challenges of general organizational change processes. Thus, the thesis is employs the
eight steps framework to lead change according to Kotter (1996), which can be also
recognized as a statement of key challenges that need to be recognized during organiza-
tional change processes (Phan, 2011). Additionally, insights of Waterman, Peters, and
Phillips (1980) (“The McKinsey 7S Framework”), Adner (2002) and Tripsas (2008),
Agarwal and Helfat (2009) are applied to gather various view on the challenges of
change processes.
7
2 Theoretical frame of reference
In this chapter the author presents the theoretical frame of the thesis, which results
in a proposed conceptual framework that served as fundamental conceptual frame for
the case study. The frame of reference embraces two major theory frame components,
which were selected in effort to reflect the major theoretical streams of the research
problem. Firstly, the author introduces the reader into the concept of strategic reposi-
tioning (SRP) (see chapter 2.2.) by classifying it under strategic change and further
framing it by the domain of strategic renewal (see chapter 2.1.). Secondly, a consolida-
tion of key challenges of strategic change processes is presented (see chapter 2.3.).
Thereby, the author decided to conduct a multi-stage conceptualization of presenting the
key challenges. This approach was chosen in acknowledgement of Ryan et al. (2007),
who propose that particular theory on SRP is not extensive, while literature regarding
challenges classified to the realm of strategic change and organizational change is repre-
sent in management literature in a broad range (Hannan & Freeman, 1984; Helfat et al.,
2009; Kelly & Amburgey, 1991; Rajagopalan & Spreitzer, 1997; Zajac, Kraatz, &
Bresser, 2000)
2.1 Strategic renewal
To define the term strategic repositioning an initial definition of what it means to be
strategic is useful (Agarwal & Helfat, 2009). They further refer to Rumelt, Schendel,
and Teece (1994) when they claim that the term strategic substantially relates to a firm’s
future prospects and if it has a critical impact on the firm’s success or failure. (Rumelt et
al., 1994, quotted from Agarwal and Helfat (2009), p. 281). Thus, a broad classification
of the term strategic repositioning under the term of strategic change (Ryan et al., 2007)
is undertaken in a first step. Ryan et al. (2007) are referring to G. Hamel (1996) when
they argue that strategic change can be perceived as synonym for radically redesigning a
company’s strategy. Furthermore, they stress that the reorientation of the strategic direc-
tion occurs in many forms in academic literature. According to Hofer and Schendel
(1978) strategic change embraces changes in the substance of a company’s strategy,
which is determined by its scope, resource utilizations, competitive advantages , and
synergy to other fundamental strategic entities (e.g. organizational structure and culture)
(Aggarwal & Mudambi, 2005; H.I. Ansoff, 1965; Ansoff & McDonnell, 1988; Dolan &
Garcia, 2002).
8
Ven and Poole (1995) and Rajagopalan and Spreitzer (1997) further propose
strategic change is defined as the organization's effort to align with its over time altering
external environment. Spector (2007) states that strategic change, though, should not
perceived as a singular concept. Accordingly, one can propose that a drastic environ-
mental change that affects the company’s progress as it is represented by the strategic
inflection point implies the requirement of a set of different strategic change initiatives.
A strategic inflection point can be described as a turning point in the company, the in-
dustry or sector, or the whole economy after which a dramatic change, affects the way a
company thinks and acts since the pre-existing rules of the business environment are no
longer valid (Michael H. Morris, Donald F. Kuratko, & Jeffrey G. Covin, 2010, pp.
208-209). Consequently, with regard to other authors Ryan et al. (2007) propose several
appearance of strategic change in theory and scholarly which are acknowledging the
broad scope of the term strategic change. Some of these appearances are: strategic in-
novation (V. Govindarajan & Gupta, 2001), transformational leadership (Ling, Simsek,
Lubatkin, & Veiga, 2008; Uhl-Bien, Marion, & McKelvey, 2007), turnaround processes
(Barker Iii & Duhaime, 1997; Hofer, 1980), organizational ambidexterity(O'Reilly III
& Tushman, 2011), collective and individual cognition (Eggers & Kaplan, 2009; Mezi-
as, Grinyer, & Guth, 2001; Tikkanen, Lamberg, Parvinen, & Kallunki, 2005), innova-
tion and business model innovation (Breiby & Wanberg, 2011; Calia, Guerrini, &
Moura, 2007; McDermott & O'Connor, 2002; Morris et al., 2005; Samavi et al., 2009;
Shafer, Smith, & Linder, 2005), dynamic capabilities (Barreto, 2010; Helfat et al.,
2009), competition, networks and alliances (Dittrich et al., 2007; Moore, 1993; Zott,
Amit, & Massa, 2011) dominant logic (Bettis & Prahalad, 1995) and also strategic re-
newal (Agarwal & Helfat, 2009; Kuratko et al., 2011). Thus, one can conclude that
there are several views on strategic change reflecting divergent assumptions on the par-
ticular scope of strategic change (Awa & Kalu, 2010; Biazzi, 2012; Church & Ware,
2000; Eggers & Kaplan, 2009; Fondas & Wiersema, 1997; Helfat et al., 2009; Mezias et
al., 2001; Ryan et al., 2007; Samavi et al., 2009; Swartzlander, 2012; Tripsas, 2008).
In a further step, the author refers to the conceptualization of Kuratko et al. (2011, p.
98), who constitute a narrow classification of SRP as an strategic initiative that is spe-
cifically dedicated to the domain of strategic renewal. According to Mische (2001) stra-
tegic renewal can be described as referring to a modification of an organization’s strate-
gy intending to regain sustainable competitive advantage. Furthermore, strategic renew-
al can be either incremental or transformational (G. Hamel, 1996).
9
While incremental strategic renewal basically comprises decisions to expand into
new product or service lines or to capture new market segments, transformational stra-
tegic renewal seeks to fundamentally redefine customer expectations, industry dynam-
ics, and/or the firms generic basis for competition(G. Hamel, 1996; Spector, 2007). Ku-
ratko et al. (2011, p. 98) claim that“…strategic renewal express elemental repositioning
efforts by the firm within its competitive space.” (Kuratko et al., 2011, p. 98). Accord-
ingly, the author recognised the need to delimit SRP from other generic strategic orien-
tations and to classify it under the domain of strategic renewal. Kuratko et al. (2011)
classify strategic renewal as one of five basic forms of strategic entrepreneurship.
Figure 1: Strategic Renewal as fundamental From of Strategic Entrepreneurship
(Kuratko et al., 2011)
The concept of strategic renewal was originally introduce by Ginsberg and Guth
(1990), who describe it as “the transformation of organizations trough renewal of the
key ideas on which they are built”. (Ginsberg & Guth, 1990, quotted from Kuratko et
al., (2011), p.98). Covin and Miles (1999) add a more specific market orientated per-
spective when they argue that strategic renewal describe a firm’s attempt “...to redefine
its relationship with its markets or industry competitors by fundamentally altering how
it competes.” (Covin & Miles, 1999, quotted from Kuratko et al., (2011), p.98). Not-
withstanding, Kuratko et al. (2011) stress out that not all newly adopted strategies
should be perceived as pursuing strategic renewal. Furthermore, they argue that new
strategies can be described as constituting strategic renewal when they express ele-
mental repositioning efforts by the firm within its competitive space (Kuratko et al.,
2011, p. 98).
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10
Kuratko et al. (2011) further argue that strategic renewal as entrepreneurial
event can take place on the firm’s corporate level or on business unit level in case of a
multi-business company. In the domain of strategic management the term “strategy” can
fundamentally classified according to its respective organizational scope (Alkhafaji,
2003; H. I. Ansoff, 1965; Welge & Al-Laham, 2003)
Figure 2: Classification of strategies according to Welge and Al-Laham (2003)
With reference to Michael E Porter (1987), Welge and Al-Laham (2003) claim
that the corporate strategy defines the generic orientation of the firm, which also im-
plies the determination of the SBU in their area of activity and the relationship among
them. A SBU describes a majorly autonomous division of a large corporation that runs
as an independent enterprise with a certain range of products or activities ("Definition of
Strategic Business Unit," 2013). Further Welge and Al-Laham (2003) argue that the
corporate strategy has to declare the portfolio of the SBUs and to allocate the resources
among them.
At the level of the competitive strategy or business strategy the orientation with-
in a specific SBU is determined. M. Porter (1985) proposes that the competitive strategy
seeks to develop and exploit a competitive advantage compared to the competition. The
competitive strategy is basically build on a focus of either cooperation or competition
(Child, Faulkner, & Tallman, 2005; Wheelen & Hunger, 2004). Reichel (2005) claims
that also the three general types of strategies – the generic strategies (Michael E. Porter,
1980), which are determined on the level of the competitive strategy. He further
acknowledges that the competitive strategy of each SBU can differ but is in general de-
ducted from the corporate strategy.
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33
Kind of research question
The design of the RQ was majorly affected by two main sources: Firstly, practical
implications from the designated research object; the internship company Inwido. Sec-
ondly, by past research and theory, which serves as guidance and source of predictions
(Library, 2003). With reference to Yin (2003, pp. 5-6), who basically classifies the type
of RQ according to the familiar series: “who,”, “what”, “where”, “how”, and “why.”,
the chosen RQ (“What are the major challenges during an organization’s process of
strategic repositioning?”) can be assumed as explanatory.
3.2 Data collection
Data collection methods
According to Holme, Solvang, and Nilsson (1997) the choice of methods for da-
ta collection is highly influenced by the research strategy (Ghannad, 2013). With refer-
ence to (Yin, 1994) there are six different sources of evidence in qualitative research:
documentation, archival records, interviews, direct observation, participant-observation,
and physical artefacts. Every dimension should be perceived as complementary to each
other, and has solely viewed no dominating advantage (Ghannad, 2013). This method,
in theory referred to as triangulation (Eisenhardt, 1989; Yin, 1994) or cross-
examination (Cheng, 2005), combines several sources (in general more than two) to
validate data concerning the same phenomenon (Bogdan & Biklen, 2007). Eisenhardt
(1989) proposes the employment of multiple investigators during interviews to simulta-
neously gather data by “interviewing, observing, and protocoling”. Potter (1996) argues
that triangulation is employed to validate that all the observations correspond to one
interpretation and that with this convergence of observations, which is employing many
different ”…sources, settings, and investigators the researcher can make powerful ar-
gument that the interpretation is robust…” (Potter, 1996, p. 153). Richardson (2005) is
criticising that triangulation assumes that there is a “fixed point” or “object” to trian-
gulate. Consequently, she is instead proposing the concept of crystallization, which
analogizes the fundamental characteristic of a “crystal”: viewing a “crystal” reveals
different images depending on how it is held, from what angle it is viewed, and the cur-
rent lightning conditions (Ghannad, 2013; Richardson, 2005). Thus, crystallization is
based on a variety of sources to get different views on the phenomenon, which implies
also the application of any secondary data available and the information provided by
different views on it.
34
Without declaring neither the triangulation nor the crystallization approach as
exclusively valid the author also tried to follow an approach of using multiple sources of
evidence and perceives that there are far more than ‘three sides’ from which to ap-
proach the world (Richardson, 2000). By approaching sources in various ways embrac-
ing interviews, follow-up interviews, ad-hoc questions regarding single aspects of the
same phenomenon, and experimenting with various communication media and commu-
nication time the author tried to create a multidimensional view on the research phe-
nomenon. Also, the it was made use of multiple investigators (Eisenhardt, 1989). In
applying interviews and documentation, basically two data collection method were em-
ployed. Additionally, a technique of observation was used as source to collect data.
Frankly, this source can be perceived as only minor contributing by majorly collecting
highly explorative and interpretative “soft” factors (e.g. interpretation of motivation or
fundamental attitude towards a specific phenomena according to anomaly in the answer
rhythm and structure).
To intergrade the „actors“ into the proposed “multiple view” conceptualizations
an ambidextrous approach was conducted. On the one hand, the idea of constructive
realism (Wallner, 1994) was applied to let the “actors” (e.g. interviewees, questionnaire
participants, etc.) tell their stories and share their experiences, which further implies the
need to attempt to discover the main “themes” from the constructed social reality of the
actors in the later analysis (Ghannad, 2013). On the other hand, pointed questions were
raised and the application of transmitting media was employed in an attempt to delimit
the actors from their social reality (e.g. emails, written interview, etc.).
Selection of data sources
To gather the information, which was identified as crucial and contributing various
sources were recognized as viable. As mentioned before the data collection method was
designed according to a multiple evidence approach. Thus, the selected data sources can
be fundamentally divided into primary and secondary data. Since this thesis was part of
a graduation project, which also embraced a business project at the designated subject
of the case study (Inwido), the author also used data sources that were gathered during
the development of the practical project. This approach can be perceived as an attempt
to harmonize practice and theory. Especially, as the executed business project can be
perceived as highly interrelated to the superposed theoretical domain of this thesis, as it
is strategic repositioning.
35
Hence, the use of overlapping data sources shall be perceived as the author’s
acknowledgement of the close relationship between theory and practice (Schanz, 1985,
1988). Consequently, one can refer to Mundt (2013), who proposed the following data
sources as relevant:
Primary data
The primary data consist of a total of six semi-structured initial face-to-face inter-
views with five different persons, three semi-structured in-depth interviews with two
people (which were part of the set-up of the initial interviewee group), several e-mails
to follow-up on certain topics, and informal discussions and meetings. Especially, dur-
ing the informal discussions and meetings but also during the initial face-to-face inter-
views the author also tried to observe the “actors” nonverbal language to gain highly
interpretative additional implications.
Secondary data
On the other hand, unpublished as well as published company information like
the companies Annual Reports, Inwido’s designated company presentation, a draft of
the official core values, and an internal document regarding the designated goals of In-
wido’s strategic renewal were used as data sources.
Operationalization and development
The below proposed dimensions and definitions should be recognized as an at-
tempt to visualize how the authors approached the key dimension of his research. The
table can be perceived as a visualized orientation during the data collection. It refers to
the work, findings, and theoretical conceptualizations of several researchers and scien-
tists. The general concept of SRP is defined by referring to the six elements framework
of Ryan et al. (2007). . The other dimensions are described by referring to various scien-
tists and researchers, who published findings and theoretical work about challenges of
organizational change, which also have implications for SRP. Talking about BM change
the classification of Cavalcante et al. (2011) was consulted, who classifies the superor-
dinated term BM change into four group: BM creation, BM extension, BM revision, and
BM termination. In a further research process the group BM creation/ BM innovation
(e.g. Christensen & Overdorf, 2000; De Cagna, 2010; Turner, 2003) was identified as
key concept to focus on.
36
Dimension Definition How to evaluate the concept
Strategic reposi-
tioning
The six elements framework for success-
ful repositioning: core strategic values,
strategic flexibility/learning capabilities,
customer awareness and sensitivity, ex-
ternal orientation, management commit-
ment, and belief in the product and brand
(Ryan et al., 2007);
Analyses of historical company in-
formation, interviewing strategic de-
cision-maker and person in key roles
with responsibility for employees
(e.g. marketing, operations, R&D)
Challenges of
strategic reposi-
tioning
Core strategic values, Belief in the prod-
uct and brand, Strategic flexibil-
ity/learning capabilities, Customer
awareness and sensitivity; External orien-
tation; Management Commitment; Strat-
egy; Culture; Business model; People;
Structure (Agarwal & Helfat, 2009; Chan
& Soong, 2011; Clayton M Christensen
& Overdorf, 2000; Kotter, 1996; Ryan,
Moroney, Geoghegan, & Cunningham,
2007; Turner, 2003)
Interviewing TMT and lower man-
agement via proposed “multiple
view” concept; single dimensions are
approached with raising pointed ques-
tions (e.g. Did the SRP process re-
vealed the need to employ additional
staff in key positions due to newly
occurring requirements?)
Table 2: Definition and Operationalization of concepts related to challenges of strategic
repositioning and BM change
Interview guide
The interview guides were developed according to the theoretical framework
proposed in chapter 2. As the research design was previously described as open for iter-
ative adaptions and shift also the interview guide was revised and refined after every
interview session and even within single interviews. Adapting to shifts in the research
focus the several interview guide drafts can be perceived as a result of probing and test-
ing in effort to get more relevant answers. In general the author decided to use the inter-
view guide more as an orienation to ensure that all dimensions of interest were exhaust-
ively approached. The interviews were more held like informal conversations than for-
mal and structured interviews (Marshall & Rossman, 1999, quotted from: Ghannad
37
(2013), p. 104). Drafts of an interview guide from the initial face-to-face interview
phase as well as one of the interview guide from the in-depth interview phase are in-
cluded in the Appendix
Overall, the author and his research team member tried to preserve a passive and
more informal role in effort to contribute to create an interview atmosphere that sup-
ports open talks and a feeling of comfortableness for the interviewee.
Interviews
For the interviews a set of crucial participants was assembled (see Appendix) which
should be interviewed by using both semi-structured as well as unstructured interviews
(Bryman & Bell, 2011). The participants were selected according to a method of pur-
posive sampling but also had slight implications of a method called snowball sampling
(Potter, 1996, quotted from: Ghannad (2013)). Snowball sampling can be perceived as a
concept that starts with a purposive sampling, which can be described as a technique to
identify and select key informants that provide the characteristics, according to the
needs of the developing analysis and emerging theory (Moorse, 2004). Furthermore, the
snowball sampling technique is based on a individual recommendation method, in
which every interviewee names additional respondents that can contribute according to
their set of characteristics (Moorse, 2004). Potter (1996) claims that this approach con-
tributes to increase our knowledge about the phenomenon under investigation (Potter,
1996, quotted from: Ghannad (2013)). Applied to the author’s case the initial interview-
ee, who also was the practical supervisor of the graduation project, named viable poten-
tial respondents during the early phase of data collection as well as during a phase when
the theoretical construct became much more distinct. Thus, the sampling method can be
perceived as a modified form of the snowball sampling technique. Based on this major-
ly, three interviewees, all members of the top management team (TMT) of Inwido were
identified as crucial data sources. Those three were approached repeatedly incorporating
the previously mentioned diversified application of interview techniques and media to
add more “angles” to the investigation (Ghannad, 2013).
Since two interviewers conducted the interviews also the technique of unique indi-
vidual roles (Eisenhardt, 1989) was employed. During conducting the interviews this
tactic was applied in terms of using on main interviewer while the other team member
took notes of both the responses as well as the observations. These roles could change
between and even within the single interviews.
38
In this context both team members, could contribute to the conversation within a
subject area of specific individual interest. All interviews were audio-recorded with pro-
spect of potential to follow-up questions.
3.3 Method for data analysis
Figure 9: Conceptual draft of data analysis method, adapted from Ghannad (2013)
According to (Miles & Huberman, 1994) the process of qualitative data analysis
involves three interrelated/synchronized activity streams: data reduction, data display,
and conclusion drawing.
Data reduction can be described as process of selecting, focusing, simplifying,
abstracting and transforming (Ghannad, 2013) the data gathered trough field-notes or
transcriptions. Ghannad (2013) further argues that the process of data reduction even
starts before the data collection (e.g. the chosen conceptual framework or the type of
research question) and that it should be perceived as a part of the analysis process and
not as a separate process. Thus, the reduction process of the empirical data starts while
conducting the data and not afterwards.
Data display can be pictured as the process to organize and compress the data that has
been captured via unreduced and extended field-notes. The researcher has to read-
through, scan-through, and attaches coding to the extended field-notes.
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39
The author of this thesis applied a form of “lean coding”, which means that at
every stage of the data analysis process only a few themes or categories (five to seven)
were used to cluster the findings (Creswell, 2007; Saldana, 2009). The author identified
three main themes (SRP, BM creation/innovation, Challenges of change processes) and
several sup-groups (dimensions of a successful SRP, components of BM innovation,
etc.). Although, theses theme cluster changed during the data collection process due to
the iterative research design, the identified themes can be pictured as reflecting the con-
ceptual frame of references, which also shifted within the case study.
Conclusion drawing embraces the process in which the researcher should begin
to finalize his thoughts about the meaning of the findings by noting down patterns, ex-
planations, causal flows, and propositions. The results of the author’s conclusion draw-
ing of this research can be found in the chapter “Analysis and discussion”.
Overall, Eisenhardt (1989) describes the process of data analysis as less stand-
ardized, most difficult and unstructured part of qualitative research. She further suggest
two patterns: within-case analysis and cross-case analysis. As this case is based on the
findings of one single organization the author was limited to the within-case analysis.
To identify the key challenges of SRP the author followed an approach of com-
bining theoretical findings (Agarwal & Helfat, 2009; Aggarwal & Mudambi, 2005;
Chan & Soong, 2011; Kotter, 1996; Ryan et al., 2007; Turner, 2003; Waterman et al.,
1980) with practical implications. The chosen approach was identified as mostly suita-
ble to contribute to the established literature. The data that refer to an under-specified
challenge was gathered and clustered in effort to allow the author to suggest newly
identified key challenges as outcome of his analysis (chapter 5).
40
Figure 10: The overall research path (marked in bold) of the study, adapted from Ghannad
(2013)
3.4 Reflections of method choices
Historically, qualitative research was commonly criticised to be imprecise and was
lacking objectivity (Yin, 1989). Regardless the proclaimed development and establish-
ment of qualitative research methods, which are nowadays commonly acknowledged as
providing a more detailed description of the often complex structures around research
objects and the interrelated research context (Lamnek, 1988), the author agrees with
critics that there is still the risk of a too narrow interpretation of the surveyed data
(Eisenhardt, 1989; Yin, 1989).. Especially, in consideration of the limited capacity of
people as information processors (Eisenhardt, 1989).
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41
On the other hand the chosen research design assist to also survey “soft” data of the
interviewees (e.g. behaviour before or while answering a question, the request to revise
their given answer, or the amount and duration of breaks before and during the answer,
etc.) (Eisenhardt, 1989). Since the master thesis tries to analyse the challenges that
might occur and affect the strategic repositioning process the author assumes that espe-
cially “soft” and implicit data can reveal major implications. Especially, as people relat-
ed challenges can be perceived as crucial during change processes in general (e.g. moti-
vation and involvement of people in and inertia against the proposed change processes,
influence and commitment of the CEO) (Agarwal, Echambadi, Franco, & Sarkar, 2004;
Christensen & Overdorf, 2000). With reference to Lamnek (1988) the chosen method
also provides the openness to develop a promoting relationship between research object
and researcher, to use a variety of data collection and evaluation methods, and to adapt
according to the situation (e.g. raise additional question within a semi-structured inter-
view, etc.) (Eisenhardt, 1989).
Since the chosen topic of the master thesis has not been empirically analysed so far,
the author assumes that the case study as qualitative research method can be perceived
as mostly beneficial to analyse the designated topic. On the one hand, a case study will
provide more extensive insights into the research object, which will contribute to serve
the explorative character of the topic and the chosen research question. On the other
hand, a case study is identified as mostly suitable to contribute to the existing theory
around strategic repositioning and BM change process, by also revealing the potential of
collecting the prior mentioned “soft” data.
In general the author struggled to take assumption regarding the scientific quality
criteria (Yin, 1989) of the case study beforehand the actual data collection phase. The
two dimensions of validity and reliability of the case study, could not satisfactory be
examined in the initial stages of the research process. The term validity basically de-
scribes the effective fit between the characteristic desired to examine and the character-
istic examined indeed. The choice and application of viable data sources and instru-
ments of investigation generally represent the reliability of a case study.
42
Furthermore, the author had to clarify that the case study was not conducted in an
effort to provide statistically valid and significantly proven results regarding the rela-
tionship of the determined variables. With reference to Bryman and Bell (2011), the
author further would like to propose that a case study approach in general should not be
perceived as a single source to deduce general applicability. Thus, also the proposed
theoretical model developed in this case study cannot raise the claim to be general ap-
plicable. Notwithstanding, there is the potential to amplify the findings with additional
qualitative and quantitative research to harmonize the concept with the claim for gener-
alization.
43
4 Presentation of results
In this chapter the reader shall be introduced in the information that was gathered
throughout the different stages of the data collection process. The information gathered
was classified according to the conceptual frame and will thus be presented under the
headings that were chosen to describe the theoretical framework. To enhance the read-
ers understanding of Inwido’s current situation some further aspects should be stressed
out, which should provide brief insights in Inwido’s business environment and the on-
going organizational change processes.
4.1 Repositioning in practice: A case study of Inwido
The Inwido Group is a multinational Swedish based window and door manufacturer
corporations and one of the largest manufacturer conglomerates of windows and doors
in Europe (Linden, 2012c). During the last ten years Inwido grew from a company with
barely one billion SEK to a multi-brand (see Appendix A1) and multi-market (see Ap-
pendix A2) conglomerate with a turnover of over five billion SEK and 3200 employees
(Linden, 2012b).
Figure 11: Structured growth through acquisitions ("Inwido Company Presentation," 2012)
Confidential
2012-12-12 3
Figure 1. Inwido growth path through acquisitions.
Figure 2. Inwido’s brand portfolio.
Swedish expansion
- Smaller add-ons
- Focus on brand
names and product
portfolio
- Sales EUR 110m
1996-1999
How it all began
- Merger of
Myresjöfönster and
Elitfönster
- New management
team
- Sales EUR 45m
2000-2004 2010-2012
One Group strategy
- Implementation of
consumer-oriented
strategy
- 100 % ownership
of all acquired
companies
- Greenfield plans for
selected European
markets
2005-2009
Nordic expansion
- Acquiring leading
local brands
- Sourcing synergies
- Entry into selected
European markets
- Sales EUR 500m
44
The growth was basically built on a strategy of successfully acquiring small and
medium-sized enterprises (SME) in same or immediately related industry, while the
focus of this acquisitions was aiming to enhance the economies of scale of the existing
business (Jeppsson, 2012b). Thus, the organizational network of Inwido is based on a
through mergers and acquisition (M&A) grown conglomerate of formerly independent
companies (Linden, 2012). A strategic inflection point caused by the economic crisis of
2008 largely affected Inwido’s historically so far successful dominant logic. As the dur-
ing this time new employed CEO, Hakan Jeppsson, stated in an official company report
that although the economic decline was expected in most parts of the world, Inwido
could not predict how difficult the conditions for the Inwido Group would become
(Jeppsson, 2010). When he in early 2009 realized that, as for the most companies, the
environmental conditions affected by a deep global recession and financial crisis were
radically different (Jeppsson, 2010). Nonetheless, this year also was characterized by
the completion of Inwido’s process of reviewing the strategy for the coming years. This
process resulted in a renewal of Inwido’s vision and mission:
Inwido’s vision of 2006, two years before the strategic inflection point and the conduct-
ed strategic renewal process:
“Letting in the light – the one-stop-shop for closing the building”
("Inwido's Annual Report 2006," 2007)
Inwido’s vision since 2009, outcome of the process of strategic renewal and guideline
for Inwido’s strategic repositioning:
“We will be Europe’s leading supplier of environmentally friendly wood-based win-
dows and doors by focusing our resources, products and services on
people’s needs. By always assuming the consumer perspective we improve people’s
well-being”
(Jeppsson, 2010)
45
According to Inwido’s vision they desired to develop from producing windows
and doors to improving people’s well-being (Jeppsson, 2010). By focusing on offers to
the markets that should reflect the most innovative products and services in several con-
sumer trend-areas (according to:"The Nordic Trend Report," 2012: environment, cost of
living, design, security and comfort) Inwido pursued a strategy to differentiate its posi-
tion in the market by drastically altering its several product-market combinations. To
avoid the price pressure caused by the industry’s highly focus on production and capaci-
ty (e.g. most of the competition lowered their prices to increase volumes Jeppsson
(2010)), which led to decreasing margins, Inwido raised the ambition to become more
user and consumer oriented company.
“… going from a supplier to the building material industry to… a company of
consumer products. And that is for us a long process that will take time….” (A8)
Furthermore, a process of organizational restructuring was established to be create a
more coordinated group that employs economies of scale in purchasing, product devel-
opment, production and finance (Jeppsson, 2010). Also, it was proclaimed to exploit
Inwido’s existing expertise across company boundaries and national borders.
Among other initiatives, a light-matrix structure was established, several additionally
key functions were employed, and personal was exchanged to develop the capabilities
needed to foster the begun strategic change processes ("Inwido Company Presentation,"
2012; Jeppsson, 2010; Linden, 2012; see also Appendix A4-A9)
46
Figure 12: Inwido’s “Light-Matrix” Structure ("Inwido Company Presentation," 2012)
In the following, Inwido established BA Home Improvement & Supply in effort
to diversify its offering in comparison to the competitive environment. The BA Home
Improvement & Supply was a combined SBU that embraced a set of small companies
that sold a range of different interior products for the home to the end-consumer. It also
embraced, several small manufacturing firms that operated as a vertically integrated
supply organization to the Inwido Group but also to external customers. ("Inwido's An-
nual Report 2011," 2012). According to proposed strategic misfits ("Inwido sells Home
Improvement business area," 2012) the Home Improvement part of the combined SBU
was sold in 2012. Although Home Improvement embraced designated end-consumer
companies ("Inwido's Annual Report 2009," 2010; "Inwido's Annual Report 2010,"
2011; "Inwido's Annual Report 2011," 2012), it did not fit with Inwido’s future plans
(see also Appendix A7-A8):
"Inwido's focus is to be the leader in Europe within windows and doors. We
have therefore decided to sell this business area since it is a retail operation
with a totally different business model and therefore offers no economies of
scale with our other operations." (Jeppsson, 2012b)
Dezentralized business responsibilities
HR, Organization
& Sustainability
Finance &
Administration
Sweden Denmark EME Finland Norway
Marketing, Sales
&
Communication
Operations &
Development
CEO
UK
Ireland
Poland
Russia
Consumer
Industry
Group Function
Business Area
Market segments
!
47
“…we thought we can complement their product range and then take their expe-
rience in accessories…but there was never a real connection between windows
and their product range established.” (A8)
“Those products were sold differently then windows and doors…it was a differ-
ent business…I mean if we have had come further with the development with this
company I think we could have seen more synergies.” (A7)
At about the same time the divestment process was conducted, Inwido launched
its corporate core values, which are closely linked to the ambition and mission of In-
wido to become a consumer-driven company that fosters organic growth (Jeppsson,
2012a, 2013; Linden, 2012). Proposed as daily guidance for leaders and employees on
how to think and act and in prospect to continually develop as an organization Inwido
launched the following three corporate values in the end of 2011:
Inwido’s Core Values (Wessner, 2013):
1. Consumer in mind
2
2. Courage to improve
3
3. Competent people
4
Today Inwido’s corporate network embraces twenty brands that are settled in two
superordinated market segments (end-consumer and industrial customer).
2
We want everyone to have the insight and to have an end-user mindset throughout the whole Inwido
organization. (Wessner, 2013).
3
We are prepared to make changes in time, and make these changes to fulfill our company strategy and
goals. (Wessner, 2013).
4
We need honest feedback, and openness as a way of behaving even when giving feedback, rather than
avoiding the difficult subjects (Wessner, 2013).
48
Figure 13: Inwido’s Brand Portfolio ("Inwido Company Presentation," 2012)
Thereby, a set of channels is used to reach the particular target group (Consumer
markets: Direct, Middleman Retail; Industrial markets: Construction and House facto-
ries) ("Inwido Company Presentation," 2012).
Figure 14: Inwido’s business structure – Brands, Segments, Channels, and Offerings
("Inwido Company Presentation," 2012)
Historically the window and door industry is characterized by only incremental
innovations, which are more or less based on product quality improvements, cost reduc-
tions and additional service offerings (Linden, 2012).
Confidential
8
Figure 1. Inwido growth path through acquisitions.
Figure 2. Inwido’s brand portfolio.
Swedish
expansion
Smaller add-ons
Focus on brand
names and
product portfolio
Sales EUR
110m
1996-1999
How it all began
Merger of
Myresjöfönster
and Elitfönster
New
management
team
Sales EUR 45m
2000-2004 2010-2012
One Group
strategy
Implementation
of consumer-
oriented strategy
100 %
ownership of all
acquired
companies
Greenfield plans
2005-2009
Nordic
expansion
Acquiring
leading local
brands
Sourcing
synergies
Entry into
selected
European
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49
As response the subject of Inwido’s renewed strategic orientation stresses the fo-
cus on dynamic innovation and internal growth, which explicitly stresses the importance
to find more radical innovation and once again to shift its focus from a supplier for win-
dows and doors to a company that predominately targets the end consumer market
(Jeppsson, 2013; Linden, 2012; see also Appendix A4-A8). As one of the latest initia-
tives that pinpoint the strategic reorientation Inwido launched a cooperative initiative
(“Inwido Compete and Incubate Innovation Challenge”) together with a business incu-
bator ("Ideon Innovation startar innovationstävling med Inwido," 2012; Jeppsson,
2013).
In general Inwido’s management team seems to have understood the new strate-
gic orientation and the importance of innovation for organic growth the desired results
are lacking (Linden, 2012).
“… I think we're at the stage where we have created an internal understanding
of what it means to be… having…that's one of our core values…the ‘consumer
in mind’…it is…not only our customer in mind, which is often business to busi-
ness.” (A8)
Linden (2012) further propose that Inwido’s problem is not its organization’s innovation
capabilities it is more that no common comprehension, standardized process or frame-
work exists of how to drive innovation internally (Linden, 2012, p. 10).
“It [product development process] takes too much time, the process is too long.
We need to shorten it to be able to take it quicker to market. (A4)
Cross-brand synergy effects are rarely and each BA is more or less working sep-
arately and independent with regards to the development of innovation (Linden, 2012;
see also Appendix A4-A6). As a result the innovation implemented can still be per-
ceived as incremental and occasionally (Linden, 2012; see also Appendix A4-A6). Also,
a valuable customer long-term relationship is still missing (Linden, 2012).
To grow Inwido organically it is crucial to establish an approach to reallocate the
existing innovation capabilities to systematically drive the needed change towards In-
iwido’s proclaimed strategic goals:
50
Figure 15: Inwido’s strategic goals ("Inwido Company Presentation," 2012)
To proactively pursue Inwido’s organic growth further by launching innovation
more constantly and establish a valuable CR to foster the realization of a consumer-
driven company one can claim for new shift in Inwido’s dominant logic .
“We often talk about having different approach but when it comes to the actions
we are still using same terminology. We are still approaching the customers in
the same way….but to be able to get the right people you need to have to under-
stand: Where are we? What are we focusing on? What are the needs that our
customers have? … We definitely have a challenge internally that we need to
solve…a new way of thinking.”(A4)
In effort to drastically changing its collective cognitive orientation to develop the
organizational capability that are required to become a company, which has “the con-
sumer in mind” (Appendix A8), Inwido considerably undergoes a new process of stra-
tegic repositioning.
1. Grow with profitability in Europe
2. Operational excellence through group co-
operation
3. Establish a sales driven consumer company
4. Innovative solutions
5. The best people for the business
!"
51
This new process of SRP embraces several interrelated change initiatives to fos-
ter the set of proclaimed strategic goals. One of these initiatives particularly represents
the research setting of this thesis:
“So, we have to find something else…so, we talk about accessories today and I
think we have an opportunity there because no one else is focusing on that: ac-
cessories….I think it is about increasing the speed of doing things...by build up
an organisation that is very agile and flexible and the time to market is very
short and focused on accessories…” ("Inwido's new venture plan.," 2013)
Inwido’s idea consist basically of spinning out a new venture that enters the
markets to develop a so far underexplored product-market combination and increases
the innovation speed of Inwido by employing new sales channels (Appendix A4-A9),
establishing a valuable customer relationship (Appendix A6-A9), and exploiting the
corporate capabilities and combining them with external capabilities in unemploeyed
manner.
“A Platform where you can probe and learn how social media work… Learn
how to convert site visitors to costumers…” ("Inwido's New Sales Platform,"
2012)
“…design it…to establish a valuable and beneficially sustainable long-term
consumer relationship…to integrate the consumer in a more dynamic
way…educate them.” ("Interview: The new venture - requirments regarding a
SRP," 2013)
“…we should start a new venture…and use external knowledge to come up with
new ideas and new products because our current knowledge is actually a big
barrier for us to innovate...”. ("Inwido's new venture plan.," 2013)
According to the VP R&D of Inwido AB, who can be recognized as initiator and
entrepreneurial champion of the new venture project, the idea basically addresses a
creation new product-market combination that characterizes a SRP (see 2.2). It shall
focus on introducing new products and/or services to the market, which should differ
substantially from the current product portfolio and the competitive offerings, whereby
Inwido also highlighted the difference in requirements regarding the value chain/value
creation process:
52
“So, we have to find something else… build up an organisation that is very agile
and flexible and the time to market is very short and focused on accessories…”
("Inwido's new venture plan.," 2013)
4.2 Key challenges
In this chapter the author tries to present the gathered data that can be related to the
strategic decisions that had taken place at Inwido regarding their pursued strategic re-
newal, which includes an initiative dedicated to SRP (see chapter 4.1) These strategic
decisions should be perceived as either immediately affecting the currently on-going
process of SRP or providing implications about challenges that occurred in the past or
might occur in the future. The interviews and meetings took place during a simultane-
ously conducted business project, which was focused on the conceptualization of the
spinout as a partially or fully owned new venture.
Regardless the fact that the responsible executives consistently support the plan
to spinout a new venture they stressed several main challenges, which should be per-
ceived as based on their own experiences and perceptions. Thereby, the mentioned chal-
lenges are either dedicated to the overall aspect of Inwido’s capabilities to carry the de-
sired strategic changes or directly related to the spinout plan that should implement the
desired changes in terms of SRP.
Especially, the challenge of establishing a valuable customer relationship (CR) is identi-
fied as crucial:
“Retailers would like to protect their consumer information because that is the in-
formation of power, and that is one of our main obstacles. We would like to get
closer to end consumer; first know who it is, than to interact with them more often
so we can sell accessories between windows being exchanged.” (A5)
As proposed (see previous chapter 2.1-2.2.) a SRP that should provide the potential for
long-term success has to reflect the strategic fit to the overall strategy of the firm. Thus,
it should be considered that a SRP also implies to question the design of viable BM that
best serves the pursued goals:
“Since we have been successful we should stick to that but I also think we have
to try and test new ways of doing business…develop a new business model…is
necessary for the future!” (A6)
53
“I mean we have a direct business model…but we have also some channels, es-
pecially the retail channel, which is under strain…and our question is if they are
actually bringing some value here!?...Either we need to develop them [business
models] together with them [retailers] or we need to challenge them [chan-
nels]…(A7)
Thereby, Inwido also highlighted a challenge that has major impacts on the stra-
tegic decision-making and thus on the design of the SBU’s strategy, which was not rec-
ognized in the theoretical framework as potentially affecting the strategic decision-
making process before: the image aspect of cross-brand strategies. Thus, a SRP should
consider the threat that offered products or services potentially might affect the existing
brand images in an unbeneficial way ("Interview: The new venture - requirments re-
garding a SRP," 2013):
“…a…sandbox where you can test new things rapidly without… risk to destroy
the value of any of our existing brands” (A6)
“…an obstacle can be if its start being really connected with our core brands
the window and door business then of course it will be a… it will put a lock on
the ideas that come in because then we have to monitor that it not negatively af-
fect the brand values and it always has to go along with our brand…..”(A8)
“…our brand, names and so on, the model and what can be sold and how we do
it and everything. Just to secure that our brands are not… maybe mixed and
connected too much with new ideas … We have to define a good setup there but
them I'm up for it!”(A8)
Another aspect that stresses out the key challenges of developing a fitting strate-
gy to pursue a SRP is based on the early historical development, which was dominated
by sale of Inwido ‘s Home Improvement BA due to strategic misfits ("Inwido sells
Home Improvement business area," 2012). Thereby, another main challenge was high-
lighted that was rejected in the conceptual framework. While considering the overall
strategy as guiding framework in itself, it has also hindering impacts. Especially for a
SBU, which business is not immediately related to the established CBUs. As it can be
identified by comparing Inwido’s official, vision and designated strategic core values
and a statement of an executive talking about the reasons for the divestment in the
Home Improvement BA:
54
“…we thought we can complement their product range and then take their ex-
perience in accessories…but there was never a real connection between win-
dows and their product range established.” (A8)
“Those products were sold differently then windows and doors…it was a differ-
ent business.” (A7)
With reference to the sale of the Home Improvement BA in 2011, which could
be perceived as designated consumer SBU ("Inwido's Annual Report 2010," 2011), one
can claim that a SRP that is designed to pursue a consumer-driven initiative could face
the major challenge of a short-term misfit with the overall strategy and designated core
value:
“…I mean if we have had come further with the development with this company
I think we could have seen more synergies.” (A7)
“We are proactive and strive to be in the front line of innovation in everything
we do” ("Inwido Company Presentation," 2012)
As acknowledged by the author in the theoretical framework, also Inwido acknowl-
edged the business model as attributed with a broader scope than a solely focus on man-
aging the various revenue stream of their network of different SBUs. It can be assumed
that the BM is acknowledged as practical application of the guiding strategy. Further, it
can be argued that Inwido identified the BM also as reflecting external occurring chal-
lenges:
“I think it is about increasing the speed of doing things... I think speed is the key to
this business model and time to market…”("Interview: The new venture - re-
quirments regarding a SRP," 2013)
“We are too slow on the trigger and we are too slow on the implementation. If we
could find a more direct model that we could faster to the customer with faster re-
sponses…” (A5)
“…let the consumer be aware of what is possible…maybe the price is not that im-
portant of that kind of solution it’s more…look for new ideas…”("Interview: The
new venture - requirments regarding a SRP," 2013)
55
Especially lacking individual competences were identified as crucial challenges that
need to be overcome to pursue the processes to perform the designated strategic renew-
al:
“We haven't got the competence in quite a few areas. We're lacking…I wouldn't say
completely lacking but we have so little of them that they are so broadly spread all
over the company.” (A7)
But also organizational capabilities in terms of the organisations absorptive capacity
5
were identified as elemental challenges:
“We often talk about having different approach but when it comes to the actions
we are still using same terminology. We are still approaching the customers in
the same way….but to be able to get the right people you need to have to under-
stand: Where are we? What are we focusing on? What are the needs that our
customers have? … We definitely have a challenge internally that we need to
solve…a new way of thinking.”(A4)
But also the need for dynamic resources was recognized as challenge when pursuing a
of heuristically designed strategic renewal.
“We talk about resources, currently I don’t see that we don’t have the
resources necessary to be able to start this journey.” (6 A3)
Whereby again the intangible resources, especially knowledge, was emphasized:
We need a better understanding on why we do it and how we should do
it and why it is important.” (A4)
Furthermore, it was stressed that Inwido perceive the challenge to manage organiza-
tional capabilities as largely attached to human resource management (HRM). Also, it
was emphasized that the implementation of vertical processes
6
aiming to educate and
train the desired competences should be pursued to overcome the challenge of lacking
individual and organizational capabilities:
5
Absorptive capacity can be described as „...the ability of a firm to recognize the value of new, external information,
assimilate it, and apply it to commercial ends is critical to its innovative capabilities.“ (Cohen & Levinthal, 1990, p.
128)
6
A vertical process refers to a process that drives the flow of knowledge . (Wiest, 2011 according to: Snider & Nis-
sen, 2003)
56
“…we have gaps in competence…we need either to do educate the ones we have or
we need to take out old competence and exchange that to new competence. (A9)
Finally, Inwido perceive the challenge of capability also as a challenge of allocating
the existing competences and resources:
“…they are so broadly spread all over the company. So you don't really get the gain of
them [people with competence]. Since they are not allowed to focus on the areas where
they really can make a change.” (A7)
The element “people” was identified as revealing several challenges regarding
the pursued strategic change processes, which also embrace several other aspects that
can be perceived as immediately related to the human dimension within organizations
(e.g. lacking motivation of people, need for situative leadership skills, etc.). Manage-
ment and employees were it was identified as both main challenge and central mean to
pursue change:
“You need to get people on board and understand why change is necessary. Be-
cause most people perceive change as threatening…. I think this is the chal-
lenge, which I like. It is fun to see people get glimmer in the eyes when they un-
derstand that change is actually an opportunity.” (A7)
“Internally of course there are several challenges, one of them being the hesi-
tance of people to change… So I'm sure we have to do a lot more in that making
people understand the ‘Whys’ the ‘Whats’ and the ‘Hows’.” (A9)
Also, the challenge of carrying a certain profile of individual capabilities that
would be needed to participate in the strategic change processes was identified:
“And we are doing that…I would say we have done that over the past three years to
change...the top sixty managers within the company, like I think we have exchanged
forty of those...”(A9)
57
A great emphasis was put on issues concerning the leadership capabilities of
persons, who are mainly responsible to motivate people to actively participate in change
processes and to live the proclaimed core values to affect the attitude towards strategic
renewal:
“…I mean we are at least aware of obstacles and also aware of the importance
to motivate people and to get people on board when you're doing changes, so
and then of course it always comes down to each individual leaders and how
well they know their people and how well they manage them…. I mean we tried
to motivate or incentivize the ones that are moving change the most of course.””
(A9)
Although it was stated that rewarding and incentivizing people was not core of
the company’s culture in the past, individual rewards where identified as essentially
contributing to overcome the challenge of motivating people for participating in change
processes:
“I mean all the people that have worked within this company for 25 years are
used to doing things in a certain way. And getting them motivated to do things
differently, I think, is a great barrier.” (A7)
”…I mean there has been sales competition started and other kinds of competi-
tions… since the last three years, we're also rewarding the best Inwido business
area every year and so on…I'm sure there's more we could do on that
part…Definitely, I'm sure that the, we do not live in a culture that is used to
those kind of individual rewards. That is not been the way that you have tradi-
tionally geared the people in the company…” (A9)
Inwido investigates the involvement of the management laso as a hindrance for
the development and motivation of the individual, which is needed to facilitate a SRP.
Especially, if considering the aspect that conducting a SRP that aims to create a new
product-market combination cannot or only slightly draw back on existing knowledge
Thus, decisions cannot be taken on previous experiences and imply a degree of novelty,
which can substantially differ from acknowledged and proven decisions and procedures:
58
“The management is too involved in the daily activities! If the manager are in-
volved in everything suddenly you're very scared of doing something… It becomes very
static… and then you are afraid of taking the decisions…your own decisions.”(A6)
A specifically motivating role can be attributed to the CEO as incubator and
champion of the overall strategic direction of Inwido. As impersonation of the guiding
strategy the CEO has not only implications for the design process of the strategic orien-
tation but also major impact on pursuing the development of the strategic objectives
further (e.g. employing or reallocating the needed capabilities in a particular area, etc.):
“Our CEO Håkan Jepsson of course had a vision of where he wants to go and
what he wants us to be good at…” (A4)
“The change that has been made with the new CEO, there has been huge differ-
ence compare to how it was before. For both good and bad…(A5)
“Yes, I was the first one Håkan [CEO] employed. I think he looked for someone
with my capabilities. (A7)”
Main challenges that might occur regarding the concrete SRP initiative to spin
out a part of Inwido’s business were discussed, which were acknowledging that
knowledge and capabilities have to be looked at from a bilateral perspective:
“I think it will take a vey long time to change the current way of doing things
here at Inwido…our current knowledge is actually a big barrier for us to inno-
vate... So therefore, we have to start something new with new fresh people that
don’t have that barriers.” ("Inwido's new venture plan.," 2013)
“… doing it outside is…. there I think it could be tricky if you doing it with new
people without knowledge about the industry… it could be failure so it's very
important that you leverage the knowledge we already have.” (A6)
Especially, to amplify the implementation of the new core values that should
help to support the realization of the strategic renewal the organizational structure can
be perceived as hindrance:
“...to be able to put…more emphasis on the change and that it was necessary and
59
that it was necessary to get things done quite quickly. There has to be an organi-
zational [structural] change.” (A9)
The challenge of organizational structure is furthermore perceived as an contin-
uously on-going change. Moreover, it was assumed that an organizational structure has
to increasingly adapt to the requirements that the future might reveal:
“I'm not sure that the light-matrix will be able to facilitate the whole journey, so
to say… but I would say within the next three to five years there would have to
be additional organizational changes to really, really get this going.” (A9)
“…to be able to be really effective in that end of our business…I think we need
a more centralized approach to…it's a few years from now but I think we're
heading in that direction …”(A7)
Contrary it was questioned if a centralization of the decision-making process
should really be perceived as contributing to establish a consumer-driven organization
that not only reacts to changes in the environment but also proactively affects those
changes Thus, the structure also largely affects the efficiency of organizational process-
es:
“…looking at the possibility maybe to have a company outside of Inwido or
handling innovation so you won’t get stuck in the bureaucracy within the com-
pany…as I said the organizations becomes more complex because you need to
consider all aspects of the organization. (A4)
Moreover, the structure of the organization was identified as serving as support-
ing framework of cultural change. While the people inside the organization can be per-
ceived as “processors” and “carriers” of the proclaimed organizational vision, strategy,
culture and core values the structure of the organization provides the infrastructure.
60
Thus, the structure was recognized as largely influencing the organizational penetration
of these designated dimensions of strategic planning
7
.
“Well, as you know, we have the strategy to go from a production-driven com-
pany culture to a consumer-driven company culture. Of course it needs to be
driven by different things - among them, the organization.” (A7)
“…the light-matrix then was introduced…to be able to reach our mission and
vision…because historically all those kind of questions have been within the lo-
cal management team and we don't…I mean it will take too long for all those
questions to be taken.” (A7)
Inwido acknowledges culture as general facilitator of change. On the one hand,
it can be perceived as affecting the organizations absorptive capacity and what is com-
monly perceived as taken for granted. On the other hand, it describe the general shared
mind-set and core values:
“I mean we are coming from this production cultural background…different
production facilities that are somewhere in the middle of nowhere where people
are more or less like: they want to stay there, they need a job and our factories
are almost the only choice they have…” (A9)
Equally to the main challenge “structure” the dimension “culture” provides a su-
perordinated area in which the certain characteristic of change can take place. Moreover
the culture is rebuilding itself during the whole strategic renewal process. Consequently,
the outcome of strategic renewal can also result in an evolved culture. The proclaimed
process can be pictured by screening the following statements by an executive, who
accompanied the change process from the earliest hour (A9):
“I would say that the traditional culture was very much, actually, the produc-
tion orientation. I mean we've sold what we could produce…I think that has
been the traditional culture… The culture we're in right now is in between cul-
tures I would say.” (A9)
7
Strategic planning as process of determining an organization’s strategy embraces several key components. Among
others, (P. Kotler et al., 2009) propose the key components: vision, mission, values, strategy, and culture as heuris-
tically integrated component.
61
“…we are changing the culture. The culture from before would not allow this
change but since we are changing the culture. I mean that's part of the whole
strategy process.” (A9)
“…it's not been implemented I would say. But the culture we are driving to is of
course, to have a consumer orientation and happy to become a consumer orien-
tated company...” (A9)
62
5 Analysis and discussion
This chapter is structured as follows: Firstly, in respect of the prosed theoretical
frame of references the author is evaluating if Inwido’s process of strategic change and
strategic renewal can also be classified as embracing the characteristics of SRP. There-
fore, the author decided to relate the development process of Inwido’s early history (see
chapter 4.1) with the proposed interpretation of SRP (see chapter 2.1.-2.3.) as subordi-
nated concept dedicated to the domain of strategic renewal. The latter, as corresponding
part of strategic entrepreneurship (Kuratko et al., 2011), can again be classified as con-
cept belonging to the framing area of strategic change. Secondly, the chapter 5.3 pre-
sents the analysed interview data to compare the identified practical challenges with the
proposed conceptual framework (see chapter 2.3.2.) in effort to test if the model holds.
Thirdly, a revised conceptual model is presented as final outcome of the case study.
5.1 Strategic renewal
Strategic change can be perceived as synonym for radically redesigning the generic
substance of a company’s strategy, which is determined by its scope, resource utiliza-
tions, competitive advantages, and synergy to other fundamental strategic entities stra-
tegic concepts and areas (e.g. strategy, culture, organizational structure, core values)
(Aggarwal & Mudambi, 2005; Ansoff, 1957; H.I. Ansoff, 1965; Dolan & Garcia, 2002;
G. Hamel, 1996; Hofer, 1980; Hofer & Schendel, 1978; Ryan et al., 2007; Spector,
2007). While Ven and Poole (1995) and Rajagopalan and Spreitzer (1997) further claim
that strategic change is defined as the company's effort to align with its over time alter-
ing external environment, Spector (2007) argues that strategic change, though, should
not perceived as a singular concept (Agarwal & Helfat, 2009; Aggarwal & Mudambi,
2005; Hofer & Schendel, 1978; March, 1991; Mintzberg, 1979; Mische, 2001; Nelson
& Winter, 1982; O Reilly & Tushman, 2004; Rajagopalan & Spreitzer, 1997; Sundbo,
1999). Facing the environmental threats of the global economic downturn caused by the
economic crisis of 2008 industries strategic inflection point Inwido pursued a process of
several drastically strategic changes among them a drastically renewal of the strategy, a
process of organizational restructuring (introduction of the light-matrix to develop a
more coordinated group, new key functions), changes in the leadership culture (ex-
change of 2/3 of the TMT and leadership training) and the proposal of core values
("Inwido Company Presentation," 2012; Jeppsson, 2010; Linden, 2012; see also Appen-
dix A4-A9). Inwido thus conducted a process of synergetic strategic change to develop
63
the dynamic capabilities needed to pursue the proclaimed goals (Aggarwal & Mudambi,
2005; H.I. Ansoff, 1965; 1988). The so far successful dominant logic (Bettis & Pra-
halad, 1995) of Inwido, which can be described by a classical product-driven/resource-
driven focus (A6-A9), was additionally affected by price and volume competitions
(Jeppsson, 2010). Furthermore, Inwido was not perceived as providing the organiza-
tional capabilities to sustain the established competitive advantage anymore ("Inwido's
Annual Report 2009," 2010; Jeppsson, 2010; also A5/A7). Consequently, a renewal of
the designated strategy to a modify Inwido’s intention to protect or extend its sustaina-
ble competitive advantage (Spector, 2007). The conducted strategic renewal aimed to
drastically change the focus of Inwido’s vision, mission, and designated strategy
(Jeppsson, 2010; also A4). The newly proclaimed strategic goals were focused on the
establishment of a consumer-driven company ("Inwido Company Presentation," 2012;
"Inwido's Annual Report 2009," 2010; Jeppsson, 2012a; Linden, 2013) to further renew
the dominant logic of Inwido. Also, corporate core values were communicated to
strengthen a common understanding of the new strategic orientation and raise the over-
all commitment to the renewal process (Wessner, 2013; also A9) Since Inwido’s pur-
sued strategic renewal seeks to essentially redefine customer expectations, change rela-
tionship with customers, redefine market dynamics, and/or the firms generic basis for
competition and also modifications in the core business models, one can claim that they
conduct a transformational strategic renewal (G. Hamel, 1996). Strategic renewal can
also serve a more incremental purpose (G. Hamel, 1996); Mische (2001); (Spector,
2007; Wessner, 2013), which basically comprises decisions regarding plans to expand
into new product or service lines or to capture new market segments (G. Hamel, 1996).
One initiative germane to the domain of incremental strategic renewal was the estab-
lishment of Inwido’s BA Home Improvement & Supply, which was designed in effort
to horizontally diversify (Ansoff, 1957) Inwido’s offering in comparison to the competi-
tive environment ("Inwido's Annual Report 2011," 2012; see also A7/A8). According to
strategic misfits (Jeppsson, 2013; see also A7/A8) the Home Improvement part of the
combined SBU was sold in 2012("Inwido sells Home Improvement business area,"
2012). Although, Home Improvement embraced designated end-consumer companies it
did not complement to the Inwido’s proclaimed strategic goal of establishing a consum-
er-driven focus (Jeppsson, 2012b; see also A7-A8). Nonetheless, it was also stressed
that it might also been due to a lack of organizational capabilities to managing the ef-
forts of establishing synergetic effects to Inwido (A7).
64
5.2 Key challenges
The perceived challenges are classified according to the proposed conceptual
framework (see chapter 2.3.2). In acknowledgement of potential deviations the author
altered the preselected challenge groups.
Culture and core strategic values
As stated above Inwido acknowledged the challenge of having a guiding overall
orientation for management and employees that states how they should acknowledge
their daily work and assist to how they basically should think and act. In Inwido’s case
theses core values helped to generally alter the dominant logic in changing the focus
from a production-driven to a consumer-driven company (A7/A9). Thereby, Inwido
perceived the core values as integrated part of the company’s culture, which they de-
scribed as a continuously evolving frame (A9). On the one hand, the culture affects the
strategic thinking of the TMT and the employees (Ryan et al., 2007) as a better internal
communication, the team spirit, and an effective user communication is perceived as
part of the cultural challenge (Chan & Soong, 2011) On the other hand, the culture itself
is affected by the individual cognition of the organizational members and can thus be
perceived as a challenge that is dedicated to the centre of strategic change processes
(A9). In acknowledgement of the perceived superordinated scope of culture and core
values the author decided to cluster both challenges as the reflect more that fundamental
underpinned of a process of SRP by embracing the purposeful, enduring, fundamental
values (Collins and Porras, 1996), which guides the thinking and decision-making pro-
cess. Hence, the challenge of organizational culture within SRP can be perceived as
keeping the symbiose to the proclaimed strategy (A7) and the implemented organiza-
tional structure (A7/A9) as all together determine the firm’s capability to adapt to stra-
tegic change processes(Aggarwal & Mudambi, 2005; H.I. Ansoff, 1965; Ansoff &
McDonnell, 1988) So, one can claim that the divestment of the Home Improvement BA
can also be perceived as misfit in the way the responsible executives thought (Jeppsson,
2012b; see also A7/A8)
Brand reputation and cross-brand effects
Ryan et al. (2007) state that management’s belief in the product or brand is es-
sential to a repositioning strategy as much as the awareness about market and customer.
65
The analysis of the gathered data could neither support nor weaken this proposed chal-
lenge. Nonetheless, Inwido stressed other aspects regarding brands and products that
might employed during a SRP, which can be perceived as essentially mattering: cross-
brand effects. Inwido’s planned initiative to spin out a new venture can be pictured as a
conglomerate diversification (H.I. Ansoff, 1965; Rijamampianina et al., 2003) as it
should employ new channels (online and social networks), new products (innovative
accessories), and integrate the end-consumer more direct and dynamically (Berglund &
Linden, 2012; "Inwido's new venture plan.," 2013). As Inwido did so far not employ
these elements in the established business structure (see figure 14) they cannot draw
back or only minor draw back on existing expertise ("Inwido's new venture plan.,"
2013). Accordingly, Inwido stated that all initiatives that make use of unfamiliar prod-
ucts or brands have to be established externally. Thereby, the author acknowledges the
threat of unprofitable cross-brand effects that might negatively affect the image of es-
tablished brands. This further has also major implications for the direction of the SRP.
Strategic flexibility/learning capabilities
Ryan et al. (2007) claim that the organization’s learning capability is a keystone of an
successful repositioning strategy (Senge, 2000). Inwido also identified competence,
knowledge and individuals innovative capabilities as one of the main challenges of
SRP. As it is also stated (“Competent People”) as on of the corporate core values
(Wessner, 2013). Inwido identified the need for people that reveal the required capabili-
ties to pursue the proclaimed strategic goals. Thus, Inwido not only employs trainings to
develop the required leadership skills of the TMT and middle management (A9), they
also exchanged of executives in key roles were implemented (A7/A9). Accordingly,
they conduct a process of exploration of new capabilities as well as the exploitation of
the current knowledge base to gather the required capabilities implies (March, 1991).
Inwido thereby especially points out the role of the CEO as change driver, incubator and
entrepreneurial champion (Kuratko et al., 2011) of the overall strategic direction, who
should reveal the capabilities to proactively design the strategic orientation but also pur-
suing the achievement of the proclaimed strategic objectives further (e.g. employing
personal or reallocating the needed capabilities in a particular area) (Ryan et al., 2007).
Capitalize on customer awareness and sensitivity
66
The importance of customer awareness and sensitivity was already recognized
by Inwido, which can be picture by the presents of a consumer orientation in the strate-
gic goals (see figure 15), corporate core values (Wessner, 2013), as well as in the domi-
nant mind-set of the TMT (Linden, 2013; see also A8). The challenge for any SRP initi-
ative is to establish a comprehensive awareness of the potential target groups and their
consumption behavior (Awa & Kalu, 2010; Foss & Ishikawa, 2006; P. Kotler et al.,
2007; MacMillan & McGrath, 1997). Resultantly, Inwido’s plan to spin out a company
which main purpose is the establishment a valuable customer relationship ("Inwido's
New Sales Platform," 2012; "Inwido's new venture plan.," 2013) can be identified as
integrative measure to tackle the challenge of customer awareness. Furthermore, one
can claim that this challenge was underestimated during Inwido’s earlier trial to estab-
lish a consumer-driven accessory company (Home Improvement BA).
Management Commitment
In general Inwido’s management team seems to have understood the new strate-
gic orientation and the importance of innovation for organic growth (Linden, 2012; see
also A7-A9). Further supporting arguments to identify management commitment as a
key challenge could not been investigated. Resultantly, the author decided to skip the
proposed key challenge “Management Commitmen” in the revised framework.
Business model
Inwido identified the need for a developing a viable BM that would allow to
transport and communicate the adapted core values to the end-consumer market, since
the established BM are lacking the dynamic component (A6/A7). As their pursued SRP
can be perceived as a conglomerate diversification (H.I. Ansoff, 1965; Rijamampianina
et al., 2003), which is planned to use online channels and social networks, a range of
innovative new accessories products, and an integrated more dynamic interaction with
the end-consumer (Berglund & Linden, 2012; "Inwido's new venture plan.," 2013), In-
wido assumes that a dynamic BM characterized by increasing the speed to the market is
needed (A5). Regardless, their perceived scepticism regarding the further potential of
the future applicability of one of their established BM (“Retailer”, A5/A7) Inwido does
not feel an urgent need to drastically redesign it as long as it is positively contributing to
the revenue ("Interview: The new venture - requirments regarding a SRP," 2013). Con-
sequently, another challenge should be considered, which can be described as managing
67
ambidexterity (Chesbrough, 2010; V. Govindarajan & Trimble, 2005; O Reilly &
Tushman, 2004; W. K. Smith et al., 2010).
Motivation
Management literature stressed the importance of individuals for organizational
change in several manifestations (Agarwal & Helfat, 2009; Bridges & Bridges, 2009;
Christensen & Overdorf, 2000; Kotter, 1996; Tripsas & Gavetti, 2000).. Inwido espe-
cially stressed the challenge of motivating employees to take part in change processes
(A7). Inwido also identified people as hesitant to change, which can be assumed as a
challenge that rather belongs to the domain of “Strategic flexibility/learning capabili-
ties” (Cohen & Levinthal, 1990; Hannan & Freeman, 1984). Consequently, the author
decided to adapt to Inwido perception of the proposed key challenge “People” and label
it “Motivation”, which better describe the characteristics of the assumed key challenge.
Structure
In acknowledgement of Ryan et al. (2007), who are limiting their work by question-
ing the scale of change within their surveyed SRP due to the lack of structural modifica-
tions, Inwido proposed the organizational structure as a main challenge. In considera-
tion of the informal (the emergent pattern of social interactions within organizations)
and the formal (normative social system designed by managers) elements of the organi-
zational structure (Gulati & Puranam, 2009), Inwido altered its pre-existing formal
structure by establishing the “light-matrix” (A7/A9). Also, the informal structure was
adapted, which can be exemplarily pictured by the proclaimed strategic corporate goal
“Operational excellence through group co-operations” (see figure 15). With regard to
the launch of the new venture the organizational structure additionally has influence on
employed sales and communication channels as well as for the interfaces to the corpo-
rate network and strategic alliances (Aggarwal & Mudambi, 2005). With regards to
Turner (2003) and the previously discussed classification of SRP and underlying theo-
retical streams (see chapter 2.2), the author also highlights the challenges that lies in the
misalignment of strategic orientation and the organizational structure.
68
5.3 A revised framework for successful strategic repositioning
The author revised the conceptual framework according to the findings presented
in chapter 5.2. The outcome represents a model that provides a guiding framework for
successful repositioning in a multi-brand business. The perceived key challenges
“Structure” and “Capabilities” as well the combined challenge “Culture and core val-
ues” and the adapted challenge “Motivation” were identified as having a more framing
character that reflects the heuristically interrelation to the fundamental domain of strate-
gic renewal. Nonetheless, the superordinated challenges should be perceived as also
valid for the actual repositioning process as they were identified as preparing challenges
that need to be overcome in an initial stage since they were perceived as revealing a
determining character for the execution of the SRP (establishment of new
SBU/retrenchment of old SBU, major changes in the product-market combination, and
increasing focus towards the establishment/retention of a CBU) (Ansoff, 1957; Palich et
al., 2000; Michael E Porter, 1987; Ramanujam & Varadarajan, 1989; Reichel, 2005)
The inner circle reflects perceived challenges that were directly related to the ac-
tual process of SRP, which are represented by the need for a viable BM, a synergetic
cross-brand strategy, the identification of mechanisms to capitalise on customer in-
sights, and the need for a heuristically consideration of ambidextrous evaluation criteria
and crucial decision-making processes (e.g. resource allocation, leadership aspects,
etc.).
Three integrative challenges were identified that are neither dedicated to the do-
main of the actual SRP nor to the framing process of strategic renewal: the challenge of
brand reputation, the need for an entrepreneurial champion, and the major influence of
the CEO.
69
Figure 16: A Revised Conceptual Framework – Perceived Challenges of Strategic
Repositioning Processes of a Multi-Brand Corporation in the Construction Industry
Successful
repositioning
BM
Culture and
core values
Ambidexterity
Capabilities
Capitalize on
costumer
awareness
and sensitivity
Brand
Motivation Structure
CEO
Champion
Reputation
Superordinated
challenges
70
6 Conclusions and implications
6.1 Conclusion
In effort to contribute to the dearth of literature around the domain of SRP (Ryan et
al., 2007) the author analysed the perceived main challenges of an organization’s pro-
cess of strategic repositioning. The author employed an approach of combining various
conceptual frameworks of SRP (Aggarwal & Mudambi, 2005; Chan & Soong, 2011;
Dittrich et al., 2007; Ryan et al., 2007; Turner, 2003) as well as conceptualization of
frameworks regarding strategic renewal and organizational change (Agarwal & Helfat,
2009; Barker Iii & Duhaime, 1997; Kotter, 1996). This approach was chosen with re-
gard to other case studies concerning SRP, which are either based on cases that are lim-
ited in their scale of change (Ryan et al., 2007), concentrated on organizational restruc-
turing rather than changing product-market combination in effort to grow (Chan &
Soong, 2011), or solely focused on the element of concentration (Michael E Porter,
1987) within the concept of SRP (Turner, 2003), or lacking a concrete definition and
classification of SRP as it is used as interrelated to strategic change (Dittrich et al.,
2007). Consequently, the literature concerning SRP can be perceived as not very exten-
sive. The author provided a conceptual model (see chapter 5.3) that consists of eight
main challenges and three sub-challenges, that should answer proposed research ques-
tion:
What are the perceived key challenges during an organization’s process of strategic
repositioning?
The model can be perceived as reflecting the perceived key challenges of Inwido.
Further, it was assumed that one could differentiate between key challenges that are
more dedicated to the superordinated domains of strategic renewal and strategic change
and those that can be directly related to the process of SRP. The perceived superordinat-
ed challenges embracing the following four dimensions:
Structure, Culture and core values, Dynamic capabilities, Motivation
Especially, the challenge of dynamic capabilities was perceived as crucial. One
specific finding was the challenge that Inwido identified in the need for the entrepre-
neurial champion (Kuratko et al., 2011), who drives the change and takes the responsi-
bility to make decisions that could conflict with the established way of how things were
done before.
71
Also, the CEO as incubator and champion of the overall strategic direction, who
is perceived as impersonation of the guiding strategy the CEO has not only implications
for the design process of the strategic orientation but also major influence on pursuing
the achievement of the proclaimed strategic objectives further (e.g. employing personal
or reallocating the needed capabilities in a particular area). Accordingly, this again
stresses the close interrelation to the key challenge represented by the element “motiva-
tion”, which can be perceived as majorly a challenge regarding individual inertia and
the need to motivate to people in general to participate in strategic change processes.
Perceived key challenges that can be directly related to the more concrete initiative of
SRP (establishing a SBU that creates a new combination of product and market) the
author identified the following four main challenges:
Business model dynamics, Ambidexterity, Capitalize on costumer awareness
and sensitivity, Brand reputation and cross-brand effects
The author once again would like to highlight that the case study subject Inwido reflects
the specific features of a multi-brand corporation. Thus, the perceived key challenges
especially regarding the brand reputation and cross-brand effects can be acknowledged
as very specific to the particular case.
6.2 Implications for research
In this chapter the author would like to stress out his implications to future research.
In acknowledgement of Ryan et al. (2007) the author of this thesis would also like to
limitate his findings especially in terms of time scope of this research, As a strategic
repositioning can be perceived as process with long-term prospect the author suggests
that further research on topics around key challenges of SRP should at least include the
realization process of the addressed issue. The author also assumes that future research
could contribute to draw a “web of relationship” between the terms strategic reposition-
ing (SRP) and the firm’s Business Model (BM), a term, which increasingly “…have
surged into the management vocabulary.”(Shafer et al., 2005, p. 199). That a SRP can
also reveal the need to change the established business models should be reasoned by
reflecting that a BM can be described as “…management’s hypotheses about what cus-
tomers want, how they want it, and how the enterprise can organize to best meet those
needs, get paid for doing so, and make a profit” (David J. Teece, 2010). David J. Teece
(2010), further highlights a view that describes the BM as anticipation of changes in the
environment.
72
Thereby, the author proposes that on can claim that key challenges of SRP can be
perceived as overlapping to business model change. Especially, if the conducted SRP,
like in the here proposed case of Inwido, embraces the plan to establish a new venture
that reveals the need for a complete new BM (according to:Cavalcante et al., 2011:
Business model creation ). Furthermore, an extensive analyses regarding the relation-
ship of SRP and organizational ambidexterity in mature businesses (Tushman and
O’Reilly 2004, O’Reilly and Tushman 2008), could reveal contributing finding to the
overall topic of SRP. As in the case of Inwido, SRP often takes place at the SBU level
of multi-business corporations, which face the challenge of simultaneously build future
new businesses to foster growth ambitions while also operating in the established
CBUs. Finally, with regard to this case study as well as to the other scholarly literature
concerning the domain of SRP, the author recommends that quantitative research or at
least a multi-case study could contribute to provide more substantiated findings.
6.3 Practical implications
The author assumes that the provided framework and findings can contribute to fos-
ter common understanding of the current situation within Inwido. With regard to the
proposed key challenges the framework can contribute to increase the acceptance and
commitment to change processes in general by providing the management a base to
refer to when facing the situation of a planned SRP. The proposed conceptualization of
SRP can also add to the anticipative capability of executive and employees in terms of
fostering an intensive understanding of issues and processes dedicated to SRP. This will
also contribute to enhance the proactiveness in terms of developing a valuable strategy
for SRP, which considers potential necessary activities (e.g. resource allocation) on the
base of guiding framework rather that reacting to the occurring issues. Viewed from a
broadened base, the author wants to emphasize that this thesis can only serve as a rudi-
mentary baseline case for thoughts on how manufacturing companies may meet the
challenges of a increasingly dynamic environment. The analyzed case is can be charac-
terized as quite specific in nature as the pursued SRP of Inwido is at least novel to the
particular industry. Other companies, especially in unrelated industries might likely
have other experiences, alternative methodologies and insights that again would enable
other parties to learn and benefit from.
73
Although the company clearly identified the challenges of strategic and organiza-
tional change processes the challenges dedicated to the particular area of SRP can be
perceived as quite novel to them. Especially, since Inwido is entering unknown territory
with the discussed initiative of spinning out an social and online commerce-based inno-
vation platform. By referring to the proposed framework a more structured process for
future SRP could be conducted.
7 Appendix
Appendix A1: Inwido’s company profile .............................................................................. 75
Appendix A2: Inwido’s market overview ............................................................................. 80
Appendix A3: A dynamic RBV - Various views regarding dynamic capabilities ................ 80
Appendix A4:Interview transcript: Business Controller Inwido AB .................................... 81
Appendix A5: Interview transcript: Group and Business Controller Inwido AB ............... 89
Appendix A6: Interview transcript – Vice President of VP R&D Inwido AB ...................... 97
Appendix A7: Interview transcript – Vice President of Marketing and Sales at Inwido .. 101
Appendix A8: Interview transcript – Acting Senior Vice President, Group Operations ....... 113
Appendix A9: Second interview transcript – Vice President of Marketing and Sales at Inwido
................................................................................................................ 125
Appendix A1: Inwido’s company profile
The leading window and door
group in northern Europe
!
# No. 1 or 2 position in all
Nordic markets
# Sales in 2011: MSEK 5 050
# Employees: 3 500
# Production plants: 31
# Head office: Malmö, Sweden
# Largest holding of Ratos
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Local brands in two market segments
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Windows Doors
Sliding doors Installation
Other
Structured growth through
acquisitions
!
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/%08
#903%+ 2:; In respect of PD, leverage the existing knowledge
Interviewee: (laughing) …. (long break)…. in respect of product development a lot is on-
going here… but as I said before its about work in a more structured way to leverage the ex-
isting knowledge and make sure that you are not reinventing the wheel in each business ar-
ea…build on each other knowledge is…
Interviewer: Would you say that the strategic orientation from a "supplier to the building
industry" to a consumer brand has implications to the organizational structure? You have
changed the structure because of the strategic reorientation?
Interviewee: …hem… (long break) to become a consumer company I think we need to pro-
vide real value to the end-consumer and I mean in the long-term its about deliver a product
and… have the right features and quality and so on and in this case we have to all rapidly de-
velop new products…because the external change so to say is… a lot of things are happening
very fast and to fit into that we also have to react fast.
Interviewer: But the organization as such has not changed so far?
Interviewee: So far…not, No! I mean of course we can push it in the right direction but may-
be we need other things to become a real consumer company.
Interviewer: What is your opinion of this organizational change processes?
Interviewee: …. a very general question… a lot of things happening…the bigger the organi-
zation is the more difficult it is to change things…. maybe not going…changing something
for just changing something…tha's good but… (long break) … you can except change but
then you have to think about every person has his own interest in the organization… I think
this is the tricky part.
Note: Reveals mixed feelings regarding change
Interviewer: Could you please describe why Inwido sold its Home Improvement business
area?
Interviewee: I can't really speculate… I was not employed then.
Interviewer: Could you please describe the current dominant business model(s) at Inwido?
Dominant in terms of KPI/Durability/Tradition/Management Backing
Interviewee: A lot of questions… (laughing)… (laughing)… I mean looking at the past we
have been quite successful. So in that perspective we have the right business models… I think
our shareholder are very happy… but of course…the question is "Are they good enough for
the future"… (laughing)…I don't think that they are good…they are too slow… as you would
say "bureaucratic". The management is too involved in the daily activities! If the manager are
involved in everything suddenly you're very scared of doing something….you do something
by your own and you get punished so to say (laughing) that you have taken your own initia-
tives. It becomes very static… and then you are afraid of taking the decisions…your own de-
cisions.
¬ Note: Shareholder are happy!!!
Interviewer: Would you say Inwido is more focused on its shareholders or its consumers?
Interviewee: …we are here because of the shareholder…its always to deliver to the share-
holder but in order to do this you have to deliver value to the consumers. I don't know which
one comes first (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which is
offered through this/these specific BM?
Interviewee: … (long break) …. the value proposition… we are going to supply… the… (long
break) … the best windows but looking at our…from a quality perspective I think all our
products have very good quality. I can't say that we have a very differentiated value proposi-
tion compared to our competitors.
Interviewer: Do you personally see a necessity for a change in the current BM or the creation
of a new BM?
Interviewee: Since we have been successful we should stick to that but I also think we have to
try and test new ways of doing business…develop a new business model…is necessary for the
future!
Note: Implies ambidexterity
Interviewer: Could imagine any main barriers regarding the implementation of a new BM or
the change of the current BM?
Interviewee: Of course, there are a lot of barriers of doing that….and…due to different rea-
sons…but therefore I think we have to do it (observer's note: new venture) outside of the
business. We can't… (incomprehensible)…when this change happens in the existing business
we have to go outside…
Interviewer: Could you then imagine any main barriers for doing it outside
Interviewee: JA… doing it outside is…. there I think it could be tricky if you doing it with
new people without knowledge about the industry… it could be failure so it's very important
that you leverage the knowledge we already have.
Interviewer: You’re planning to spin-off a new venture to increase the innovation speed.
Could you please briefly describe your intentions regarding this approach?
Interviewee: I think it is about increasing the speed of doing things, having a…sandbox where
you can test new things rapidly without… risk to destroy the value of any of our existing
brands
Appendix A7: Interview transcript – Vice President of Marketing and Sales at Inwido
Interviewer: Kaya Vatansever/Tim-Ole Mundt
Interviewee: Vice President of Marketing and Sales at Inwido
Interview Setting: Interview conducted in the meeting room of Inwido. The interview was
conducted from 10:10 AM to 11:10 AM on Monday morning.
Affiliation with interviewee: None. Introduced to her three month ago but we have never
spoken an additional word
Interviewer: What is your formal position?
Interviewee: I am senior vice president for Marketing, Sales & Communication
Interviewer: Could you briefly describe your work duties?
Interviewee: I am in charge of internal and external communication. I am also responsible for
our brands and the brand strategy. And I have a key account responsibility for our internation-
al retail chains.
Interviewer: How much of your work time is immediately or mediately dedicated to product
development activities?
Interviewee: Perhaps 10%, if you also mean conceptualization
Interviewer: What is your background and education and how long have you been working
for Inwido?
Interviewee: 3 ! years
Interviewer: Why?
Interviewee: Because I was interested in the challenge that this job at Inwido will bring.
Interviewer: What is your role in group meetings when deciding about new products?
Interviewee: I’m part of the group “Product Council”. And also, as you may know, we were
part of this “Compete & Incubate Initiative” together with Ideon. Out of those I’m heading to
projects.
Interviewer: So you are running two projects right now?
Interviewee: Yes, and apart from that I’m working with and I’m overall responsible for a
marketing and sales group that is running a product development project at the moment. I am
not a big part of it, though.
Interviewer: So is the product developed and ready to launch or in prototype stage?
Interviewee: So far, it is a prototype but it supposed to be launched next year
Interviewer: And this prototype was resulting out of the collaboration with Ideon?
Interviewee: No, sorry, that is a separate one. The one I’m talking about is not related to the
Ideon project. Only internal and not connected to any external initiatives like “Compete &
Incubate”.
Interviewer: Okay, let me revise my question. I was interested in NPD resulting out of the
collaboration with Ideon or similar initiatives.
Interviewee: Okay. There are two projects, which I’ve taken care of. One of them is more of a
software development project. Aiming to illustrate to people the benefits of different win-
dows, doors, and accessorie-solutions at their homes. Which has not come so far, yet. The
other one is more like you can dress your window – the frames. It’s about accessories - simi-
lar like an IPhone case. You can print it and add it to your window frames.
Interviewer: Did you launch it?
Interviewee: No, but we are most likely going to launch it. We are in the process to create this
venture together with the guy that came up with the idea.
Interviewer: Interesting! Did you, in any stage of the development process, involve custom-
ers?
Interviewee: Yes, we have done that. But not in the way I would have like to. Actually, it was
more in the other project - the one that is conducted by the marketing group. We used, for
example, focus groups. The “sticker” project is a really low budget project. We are conduct-
ing it with a minimum of internal funding. But we’re planning to integrate the customers a bit
before we launch.
Interviewer: Does Inwido make practice of bringing in external knowledge and technology?
Additionally, to the Ideon project?
Interviewee: No, not on a regular basis.
Interviewer: When a new product idea is generated or concept is invented, do you need to be
convinced in terms of if the project will be followed-up.
Interviewee: Depends on the investments requirements. But to be able to launch sth, we (I and
my friends from marketing and sales) need to be on board.
Interviewer: We know that you collaborate with your suppliers in terms of NPD before.
Have you ever used other external parties like customers before?
Interviewee: Yes, on the industry side we did it a lot. I mean industrial customers (IC) and
suppliers were often part of NPD, so far. But to my knowledge, I’ve been here since 3 !
years, not other parties.
Interviewer: Did the IC approach you to come up with NPD or how did a NPD process nor-
mally proceed? Collaboration?
Interviewee: Normally, the IC put up certain demands and we tried to reach them. There is a
part of collaboration because we can’t do everything on our own. That is mostly how.
Interviewer: And in terms of collaborating with universities? Is this the first time?
Interviewee: I think so, yes! Not to my knowledge. But…wait I shouldn’t say… in Denmark
there is a company we have acquired it is called Pro Tec …. They have used external
knowledge a lot: universities, designers, architects, etc.
Interviewer: Have you ever developed products by using marketing instruments to analyse
the competitive environment (e.g. benchmarking)
Interviewee: No, so far the NPD is factory-driven. Not at all from the market side. I should
explain: I don’t have a department. It’s me. All the activities are locally driven from the busi-
ness areas (BA). What I’m trying to say, you can find things in Denmark that would never
work in Sweden for example. You have rules only applying to Sweden and such only apply-
ing to Denmark. Not saying that the driver for NPD couldn’t be the same; it’s just the markets
as such!
Interviewer: What would be your role in launching a new venture? Would you have direct
influence on marketing decisions? E.g. Hemmafönster
Interviewee: No, not necessarily! In the case of Hemmafönster was not a real new brand
launch. It was formerly known under VC. Its was just a brand relaunch. I was deciding about
name, positioning, the graphic decisions. But not in putting done the actions.
Interviewer: Could you describe how a process of launching a new venture would look like?
Who decides? How is the decision-making process look like.
Interviewee: It always depends in which BA or to be more specific if it’s in a market where
we have already an organization than the specific organisation would lead the launching pro-
cess. It also depends on the volume, who of the TMT needs to be involved.
If it’s a complete new venture in a new market like we have at the moment with Aus-
tria…there I’m part of which brand(s) to use, what positioning, about the price, where to be
localized, which city, where would it be good to us to enter the market. When it comes to
products… I’m part of that…but it’s not my core what products to use in that market.
Interviewer: Oh, okay! So are you going to use/transfer products from the BA Sweden?
Interviewee: No. The main sourcing will be from Poland and most possibly from Denmark.
Interviewer: Okay. Now we are curious to know as which very fundamental strategic orien-
tation would you label your ambition to enter the Austrian market. Is it just a focus on
growth? Or more like a strategic repositioning?
Interviewee: Of course, it is a growth ambition! We spotted a few markets in Europe, which
reveal the potential to generate substantial market share. Fundament for that is of course “it’s
a wood-based market”. That’s we are not entering the German market, because it’s a plastic
dominated market. So we see Austria, we see Switzerland, we see northern Italy, and a few
other markets that are interesting to us. Then we do all the market research…of course. Then
we look at all the competitors and…you know the drill. Since we’ve quite an extensive brand
portfolio. We don’t want to put a new brand into the market. This time we also have the re-
quirement that whatever brand we use to enter Austria is a brand that we will be able to reuse
when enter other European market.
Interviewer: So, you would not describe entering the Austrian market as strategic reposition-
ing, right?
Interviewee: No! Its part of our growth ambition to be a leading European company! Since
most our markets are decreasing we need markets that are a bit more stable.
Interviewer: And the Austrian market growing instead?
Interviewee: Well, let’s say it is not decreasing. And also Austrian is the home market of the
second or third largest player in Europe. It’s a market that not has been challenged so far I
would say to very large extent. And its also a market in which windows are regarded…it has a
better position I would say – you can charge much more for a window than in other markets.
Which also requires that your are much sharper in your positioning and in your offering. You
can also see that in the communication done in that market…its quite much sharper.
Interviewer: Do you have any idea why it is like that?
Interviewee: I think that Internorm has done a very good job to take it (note: windows &
doors) from building material to something that is important to your home…more important
part of peoples’ life.
Interviewer: How important are intangible resources e.g. knowledge, intellectual property or
customer relations to Inwido, your division, and your individual workplace?
Interviewee: Its very very…its getting more and more important I would say. Since we have a
history on being very dependent on our sales channels and have had not, historically, a very
tight relationship with the consumer, who is actually buying the windows. To be able to reach
our vision and mission we need much much much closer to our consumers and therefore we
need those kind of properties you’re talking about. Its important that we manage it (note:
knowledge) and that we own it (note: knowledge). We’re not there yet, though! We not work
on it quite a lot. It differs…I mean different markets. For example in Finland it’s a totally dif-
ferent setup because they’re selling directly and they have all data, for example when it comes
to customer data. While in Sweden we’ve almost nothing! But it’s very important! And it’s
growing in importance. Probably the most important looking ten years ahead.
Interviewer: Could you please describe how crucial information is shared at Inwido?
Observers supplement: Is laughing out loud. Obviously also a bit concerned about the
way crucial information is shared.
Interviewee: Email!?! I'm afraid that's…I think email and meetings that is how crucial
information is shared to a very large extent. I would like to say through intranet or other
documents or sharing places…but this is not the case.
Interviewer: Do you have regularly meetings?
Interviewee: We have lots of different meeting - on different levels. We've meeting on the
group management team every month. I as I sad have a marketing and sales management
team - people that have a strategic position in sales or marketing. We also meet every
month. This office (note: embrace the centralized functions of Inwido in top-management
team and middle management) has quarterly meetings. And then my own department has
meetings every three to four weeks to update what has happened…we have quite a few
meetings. Apart from that we have quite a few project-related meetings: we have the
Product Council four times a year. We also have Business Review Meetings, where the
central staff, means myself (VP Marketing & Sales), CFO, CEO, VP Operations, VP HR,
we go out to the different BA where we have a full-day meeting with the BA-TMT. We go
through all the business issues on corporate level as well as on local level. We do that
three times a year. We do this to focus on the most important parts of our business. It's a
pretty important forum. Then we have the TOP-60 Meeting every year where the the TMT
of every BA meets for a full-day.
Then I also have the same with all the sales & marketing staff once a year for 24 hours.
Interviewer: Could you please describe the currently on-going change process at Inwido?
Interviewee: Connected to our organization or connected to our strategy? Is that what you
saying?
Interviewer: Both. More about the strategy but also how do you perceive it internally and
what is happening inside the organization and structure.
Interviewee: Well, as you know, we have the strategy to go from a production-driven
company culture to a consumer-driven company culture. Of course it needs to be driven
by different things - among them, the organization. One part of this is of course the light-
matrix that we have put in place… I mean our business is driven from the different local
business areas. That is were the different P&L responsibility lies. It's in our business areas.
So, under that is sales and marketing and operations…the factories are in the countries.
There are driven by the local business areas but at the same time we are of course more
and more trying to use the synergies we have of course being in groups. A lot of our com-
petitors are very local while we as a larger company can use the synergies and also the
knowledge from different countries to be able to offer more and better solutions to our
customers. Anyhow, the light-matrix then was introduced…I think…a year and a half
ago…as part of that my group…I call it my group…with marketing, sales and communi-
cation with representatives from the different business areas…we focus on marketing and
sales to drive those questions more quickly in our company…to be able to reach our mis-
sion and vision…because historically all those kind of questions have been within the lo-
cal management team and we don't…I mean it will take too long for all those questions to
be taken. At the same time, there is a group within Operations that are doing the same kind
of work when it comes to trying to workout product platforms, finding synergies in the
production part of our business. So…and in that work we are focusing on common pro-
cesses, benchmarks, and best-practices that we can use for different parts of the organiza-
tion. I think that is the main organizational…I mean we are probably heading towards a
more centralized organization especially within Operations I would say…because we are
now heading for Austria…we're taking production capacity from different countries to use
in a new market and it will be more and more like that to be able to be really effective in
that end of our business…I think we need a more centralized approach to…it's a few years
from now but I think we're heading in that direction…and when that happens the business
areas will be marketing and sales organizations to a very large extent…and I don't now if
I'm supposed to say anything about what I think about things???
Interviewer: Yeah, of course
Interviewee: I think that will be necessary and I think that will be the only way where we
will actually could become a marketing and sales-driven company…. because as of today
we're not at all (laughing) we have very few marketing resources…it's less than ten people
within the group of more than 3000 people that work with marketing…and those are not
strategic at all…they are more the hands-on-marketing people…and then when it comes to
sales we have historically not been handling that as a strategic tool. Moreover, it's been
very much basic selling and not value-based selling at all. We have "this is the competitor -
we have a better price!" (laughing)…Yeah its needed, especially when we're going to in-
corporate new technology and new things into our products we need a totally different ap-
proach both when we're introducing our products into new markets but also when of
course selling them. We not much more…we can't not sell everything through campaigns
and everything is included in all time (note: meaning the window and door as part of an
integrated and heuristic system that need to be implemented with prospect to further com-
patibility and long-term focus)…now we need to be much smarter when going to market.
Interviewer: What is your opinion of this organizational change processes?
Interviewee: NOTE: see included in answer above
Interviewer: Do you feel affected by this change process in any kind?
Interviewee: Oh yes, I'm part of it - that's way I chose to work here! I wanted to be part of
these change. To use the tools that I learned working in other industries.
Interviewer: So, I assume they (note: Inwido board) looked for someone like you with a
intensive focus on the end-consumer?
Interviewee: Yes, I was the first one Hakan (note: CEO) employed. I think he looked for
someone with my capabilities.
Interviewer: What means change to you?
Interviewee: New opportunities…challenging the old. Taking lessons-learned and making
it better. I am curious person, so to me change is mostly positive but I know that change is
also hard work…very hard work. You need to get people on board and understand why
change is necessary. Because most people perceive change as threatening…they know
what they have but they don't know what they are going to get and that is fully under-
standable. I think this is the challenge, which I like. It is fun to see people get glimmer in
the eyes when they understand that change is actually an opportunity.
Interviewer: How do you do that?
Interviewee: (laughing) By involving them. Making them part of it. Making them also part
of finding a solution.
Interviewer: Could you please describe why Inwido sold its Home Improvement business
area?
Interviewee: (laughing) Yes, I can. I was not part of our core business. The synergies were
not there.
Interviewer: Again, why?
Interviewee: Those products were sold differently then windows and doors. You (note:
consumer) don't take the decision at the same time and so you need to be with the con-
sumer at different times…it was a different business…I mean if we have had come further
with the development with this company I think we could have seen more synergies…but
I mean (laughing)…but have another ten years…so at this point…no…I think it was a
wise decision. Even if I wasn't part of it (laughing)
Interviewer: Actually we are now wondering…was it completely unsuccessful or was it
just not matching your strategic idea during this stage of the change process?
Interviewee: I think it depends on what you mean by unsuccessful?
Interviewer: Bottom-line performance
Interviewee: That was not bad but there was not the synergy that they (note: decision-
maker at Inwido during that time) expected to be there. We were not able to take care of
the home business areas in a way that would have deserved I would say...
Interviewer: So, did you have a team that was in the lead to establish the desired and
needed synergies you are speaking about? Or did you just expect that there will be syner-
gies, which turned out to be wrong?
Interviewee: I think…No, there was not a team…I mean there was a team that managed
the acquisition but no, we didn't handled it from the consumer-drive perspective what, I
think, we could have done. There was some initiatives…I mean the manager of that busi-
ness areas was part of the group management team and so on…and they were involved in
quite a few initiatives that we did but…no, not a team that focused on managing synergies.
Interviewer: Could you please describe the current business model at In-
wido/Elitefönster?
Interviewee: (laughing) we have several different business models… (laughing)
Interviewer: (laughing) we can also skip this question?!?
Interviewee: Yes, thank you (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which
is offered through the current BM? Perhaps at both your cash-cow brand Elitefönster and
Inwido?
Interviewee: The value proposition for Elitefönster?!? I mean that… we call them a Mar-
ket generalists, the Volvo of windows in Sweden…if that gives an indication? Its safe, its
quality, it has the solution that you need more or less and a history of doing that for 90
years. But there is a value proposition for each and everyone. They (note: brands) deliver
all the time on it but...
Interviewer: Do you personally perceive that the consumer also think about Elitefönster
offering a value proposition labeled "market generalist"?
Interviewee: Actually, I know since we are doing brand audits. So I know that they
think…that they perceive Elitefönster as what I just said. I would have wished they had
some more labelings on Elitefönster because that would it make a more personal brand
but…Elitefönster has a good…it is the strongest window brand in Sweden…that is a fact.
Well known for quality and being the strongest window brand in Sweden.
Observers supplement: She is talking more about consumer's perception of
Elitefönsters'image than the value proposition here.
Interviewer: Now Inwido?
Interviewee: Great windows and doors…so (laughing) that's all what I would like to say.
Interviewer: Do you personally see a necessity for a change in the current business mod-
els or the creation of a new business model? If so, where?
Interviewee: Since we have several business models I think some of them are well suited
for that while others need to be either revitalized or challenged to be able to carry us to-
wards our vision or mission. I mean we have a direct business model in quite a few of our
countries and that of course is a carrier to where we heading…but we have also some
channels, especially the retail channel, which is under strain (laughing) and our question is
if they are actually bringing some value here!? I think that is something that we need to
figure out. Either we need to develop them (note: business models) together with them
(note: retailers) or we need to challenge them (note: business models)…question if we
should continue on it.
Interviewer: If you have to point out some part of the process from the production to the
end consumer, where do you see the potential to change - more on the consumer-side like
channels and the consumer relationship or also in terms of key partners, resources or activ-
ities?
Interviewee: (laughing) I see opportunities everywhere (laughing) I think we have…that is
why I chose this company to work for (laughing) …its a very traditional business. Not
only Inwido more the whole business as such. Lots have done in other industries what
have not been done in this industry yet. And then of course challenging the existing in the
old tradition always creates some turbulence and you loose some here but win on the oth-
er…So, I think, the biggest where we could gain the most is in the customer and end con-
sumer part. That's what I think. We have a very large part to do also on the backend of the
processes and in the production but I think we would in best focus on the consumer part.
But that is always the hard part because it's not like investing in machines. In an industry
like this, with all its traditions behind it, its very very hard to get acceptance for those kind
of investments. Also connected to product development and those parts. It takes time!
Interviewer: You were talking about main barriers in a BM change process? Could please
describe them a bit more intensive?
Interviewee: Ourselves (laughing) ja ja ja (laughing) I mean all the people that have
worked within this company for 25 years are used to doing things in a certain way. And
getting them motivated to do things differently, I think, is a great barrier. I think actually
the surroundings are more often changed in comparison to internal aspects. And one more
thing that I would like to emphasize is competence. We haven't got the competence in
quite a few areas. We're lacking…I wouldn't say completely lacking but we have so little
of them that they are so broadly spread all over the company. So you don't really get the
gain of them (note: people with competence). Since they are not allowed to focus on the
areas where they really can make a change.
Interviewer: Inwido is planning to spin-off a new venture to increase the innovation
speed. Are you aware of that? What do you think about it?
Interviewee: Yes, I know about it but not that I would say…I must admit that I have been
not so nice to him on this issue… (laughing) No, we have so many projects and I'm in-
volved in so many… I don't like to be only a little bit involved. Unless he is not really in
need of me I will be not involved…so its more me (laughing)
Interviewer: How does window/door of tomorrow look like? From each perspective, you
in your role as a customer as well as you as part of Inwido.
Interviewee: As a part of Inwido - I don't know.
My vision of the window is that it will actually become a much more and important inte-
grated part of every people's home. It's something were you…I wouldn't say sophisticat-
ed…but to me the window is something that you should be able…that should be able to
reflect you mood. So that it actually gives you the environment your actually want to be in
- if you want light it will bring you light, if you want to be shaded it gives you shade. If
you want the kitchen to have the menu when you're going to cook there, it will be there. If
you would like to watch TV on it, you can watch TV on it. And you would be able to con-
trol…control your windows of course from the distance and so on…but it will bring you
the comfort you would like! That's how! When it comes to the door - I think that the door
is doing its job to much larger extent today than the window. Because I think the door is
something that you personalize much more than a window today. Then of course it should
bring you secure. It should be easier to manage automatically…but I think that is…its not
that interesting I would say! I think y window has much more opportunities than a door,
because I think more and more of our homes will be glass and windows. For Inwido - I
definitely hope that we will be part of this new era of windows! I hope that we will be first
out! I'm not so sure, though. Maybe in the industry they (note: competition) will recognize
us as being first. I'm not so sure that we will be…that we will take the investments to
make the consumers regard us as being first.
Observers supplement: Seems that they are all believing in their shared vision of bring-
ing “smartified” solutions to people's homes.
Interviewer: If you had the power and means what would you change at Inwido?
Interviewee: … I would definitely invest much more in the marketing and sales part much
more. I would take away a lot of the initiative that we're doing today. Prioritize much
much much more of what we are doing. Putting large investment in the marketing side to
get up the awareness (note: consumer awareness) around windows. I would definitely in-
vest…jaaa…because people need to be aware of the windows - to look at them not
through them! I think this is very important! To be able to sell values around windows
people need to be aware of them. That is something I would do! And then I would invest a
lot more in product development - that's what I would do…because we need to develop.
This (note: the current market technology) is mechanic. Its boring! Today it's a hassle it
needs to be much much more… and perhaps not so serious!!! It needs to be more fun
(laughing) fancy and fun! (laughing) But this industry is taking itself so serious…and peo-
ple get bored of seriousness! They want the safety connected and security connected to
seriousness but...
Observers supplement: Interestingly large break before she answered.
Interviewer: Nice! Thank you very much! Yeah, thank you very much!
Interviewee: Thank you! I hope it will help to whatever work you have to do (laughing) Good
luck! I look forward to getting whatever it is you working on (laughing)!
Appendix A8: Interview transcript – Acting Senior Vice President, Group Operations
Interviewer: Kaya Vatansever/Tim-Ole Mundt
Interviewee: Acting Senior Vice President, Group Operations
Interview Setting: Interview conducted in the meeting room of Inwido. The interview was
conducted from 16:10 PM to 17:15 PM on Tuesday afternoon.
Affiliation with interviewee: Designated co-mentor at Inwido. Introduced to him three
month ago. So far we had two meetings together.
Interviewer: What is your formal position?
Interviewee: Senior Vice President Operations
Interviewer: What are your work duties?
Interviewee: It is to….coordinate our operation its our production, its our R&D, its our facili-
ties, its our procurement for the group…basically that is to hold-together, to maximize our
potential with our plans, to consolidate our platforms…and insure the to lower the cost of our
purchases. So, its a broad role but its in parts its quite holding two positions because also
Head of Procurement…and we work in Matrix… we are decentralized but coordinated from
here.
Interviewer: How much of your work time is dedicated to product development? Mediately
or immediately?
Interviewee: I mean product development is operationally positioned under Operations and its
like that in most business areas that the Operations Manager is also managing the R&D de-
partments and centrally we have as you know Gabriel (note: new VP of R&D) new and he
reports to me. So in that sense I have a direct link to R&D by discussing the issues he reports
to me. And then there are all the connections to our strategic suppliers, which is the base for a
lot of our R&D and a lot of our ideas, which we have brought forward to the market place…as
campaigns and so on are from the suppliers…its a new kind of glass, a new handle….so not
so much research but absolutely development of our existing products.
Interviewer: So historically you have developed your products also in collaboration with your
supplier?
Interviewee: Yeah, I would say so we've that….and pressure from laws that regulating ener-
gies demands and…the presentation of new ideas from our suppliers and also some customer
demands forced us to develop in certain… I wouldn't say…as you know…our organizations
itself is not generating massive amount of new products but we're…I think we're good at read-
ing our suppliers and also trying to adapt to market demands, which made us, especially in
Sweden quite successful and being first in energy solutions and so on. The three-glass-window
for example…jap.
Interviewer: What is your background and education and how long have you been working
for Inwido?
Interviewee: BSc. Development Engineer/MSc. Industrial Organisation & Finance
Interviewer: Does Inwido make practice of bringing in external know-how and/or technolo-
gy?
Interviewee: I think we do. I think Abell Security quite recently is a good example by acquir-
ing a technology company or part of it and bringing it in…helping us launch new smart home
products…its one example of it…but historically it is what I mentioned before: using our
suppliers and pushing them to say what is next? What do you have in the pipeline? Do you
have product like this or that? And bringing in technology and know-how from them.
Interviewer: When in the process are external know-how and/or technology mostly used?
Ideation phase, creation phase, development?
Interviewee: I would say historically it has been in the very beginning… we have stolen ideas
from them or products from them. I would say we gotten innovation and brought them to the
market through our products via our channels…that's historical. But then of course we have
development projects…we've with the customer right now…looking at new types of windows
together with Skanska and Abell, which I mentioned before. In this case they are part of the
process from beginning to end. I think it has been the last two to three years were we built
something…ja I think you can take that. I mean its…we've pushed suppliers in the past also
and develop things together like "Finger Joint Wooden-Components" and that was basically
not done before. But in 2002 we started together with NAME OF FIRMA NOT UNDER-
STANDABLE where we started with "Finger Joint Wooden-Components"…so I say we were
first with that. You see lots of and defects that are cut-out with…Yeah but I guess I would say
two or three years we were working more close with longer projects.
Observers supplement: Historically
Interviewer: How did the strategic change affect the product development process?
Interviewee: I would say we never had a product development process. We worked ad-hoc
with project we've found. Not through clear processes or tunnel or gate-ways..no systemiza-
tion. I mean we of course check with the marketing force? and then we get further with their
"god-feelings"…basically you could say that whatever we do their is a process but we hadn't
have a defined process on a paper that we follow and … to this day we actually don't have a
common even though Gabriel has launched one and has one…on paper… (laughing) its still
not a common model that anybody is running after…that will take some time for us.
To get everybody understand what that gate process mean…what does gate one or gate two
mean…we have it on a paper but not everybody knows what it mean. I think a year and half
ago the process was born…it was a rocket on the intranet… but no-one used it.
Interviewer: So before you never used open innovation in the ideation process of new prod-
ucts, right?
Interviewee: No, I think open innovation was first…we started that together with Ideon last
year. It was definitely new to us. But this does not mean that we had a process in the back-
ground and still don't have one. Open innovation we did because we really believed that that
would be a fantastic way to get new influences and young competences into the company…
but of course it helped to see what could be accomplished with that (note: open innovation) …
it was a very successful process! But do we have a lot of new products out in the market be-
cause of that - No, not yet. But it doesn't matter because it gave us a lot - the process itself.
Interviewer: What is OI to you? How contributes open innovation to Inwido the most?
Interviewee: Open innovation definition for me…well, I would say for us and the way we
looked at it and sharing our problems or challenges with…with a broad public or with the
public…saying "help us with this", what can we come up with together and we are willing to
share the result from that with you…and by that getting much more - to answer the second
question - to getting much more than we would receive when we would sit in a close office
together and all our R&D guys looking at each other. So, I think we achieved a lot by doing
that and we can get so much more out of that - yes, we opened up for competitors to look in.
Absolutely! To someone to maybe steal our business idea and what not….but I think we're in
a position that we're quite stable and traditional industry. That we can do this without being
afraid of someone stealing and launching. I think if we were Apple, Nokia or a fast-moving
electronic company or Samsung…I think it would be a harder process for them…that's my
feeling… I think it fits business like us maybe a little more…because we can be quite open.
It's not something (note: talking about products) that you can copy and steal within a day and
launch tomorrow. So, that's maybe something….and in regards to open innovation that might
fit to our business. Ja, open and not afraid to share our problems, thoughts and ideas together
with a… like we did!
Observers supplement: Is much more talking about threats that change and opening up the
corporation could bring.
Interviewer: What are Inwido’s/Elitefönster’s crucial sources to gather/gain/acquire re-
sources? Could be knowledge, people, assets, tangible, or intangible.
Interviewee: I think so far suppliers is key for us. That's where we gather most! I would like
to say customers but that is not the case. I think we will have to tell them what they need be-
cause they don't know what they need! If you ask "Do you want to control your window with
your phone?" than they most probably would respond: "No, why should I want to do that?"…I
guess that there is no need yet. So we have to create that need! I would say from suppliers! I
would say whatever brands are doing -in other markets. Looking at what technology and
"smart" is doing in different business and different business models and trying to steal from
that…its not an answer to the resource question but…. the only way to get new resource we
have to go out and steal them - ideas that we want, people we found out there…this is what
we can use! So, let's buy-in his company and see… I think its very rare in our business. It is
one way… I would say its hard…its always a challenge to acquire or gather the right re-
sources… I would say.
Interviewer: Do you also make use of internal sources when it comes to unexploited
knowledge inside the company ? Ideas, etc.
Interviewee: Yeah, on the group-level. The R&D is meeting every month. We have a meeting
for only high level …every Head of the different functions…and sometime we mix them up -
that is quite cross-divisional. But only…I mean below top 60 management I would say. We
have idea boxes…and also open innovation with Ideon we also invited a lot of internal people
to take part in order to learn also from the process and learn also from the process… but inno-
vation itself we can be much better in collaborations with universities and so on…we act at a
very low level…I mean it's you're, when I look at you two, you a rare…it's not what we have
done a lot…historically. But locally its more common - take Elitefönster. They have one or
two from technology educations coming in every year doing…lets say a new type of window
or so on…getting some influences. But on a very low level!
Interviewer: Could you please define the resources, which are essential for Inwido’s suc-
cess? From your perspective.
Interviewee: Well, we can't lose our core competence of production of wooden-windows-
that is core! If we don't have this, we don't have Inwido! That means we need that core com-
petence locally to produce a simple thing as a window! I would like to say it is within innova-
tion but it is not… if we're talking about something essential for Inwido I would have to go
back to our core business, which is producing wooden-windows!
That's what we build it on and that's what we have to go back to…I think (laughing)… but to
grow, to be prosperous, to take the next step, to evolve as a business, we need so much to be
on the edge of things and showing the market that we want to take the market leader position
by bringing innovations to market and actually becoming a product…yes, that is core for us.
Even though we're not market leaders than we can still take that position by bringing products
and using our group as strength there. So, if we are or have a lot of power in on business areas
we can be innovative used that strength to launch that in our neighbor area, where we have
very little resources.
Observer’s supplement: Is focusing on the production-based view/resource-based view
when talking about Inwido.
Interviewer: Did they change in the last years? Regarding innovation and the organization-
al/strategic change processes
Interviewee: Yes
Interviewer: Do you have an idea why that happened? Adapted: Why now, I mean what
was the starting point?
Interviewee: …I think it was a combination of things.. I think of course a new management
that has come in. So, I think that has affected absolutely… Hakan (note: current CEO) instead
of our previous manager. I think that has one effect. I think we're also in a place of our busi-
ness where we are…have…like in Finland or Sweden where we have almost 50% market
share. If we wanna grow we gonna have to bring more products to the market! We won't be
able to acquire more window and door producers - we gonna have to bring more accessories
to the market…new products…increase the value. And I think this is also key here. This is a
third thing: increasing the value of the products we are selling because we are in a building
material industry…a price-pressed product, which has…if you don't differentiate you will use
your margin in the end because it is definitely a price-market…I think that might be the key
driver actually…the last one there…So I think that's…you have to upgrade your product and
bring more value to the end-user. Otherwise we will just be a commodity… I mean that might
be the key driver!
Interviewer: Could you please describe how crucial information is shared at Inwido? Is there
a formal process or is it quite informal like door to door conversations?
Interviewee: …intranet…email… I would say email…if its crucial information we make sure
that everybody get it by email… I would say that is the main way…but intranet…it will be
launched on the intranet if its official of course and then by email… I mean it depends what
information…you can have crucial information from the CEO to the management group -
then it is his voice (laughing) So…but if it's to the group in one…then it would have to be
email. But then it's up to every managers position to share information for his department. So,
I mean if Hakan says something to us and the senior management then it's everybody… I
mean business area managers task to bring that home to their organization and so on… So…
I mean if you want to reduce the time (note: time to spread information) by 50%, then you
shouldn't use email. Then you have to do it directly…to do that! Crucial can be… (laugh-
ing)...
Interviewer: Could you please describe the decisions-making process regarding the need for
and the allocation of resources?
Interviewee:…I mean…we have no resources to allocate here…we have a bring to the market
process…we have gates now…we have decided what should be decided in the gates…what do
you need to represent each gate…but like I said, that process is very young. So, I would say
we are… the processes are young, we started to work with it, yes…we are at lot of different
levels in different business areas. Denmark have a go-to-market process that is well described
and very defined… if you like to , I can send it to you...and Gabriel has of course look
through…but then we have also some centralized models, which also have the gates and a bit
simpler just to get everybody on board to use a go-to-market process and product development
process to get a structurized, to get a cross-functional teams in place from the begin-
ning…supporting the process…it's been very much R&D, procurement and production and
then you present something to the market… the managers and say "Can you sell this?"
Observers supplement: The term resource allocation needs more detailed introduction and
demarcation before raising a question about it.
Interviewer: What means change to you? In any kind.
Interviewee:…. Change is hard. I think it is the hardest thing we do. I think it is very easy to
start change but going full-circle is hard. So, change to me is when you have…putting out an
idea out there.
When you gotten an alignment with people, you gotten everybody…at least most part on
board. You start pulling on the machine, you get the last people on board and they see they
have to follow or they see it is a good thing. And then you bring a full-circle…until
you…until you gotten all you can out of that change and then it will evolve into a new
change…cause then you will…the process will go full-circle and then you will come up with
the next circle and change again. And evolve. So, I think change is bringing from the start
side…an idea from start to finish and getting the alignment and the follow from all the re-
sources…and stakeholders.
I know…change is hard like I said… the one that really manage change are fantastic people
and their are not that many and I'm one of those…you…the last part is very hard…and when
you look at history books its not that many…that are very good at it. So, if you can master
that you're in a good position (laughing)
Interviewer: Could you please describe the currently on-going change process or processes
at Inwido?
Interviewee: First, we are going through many! Change processes! I guess I take one..and…I
take one…and then I choose…"Going from a supplier to the building material industry to… a
company of consumer products. And that is for us a long process that will take time….and… I
think we're at the stage where we have created an internal understanding of what it means to
be… having…that's one of our core values (note: ?) "Consumer in mind"…it is…not only our
customer in mind, which is often business to business. Which it was historically! So we had
our wholesalers or building material industry in our…in our minds all the time - what do they
want?! But also having our the end-use, the consumer in mind. And getting them to go in and
ask for our products. So, when they talk to the carpenter then they don't leave it up to him to
decide what windows he chooses and what brand…they actually tell them "I want Elitefön-
ster" or whatever brand we have in our portfolio. I think this is a process on-going and that
started maybe two years ago and it will…it will continue on until we are regarded…from the
end…we have a definition of when we say it is fulfilled and when the change is actually in
place…if you like to , I can send it to you.
Interviewer: Do you feel affected by this change process in any kind?
Interviewee: Well…Since it's not a drastic process, not a drastic change for us, it is not a
burning platform…even though maybe it should be but it hasn't been presented that way… it's
been slow process of understanding of that we have a consumer product in our portfolio. Its
actually used every day by our consumers. But doors…we haven't appreciate the value of
that…you can't see who made it. Our brand could be visible for twenty or thirty years..ad we
haven't used it…crazy!!! (laughing) Crazy! Very important and crazy that we haven't used it.
Observers supplement: He is not answering to the question. Should I asked again!?
Interviewer: But do you feel affected by this change process in any kind?
Interviewee: NO! And no-one work-divisino…what is happening is that…our marketing fo-
cus… I would say our marketing is today more focused on the end-consumer…so, yes, we
have probably one or two more people in marketing than we had before…so… more focus on
that side. But I don't think that it has changed the way of working for people.
I mean we have business concepts that have gotten more validated by this. So, our direct
channels…we're now saying that this is the key for the future to having that direct channels
and talk to the end-consumer to getting the direct feedback. So, in that sense the company had
changed…we make sure…we appreciate those business models. We didn't have them before
but now we are more focused and appreciate it.
Interviewer: So, in general you can say more open-minded?
Interviewee: Yeah, I would say
Interviewer: Adapted: Could you please describe why Inwido sold its Home Improvement
business area?
Interviewee: Ja…It was bought to be base for accessory sales… it was never integrated as a
part of the window sales. Their range of products was not a perfect fit. We knew that going in
but we…we thought we can complement their product range and then take their experience in
accessories, which is what they sell actually… a lot of different small products… but there
was never a real connection between windows and their product range established. Therefore,
we decided it's not core business and we let go. I think it was not driving our core business
sales. The accessories we want to sell should be connected to our windows and doors some-
how and we didn't think that their products…we did and we never put the effort in to make
them a part of it. It was always a separate business.
Interviewer: Could you please share your opinion about why the Home Improvement busi-
ness areas was not successful?
Interviewee: Ja, we never used their…that organization that they had for working with acces-
sories and implemented in our windows and door business. And the knowledge that they had
was kept for themselves! It was never integrated in the window and door business. The win-
dow and door business was too stable… I would say too old-fashioned in their ways to…
management problem I would say…we could…we never consolidated in together…we took
help from each other and we (incomprehensible) prices from time to time but it was on a very
limited scale. So…it wasn't really a…they already had the same customers. So, we were al-
ready on the same customer base, retailers. They had their business model and… one plus one
did not really make two. In that sense it was more strategically right to keep them separate.
Maybe to help on specific projects but that didn't happen…
Interviewee: How far are we? I just have to...
Interviewer: We are going to speed it up from now on.
Interviewer: What happened to the formerly tied resources (assets, people, knowledge, etc.)
Interviewee: Nothing (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which is
offered through the current BM? For Elitefönster as well as for Inwido or in general.
Interviewee: …ja, we actually have a new mission…or value proposition…we put in there as
well… in general it is bringing well-being to people…and that has been since… a couple of
years now. I think this is a good way of seeing…a good way of describing what we want to
do. But there's also a safety-level, easy-to-use, and being recognized as part of the home…but
again only as a building material.
Observers supplement: Is talking about mission, vision and image rather than value proposi-
tion
Interviewer: Do you think your customers/consumers think the same?
Interviewee: No, we don't have any!
Interviewer: ...
Interviewee: I mean… I'm probably a little off but do people choose Elitefönster because they
feel its safe? Its trustworthy? Its reliable? Its dependable? And its the biggest brand?…ja, they
connect that with the brand. And that is well-being of course. Feeling safe and having all that.
So, for some of our brands…ja, a lot of well-being fits. But have they… in that sense, yes,
well-being affects our customers absolutely… but do they regard it as bringing well-being to
them…I'm not sure… (laughing) it's tricky (laughing) yeah, I guess we are market leaders and
we got strong brands… we…we have… it's a certain comfort-level to choose our brands… I
would say…its Volvo that you buy…. I would say. In other brands its also service-level and
price...
Interviewer: What do you think about the simple terms "brand-awareness" and "getting-the-
job-done". Meaning, a Elitefönster is offering one essential purpose, its just serving with hav-
ing a window in my house.
Interviewee: …ja…jaa..I guess…its fulfilling its purpose…yeah, absolutely!
Its a safe choice and a reliable one and one that is often recommended to them… I would
say… by retailers, carpenters… they trust the quality, easy-to-install, has all the value of a
window that the carpenter likes and therefore they recommend it…ja… I would say you don't
change your windows because its fun (laughing) you have to do it (laughing)
Observers supplement: In general a lot of guessing out in the blue. Do retailers and carpen-
ters really recommend - they don't know.
Interviewer: Inwido is planning to spin-off a new venture to increase the innovation speed.
Are you aware of that? What do you think about it?
Interviewee: …depends on what you mean…because… we are… I mean there are a lots of
ideas of having new ventures… so you don't know about them… I mean of those projects… I
know you guys with Gabriel have talked about different new setups and models… but It’s
great… I like it…its perfect! Bring it on. I'm very open to it! Then we have to decide fur-
ther… how we use our brand, names and so on, the model and what can be sold and how we
do it and everything. Just to secure that our brands are not… maybe mixed and connected too
much with new ideas that just want to test and then maybe discard… but still you have to test
them. We have to define a good setup there but them I'm up for it! Yes, very good.
Interviewer: I just wanted to figure out how and when information regarding innovation pro-
jects are shared and approached
Interviewee: … I mean…we… it is a… Gabriel and I discuss and when we come up with
something maybe together with Jonna…and then we build it and then we present it. We don't
share all the time and we don't have a good coffee room (laughing) in a good way… I mean
we should if we want to be a very innovative company but we have more small clusters and if
we have something we bring it up… I would say we work like that.
Interviewer: Could you imagine any main barriers and obstacles affecting a process of spin-
ning of a new venture - from your point of view.
Interviewee: … not… I mean if we are talking about the open innovation as a new venture as
putting out a place… a market place to test new ideas… as long as you can do that… yeah, an
obstacle can be if its start being really connected with our core brands the window and door
business then of course it will be a… it will put a lock on the ideas that come in because then
we have to monitor that it not negatively affect the brand values and it always has to go along
with our brand. So, if it can be under our roof as spin-off and letting entrepreneurs test ideas
and having a platform for that without a direct connection to Elitefönster or Hemmafönster or
other brands and maybe just to Inwido…Yeah, I think that could be an obstacle.
If the ideas that come up are so connected to a certain brand then they might not get tested
because they are wacky… (laughing) … and not really core for that brand and that we will
have the brand police in person of Jonna in running first over there and saying "You can't test
that while being so closely tight to Elitefönster if its so way of what they are stand for!" of
course it should be linked to windows and doors5 somehow but connect them to a brand can
be a little difficult. So, that's a challenge. Because sometimes you need that to get the pull, to
get the sales, to get it really tested, And on the other hand if it's too wacky you might not want
to connect it to one of our brands until it's tested…So, that's an obstacle.
Interviewer: How does window/door of tomorrow look like? From each perspective, you in
your role as a potential customer/consumer as well as you as part of Inwido.
Interviewee: …I won't go into design… I should be able to chose the style and design that I
want that fits my house. They (note: windows/doors) should be dynamic and having accesso-
ries that makes them dynamic. They let in energy when they should. They keep energy in
when they should.
And they keep energy out when they should - they should be dynamic. I should be able to
monitor them… remotely… I should be open my door…who is staying outside, which means
I need a camera in my door…should be already implemented in the door. So, we get the sale
(laughing)…and needs to be a plug’n’play system…so its not…if you buy its today it's very
complicated…you have to be smart and love it. You should buy this, get a control box and
you just match your windows and doors to the box and you're off! It will help me to control
my indoor-climate by being dynamic. I will also have the opportunity to open and close my
system for foreigner, for example carpenters or whoever is delivering something… I can open
the door from them and close it behind them when they leave. That's technology, not design
like I said.
Interviewer: So, that's it! We're done! Thank you very much for your time! Thank you! We
appreciate that a lot!
Interviewee: Thank you! And of course if you have more, please let me know!
Appendix A9: Second interview transcript – Vice President of Marketing and Sales at
Inwido
Interviewer: What major challenges is Inwido facing during the on-going processes of strate-
gic repositioning and how do you manage to handle this?
Interviewee: What major challenges are we facing, um..
Interviewer: Yes.
Interviewee: I mean, are you, are you talking about the external and internal challenges or...
Interviewer: Yeah, both!
Interviewee: Both? Well, I'll start with the external ones?..., of course it's .. that we are just
doing this to see this turn around when the market is down, when we have some market re-
quests, which makes it more difficult because it has to be very cost effective to see this turn
around.
Interviewer: Okay..
Interviewee: We can not lose to fail because of it.
Interviewer: Okay.
Interviewee: 'Cause we need to do it um.. under, under, I would say: some kind of “market
strain“.
Interviewer: Mhmh.
Interviewee: And... I think that is made upon of the external projections..... since what we are
trying to do is actually something that, I think, both customers and consumers... I mean would
gladly see us do, so I don't see that there would be a big opposition from that point. In some
cases perhaps the channels as such could feel threatened for gross moving, closest to the con-
sumers but if we, if we are doing that in a professional way, I would say, it would rather be an
advantage for us, actually.
Interviewer: Okay
Interviewee: But if it's not handled correctly, that might also be a challenge
Interviewer: Okay
Interviewee: Internally of course there are several challenges, one of them being the hesitance
of people to change, I mean not people feel threatened by change and this is of course a big
change... but again: Communication and making people understand how they can contribute, I
think it's the best way to bridge that and that is something we are putting effort into. I think
we have done that but I think communication can never be overdone in situations of change.
So I'm sure we have to do a lot more in that making people understand the “Whys” the
“Whats” and the “Hows”.
Interviewer: Okay, yeah
Interviewee: So it's very, very important. And then taking we of course also competences is a
big challenge, since I mean driving the business in a different way, puts, I mean, kind of a ???
where we have gaps in competence and again, the market being as it is, we have restrained us
on recruiting people, which means that we need either to do educate the ones we have or we
need to take out old competence and exchange that to new competence.
Interviewer: Okay
Interviewee: And we are doing that, I would say, we have done that over the past three years
to ... ??? logic sense out of the top sixty as we call it: the top sixty managers within the com-
pany, like I think we have exchanged forty of those...
Interviewer: Oh
Interviewee:...during our three years
Interviewer: Okay, okay! That's quite a lot.
Interviewee: Yeah, there has been a big competence restructuring to be able to facilitate the
change. I would say that those are , and then there is also organizational changes of course to
carry the... or to facilitate the change, being the ones we talked about last time with the differ-
ent meetings we participate the marketing and sales management team, the operation man-
agement team that is cross-bordered and... also the of course, I mean, recruiting ??? and also
putting more focus on the R&D and in all our markets and doing the initiative with … is also
a facilitator or at least something that could focus on what we want to do in the future, rather
than what we have done in the past.
Interviewer: Okay, nice. ... thank you. ... do you have a commonly acknowledged overall
aim, which is describing whether the desired strategic change processes, and the repositioning
is successfully completed? Or not?
(...)
Interviewee: We have actually a checklist. We have put down four checkpoints of when we
can call ourselves a consumer driven company.
Interviewer: Okay, nice.
Interviewee: Internally we can call ourselves a costumer company when we drive our business
from the costumers needs and external the costumers are evidences satisfy with our product
services and performance…and when the financial market label us as a consumer company.
So those are the four checkpoints.
Interviewer: Okay, nice. Thank you. Next: the capabilities, I mean you also talked about
competences inside the company and the organization as structure as you said. Would you
stress additional organizational capabilities that are needed to conduct the strategic reposition-
ing process? Or do you think you've already mentioned all of them?
Interviewee: Well, I think what we need is of course, I'm not sure if we need more strategic
thinkers. I think we need more practical doers, who are actually doing the change now. I think
that's the stage we are at. I think we have thought the big thoughts. And now it's down to ac-
tually getting that out in the whole order making sure that everybody understands and every-
body understands their own role in this and why it's important and why we think this is good
for the future.
Interviewer: Okay
Interviewee: I think there are some business areas we have so much further and in others we
have quite some way to go, still.
Interviewer: Okay, nice. Okay. The last time you also talked a bit about the organizational
structure and that you changed to the light-matrix structure. So would you say that the change
from your old structure to the light-matrix structure was caused by the ambition to change the
company, the strategy and the positioning in the market?
Interviewee: Yes!
Interviewer: Okay, is there any deeper explanation, I mean...
Interviewee: I mean, it could not be done quickly enough in the old structure..
Interviewer: okay
Interviewee: ...So I mean, to be able to put... more emphasis on the change and that it was
necessary and that it was necessary to get things done quite quickly. There has to be an organ-
izational change. I might even add :I'm not sure that the light-matrix will be able to facilitate
the whole journey, so to say.
Interviewer: Yes
Interviewee: I think perhaps we might... I mean.. in how long time. But I would say within the
next three to five years there would have to be additional organizational changes to really,
really get this going.
Interviewer: Okay, nice. The next point is rewards and motivation. How does Inwido or you
personally as a manager motivate your staff or the organizational members to take part in
change processes or projects in general? So, do you have a guideline how to motivate or do
you do it on individual like perceptions or do you have rewards?
Interviewee: No, we don't have any guidelines but I mean all the TOP 60 managers should
have had for the past two years leadership-training. Where we get trained in how get to moti-
vate our employees. And that was also during the last year that middle management in most of
our business areas that have also gone through leadership training
Interviewer: Okay
Interviewee: Great emphasis has been put on to I mean, change management so, and commu-
nication, so I think we have, I mean we are at least aware of obstacles and also aware of the
importance to motivate people and to get people on board when you're doing changes, so and
then of course it always comes down to each individual leaders and how well they know their
people and how well they manage them.
Interviewer: Okay, thank you. Adapting on this, do you have any like monetary rewards or
like bonus programs?
Interviewee: Yes, we do.
Interviewer: Yeah? Okay.
Interviewee: I mean especially within sales we do but there are so many different bonus
themes. I won't be able to give you one favorite....it's the most common
Interviewer: Okay.
Interviewee: I mean we work through five different channels and within those five different
channels we work in separate ways in different markets, so... I mean it puts things.. The most
general I can. I mean we tried to motivate or incentivize the ones that are moving change the
most of course.
Interviewer: Okay, nice. Um
Interviewee: But I mean, I'm sure there's more we could do on that part.
Interviewer: Okay
Interviewee: Definitely, I'm sure that the, we do not live in a culture that is used to those kind
of individual rewards. That is not been the way that you have traditionally geared the people
in the company. And the explanation of that is of course the.. I mean we are coming from this
production cultural background and all the different production facilities that are somewhere
in the middle of nowhere where people are more or less like: they want to stay there, they
need a job and our factories are almost the only choice they have. So, I mean that means that
you haven't had to incentivize people .. You know in any other way
Interviewer: Yeah, sure.
Interviewee: ???…. I mean, That's also trying to change the culture but then I mean you get
failed people and those are not situated always at the factories but actually in other cities then
of course those ways of motivating people coming to the full???... way
Interviewer: Mh okay, nice. So I assume that rewarding and incentivizing became more
common during the last years?
Interviewee: Yes! Yeah, I mean there has been sales competition started and other kinds of
competitions, I mean, nowadays since the last three years, we're also rewarding the best
indegen business area every year and so on. So there has been, yes!
Interviewer: Okay, nice. So let's talk about processes as such are. Have any changes been
made to lateral or vertical processes? When I'm talking about lateral processes I mean some
for example new development processes and when I'm talking about vertical processes it's
more about what you mentioned: trainings or budgeting process, R&D restructuring and so
on. Do you know what I mean?
Interviewee: Yeah, I know what you mean, I would say that, I mean we, during those 3 or 4
years, I mean we've established quite a few processes that wasn't here before. R&D process
was not here, there was no cross boarder-sales process, uhmm, there was no more common
structure for example within my area, the marketing and sales accounting, follow-up on
brands. That's quite a few.
Interviewer: Yeah, It's okay if you answer briefly. So it's fine. And, I mean actually I'm al-
ready aware of it but: You also tried to or already did in some business areas change the prod-
uct development process, right?
Interviewee: Yeah! I mean, there has actually been, I would say most of our business areas.
There [in most business areas] have been no structured processes before! So that is something
that has been established over the last three years and then of course something that is terrible
while others think it's great, so.
Interviewer: Sure. Okay, thank you. Actually it's the last question and again it's quite subjec-
tive: Do you think that Inwido's existing culture allows you to drive those kind of drastic
changes and this repositioning from a supplier in the building industry to the consumer mar-
ket?
Interviewee: In our culture?
Interviewer: Yeah, culture.
Interviewee...) I mean we are changing the culture. The culture from before would not allow
this change but since we are changing the culture. I mean that's part of the whole strategy pro-
cess.
Interviewer: Definitely! Could you describe in three to five words what is the current cul-
ture?
Interviewee: I would say that the traditional culture was very much, actually... the production
orientation. I mean we've sold what we could produce. I would say that was it very much. It
was. We looked into our factories and thought: What can we do and what are we good at and
then we produced that and then we tried to find someone to sell it to. And if we found a good
customer we did everything to keep that customer. I think that has been the traditional culture.
Everything came out of the production, very technical production orientation??? The culture
we're in right now is in between cultures I would say.
Interviewer: Yeah, definitely!
Interviewee: Since it's not been implemented I would say. But the culture we are driving to is
of course, to have a consumer orientation and happy become a consumer orientated company
with the parts that I have told you about. I mean the pillars of that is of course also the corpo-
rate value so with the consumer in mind…. to improve the competent people at hand. Those
are the three corporate values and I think they are the pillars upon which we try to make this
pretty big change.
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doc_373649111.pdf
This thesis aims stress out the key challenge organisation might face, if the changes in the environment reveal the need for a strategic repositioning.
I
Faculty of Economics
Subject Corporate Entrepreneurship and Innovation
Chair of Entrepreneurship
Master Thesis
Supervisor: Joakim Winborg
Strategic repositioning in the construction industry –
An examination of main challenges
Hand in by:
Mundt, Tim-Ole
Ladugardsmarken 411
22591 Lund
Student-ID: 851007-T759
Email: [email protected]
Programme: M.Sc. Entrepreneurship/Corporate Entrepreneurship
Date:
Lund, 29th of April 2013
Key words: Strategic repositioning, strategic renewal, Challenges of change pro-
cesses, Strategic Entrepreneurship, Corporate Venturing, Construction Industry,
Spin out
II
Abstract
This thesis aims stress out the key challenge organisation might face, if the changes in
the environment reveal the need for a strategic repositioning. In particular this thesis
examines the perceived organizational challenges that might occur, if an organizations
tries to reposition itself by spinning out a new venture that aims to create a new combi-
nation of products and markets. To illustrate how firms may tackle the occurring chal-
lenges, a model is proposed that points out what key challenges companies need to con-
sider when pursuing a process of strategic repositioning. On the one hand, this paper
classifies strategic repositioning as a strategic initiative dedicated to the domain of stra-
tegic renewal, which can be perceived as one of the main streams of strategic entrepre-
neurship. On the other hand, it will point out several challenges that are directly interre-
lated with a specific form of corporate venturing; the spin out. In effort to combine the-
se two elemental streams of corporate entrepreneurship, the here used concept of strate-
gic repositioning is referring to a range of theoretical concepts that reflect a broad per-
spective on the area of entrepreneurship theory. The theoretical framework majorly con-
sists of two superordinated streams: Firstly, theory dedicated to strategic repositioning
(Reichel, 2005; Ryan, Moroney, Geoghegan, & Cunningham, 2007; Turner, 2003),
which also includes a classification and distinction of the framing domain of strategic
renewal (Agarwal & Helfat, 2009; Kuratko, Covin, & Morris, 2011). Secondly, theory
discussing the main challenges of organizational change with a focus on strategic re-
newal and strategic repositioning (Agarwal & Helfat, 2009; Ryan et al., 2007). Thereby,
the conceptualization of the business model (Cavalcante, Kesting, & Ulhøi, 2011;
McGrath, 2010; Morris, Schindehutte, & Allen, 2005; Osterwalder & Pigneur, 2010)
will be highlighted in effort to outline it as a particularly relevant key challenge with
regard to the spin out as carrier of the strategic repositioning process. Subject of the
conducted case study is Inwido, a multi-national construction company based in Swe-
den that is settled in the window and door industry. To gather the required information a
range of qualitative data was collected embracing semi-structured interviews as well as
the employment of secondary data sources. In a further step the gathered data is ana-
lyzed and compared with relevant literature to reveal implications to the proposed theo-
retical model. According to the findings final recommendations are stated to deduct
further implications for other companies in the construction industry or unrelated indus-
tries that face similar challenges.
III
I TABLE OF CONTENT
I Table of Content ................................................................................................................. III
II List of Abbreviations .......................................................................................................... V
III List of Figures ................................................................................................................... VI
IV List of Tables ................................................................................................................... VII
1 Introduction ........................................................................................................................ 1
1.1 Background ............................................................................................................. 1
1.2 Problem discussion ................................................................................................. 2
1.3 Research question .................................................................................................... 4
1.4 Purpose .................................................................................................................... 5
1.5 Key concepts ........................................................................................................... 6
2 Theoretical frame of reference .......................................................................................... 7
2.1 Strategic renewal ..................................................................................................... 7
2.2 Strategic repositioning .......................................................................................... 11
2.2.1 Distinction and conceptualization ....................................................... 11
2.2.2 Diversification and concentration strategies ....................................... 14
2.2.3 Differentiation of SRP to Diversification and Concentration ............. 16
2.2.4 Static and dynamic perspectives ......................................................... 16
2.2.4.1 Market based view (MBV) – A dynamic view .............. 16
2.2.4.2 Resource based view (RBV) .......................................... 17
2.3 Key Challenges of strategic repositioning processes ............................................ 19
2.3.1 A framework of strategic repositioning .............................................. 20
2.3.2 A conceptual framework of challenges dedicated to SRP .................. 25
3 Method .............................................................................................................................. 30
3.1 Overall research design and process ..................................................................... 30
3.2 Data collection ...................................................................................................... 33
3.3 Method for data analysis ....................................................................................... 38
3.4 Reflections of method choices .............................................................................. 40
4 Presentation of results ..................................................................................................... 43
4.1 Repositioning in practice: A case study of Inwido ............................................... 43
4.2 Key challenges ...................................................................................................... 52
5 Analysis and discussion ................................................................................................... 62
5.1 Strategic renewal ................................................................................................... 62
5.2 Key challenges ...................................................................................................... 64
5.3 A revised framework for successful strategic repositioning ................................. 68
IV
6 Conclusions and implications .......................................................................................... 70
6.1 Conclusions ........................................................................................................... 70
6.2 Implications for research ....................................................................................... 71
6.3 Practical implications ............................................................................................ 72
7 Appendix ........................................................................................................................... 74
8 List of Literature ............................................................................................................ 132
V
II LIST OF ABBREVIATIONS
BA Business areas
BM Business model
CBU Core business units
CR Customer relationship
IP Intellectual property
M&A Mergers and acquisitions
PDP Product development process
RQ Research question
SBU Strategic Business Units
SME Small and medium-sized enterprises
SRP Strategic repositioning
TMT Top management team
TOP 60 Group of 60 executives representing the top management
team of Inwido’s
VI
III LIST OF FIGURES
Figure 1: Strategic Renewal as fundamental From of Strategic Entrepreneurship .......... 9
Figure 2: Classification of strategies according to Welge and Al-Laham (2003) .............. 10
Figure 3: Classification of strategies according to Ansoff (1957) ....................................... 12
Figure 4: SRP as Diversification Strategy according to Ansoff (1957) .............................. 13
Figure 5: The concept of SRP as combination of Diversification and Concentration ...... 14
Figure 6: Classification of different Forms of Diversification according to H.I. Ansoff
(1965) adapted from Reichel (2005) and Bamford and West (2010) . 15
Figure 7: A Conceptual Framework of Challenges in Strategic Repositioning ............... 25
Figure 8: Process of Building Theory from Case Study Research according to
(Eisenhardt, 1989). ................................................................................. 32
Figure 9: Conceptual draft of data analysis method, adapted from Ghannad (2013) ..... 38
Figure 10: The overall research path (marked in bold) of the study, adapted from
Ghannad (2013) ...................................................................................... 40
Figure 11: Structured growth through acquisitions ("Inwido Company Presentation,"
2012) ........................................................................................................ 43
Figure 12: Inwido’s “Light-Matrix” Structure ("Inwido Company Presentation," 2012)46
Figure 13: Inwido’s Brand Portfolio ("Inwido Company Presentation," 2012) ............... 48
Figure 14: Inwido’s business structure – Brands, Segments, Channels, and Offerings
("Inwido Company Presentation," 2012) ............................................ 48
Figure 15: Inwido’s strategic goals ("Inwido Company Presentation," 2012) ................ 50
Figure 16: A Revised Conceptual Framework – Perceived Challenges of Strategic
Repositioning Processes of a Multi-Brand Corporation in the
Construction Industry ........................................................................... 69
VII
IV LIST OF TABLES
Table 1: Overview: Case study design ................................................................................. 30
Table 2: Definition and Operationalization of concepts related to challenges of
strategic repositioning and BM change ................................................ 36
1
1 Introduction
1.1 Background
Adapting to a dynamic business environment has always been challenging for or-
ganizations (Aggarwal & Mudambi, 2005; Barker Iii & Duhaime, 1997; Chan & Soong,
2011; Christensen & Overdorf, 2000; McGrath, 2010; Phan, 2011; M. Porter, 1985;
Ryan et al., 2007; Stahl, 2005; David J Teece, Gary Pisano, & Amy Shuen, 1997;
Turner, 2003). On the one hand, strategic basic decisions regarding the way of how to
enter a market (e.g. innovator or follower) or how to achieve a competitive advantage
(e.g. segmentation, differentiation, cost leadership) had to be made (Ansoff, 1957; P.
Kotler, Keller, Brady, Goodman, & Hansen, 2009; M. Porter, 1985). On the other hand,
more concrete strategic decisions need to be taken regarding how to create and capture
value for the customer (Osterwalder & Pigneur, 2010), how to design the value chain to
deliver the created value to the target markets (P. Kotler et al., 2009), and which re-
sources and capabilities required for these processes (Chan & Soong, 2011; Dittrich,
Duysters, & de Man, 2007; Halme, Lindeman, & Linna, 2012; Ryan et al., 2007; Sama-
vi, Yu, & Topaloglou, 2009; Turner, 2003). A changing business environment challeng-
es this already complex process by adding a dynamic component: industry consolida-
tion, globalization, new information technologies, and rising customer expectations are
driving the further changes in the marketplace (Aggarwal & Mudambi, 2005, p. 48).
Further, Aggarwal and Mudambi (2005, p. 48). claim that especially manufacturing
companies need to develop proactive and effective strategy to improve their efficiency
in this cyclical, slow growth industry. With other words, an organization needs not only
to determine the variables describing what in stands for (vision) and how it will achieve
this idea of itself (mission) (P. Kotler et al., 2009), it also need to revise these variables
according to changing conditions that are affecting the organization (Agarwal & Helfat,
2009; Chan & Soong, 2011; Turner, 2003). If these changing conditions and increasing
customer expectations require a re-examination of the strategic market position and
force companies to substantially altering their product-market combination at the ex-
pense of pre-existing product-market combination one can refer to the term strategic
repositioning (SRP) (Aggarwal & Mudambi, 2005; Ramanujam & Varadarajan, 1989;
Reichel, 2005; Ryan et al., 2007; Turner, 2003).
2
1.2 Problem discussion
G. A. Hamel and Prahalad (1994) claim that in a turbulent environment strategic
change is often considered as crucial for organizations to survive. Among others, Dit-
trich et al. (2007) propose that theory often refers to intense competition and drastic
technological changes (Eisenhardt & Tabrizi, 1995; Sadowski, Dittrich, & Duysters,
2003) as primary motives for companies to change their corporate strategy. Dittrich et
al. (2007) argue that firm’s new strategic directions are needed to facilitate the neces-
sary strategic change (Dittrich et al., 2007, p. 1497) Thus, they propose that the demand
for strategic change comes first, then firms attempt to gather the capabilities needed to
facilitate this change, and resultantly the strategic repositioning process in the market
can be concluded. (Dittrich et al., 2007, p. 1497). Picturing the proposed approach of
Dittrich et al. (2007) one could assume that strategic repositioning (SRP) is a general
logic consequence of a strategic change process. Thus, the author recognised the need
to delimit SRP from this broad generic strategic classification and propose SRP as dedi-
cated to the domain of strategic renewal (Kuratko et al., 2011). Agarwal and Helfat
(2009, p. 282) claim that strategic renewal “…includes the process, content, and out-
come of refreshment or replacement of attributes of an organization that have the po-
tential to substantially affect its long-term prospects.”
Following this classification literature is relating to SRP in a much broader range.
Ryan et al. (2007) argue that “repositioning has been variously employed as essential to
corporate transformation” (Dunphy & Stace, 1993) or as “an element of corporate-
level strategy”(Thompson & Strickland, 2003). Furthermore, Ryan et al. (2007) refer to
SRP as a strategic response in dynamic environments, which can be perceived as over-
lapping to the already mentioned general characterization of strategic change of G. A.
Hamel and Prahalad (1994). Finally, Michael E Porter (1996) is drawing a picture of
SRP as integral to strategic competition and Williamson (1999) uses the term SRP in-
terchangeable with the term turnaround. A turnaround or turnaround management can
be described as a process dedicated to the domain of strategic change (Barker Iii &
Duhaime, 1997) and Ryan et al. (2007, p. 83) add that a turnaround can be described as
radical form of strategic change, which is persuaded by performance drops that threat-
ens subsistence of the organisation.
3
Although, turnarounds most often imply “cutback actions” (Barker Iii & Duhaime,
1997), strategic turnarounds can also be differed “… into those that involve a change in
the organization's strategy for competing in the same business and those that call for
entering a new business or businesses.” (Hofer, 1980, p. 20). Although, SRP shares
parallels with strategic turnarounds (e.g. fundamental strategic character, attempt im-
prove the designated value proposition under performance is challenges), there are ma-
jor differences between both concepts in terms of each concepts nature, scope and path
of change (Ryan et al., 2007, p. 85). In this respect, SRP should be differentiated from a
strategic turnaround (Ryan et al., 2007). With reference to Walsh (1995) and Ra-
jagopalan and Spreitzer (1997), Ryan et al. (2007). they claim that the emphasis of
SRP is on processes of both positive, mental mapping complemented by strategic learn-
ing, in which change is largely endorsed . Further, they claim that change is supple-
mented by supportive entrepreneurial action, which brings SRP closer to the domain of
strategic renewal as also Kuratko et al. (2011, p. 98) claim by proposing the reversely
integration of SRP into strategic renewal. On the other hand, a strategic turnaround,
involves expedient, forced operational intervention (Ryan et al., 2007, p. 98).
Consequently, Ryan, Moroney, Geoghegan, and Cunningham (2007) argue that
“repositioning” within the conceptualization of the term strategic repositioning is not
well elaborated and is lacking supporting citations (Ryan et al., 2007, p. 83). Further,
they claim that this lack of theoretical conceptualization is missing clarity and reveals a
process, which is underspecified (Ryan et al., 2007, p. 83). According to Turner (2003)
reposition is to change the way in which a company’s offering is regarded in the mar-
ket. Thus, SRP appears as a conscious act conducted by corporations as attempt to adapt
to an altering commercial environment (Ryan et al., 2007, p. 84). Turner (2003, p. 251)
defines repositioning as largely driven by a rising gap between market needs and the
corporation’s capabilities. Thus, with reference to Baghai, Coley, and White (2000),
decisions concerning SRP aspects are founded upon a company’s capabilities to merge
the internal and the external environment by discovering a match between requirements
of the particular market and the firm’s ability to serve them (Turner, 2003, p. 251).
Based on these assumptions Ryan et al. (2007) propose a framework for successful
SRP based on six elements: core strategic values, strategic flexibility/learning capabili-
ties, customer awareness and sensitivity, external orientation, management commit-
ment, and belief in the product and brand.
4
Their proposed framework for successful repositioning is based on Turner (2003),
who discussed issues and challenges of repositioning strategy of Cable and Wireless
(C&W), which established market places were increasingly mature with limited poten-
tial for growth. The author refers, among others, to Ryan et al. (2007) self-proclaimed
provisional template for successful repositioning and Turner (2003), as one of the start-
ing point to stress out key challenges of SRP.
Nonetheless, the author argues that current literature has only partially examined
occurring key challenges, especially in the context of a SRP process that embraces a
spin out initiative. Thus, this report tries to contribute by providing an frame majorly
based on the following three theoretical concepts: Firstly, presenting a brief conceptual-
ization of the term “strategic repositioning” based on a generally acknowledged theoret-
ical underlying. Secondly, analysing the main challenges that may occur during a pro-
cess of strategic repositioning. To also provide practical implications the study is based
on a business case. Subject of the case study is the Inwido Group, which is facing the
challenges of an on-going change process affecting its strategy, structure, processes,
culture, peoples, product offerings and markets. Furthermore, Inwido questions if new
ways are needed to pursue the desired strategic change. Therefore they raised several
initiatives to reposition Inwido in the market. One of these initiatives is the spin out of a
new venture that should target the designated market segments in a so far unemployed
combination of channel, offerings, and target groups.
1.3 Research question
As the topic of this thesis addresses the examination of the organizational key chal-
lenges of strategic repositioning and it should be stressed that the author tries to espe-
cially highlight the challenges that might occur with regard to individual and organiza-
tional capabilities within the processes of strategic repositioning. As Ryan et al. (2007)
claim that theory on strategic repositioning is not very exhaustive also interrelated gen-
eral organizational challenges should be investigated further on. This approach will also
contribute to derive key challenges that can be applied as valid to SRP. Thus, the desig-
nated research question aims to contribute to close this academically gap. Hence, the
research question is stated as follows:
What are the perceived key challenges during an organization’s process of strategic
repositioning?
5
While chapter one introduces the reader in the general topic of the thesis, the overall
structure of the thesis can be described as follows: Firstly, the second chapter provides
an overview of the literature relating to SRP and interrelated key challenges, which will
close with a proposed conceptual framework. Secondly, an outline of the methodology
follows in the third chapter. Thirdly, the chapter four employs the story Inwido’s reposi-
tioning strategy, which is presented through several excerpts and statements out of sev-
eral conducted interviews. Also, secondary data sources are employed. In the fifth chap-
ter the gathered data is analyzed and the revision conceptual framework is proposed.
Finally, the sixth chapter employs the final conceptual model and a discussion of the
theoretical and practical implications is presented.
1.4 Purpose
This thesis studies the key challenges of strategic repositioning. It examines the ef-
forts of an Swedish based window and door multi-business manufacturer that employs a
conglomerate of several corporations (Inwido) to reposition itself as part of a process of
strategic renewal. Centred on an in-depth case study, the thesis proposes a framework
that addresses the main challenges of pursuing successful repositioning strategy.
The Inwido Group is a multinational Swedish based window and door manufac-
turer corporations and one of the largest manufacturer conglomerates of windows and
doors in Europe (Linden, 2012). During the last ten years Inwido grew from a company
with barely one billion SEK to a multi-brand (Appendix A1) and multi-market (Appen-
dix A1-A2) conglomerate with a turnover of over five billion SEK and 3200 employees
("Inwido Company Presentation," 2012). The organizational network of Inwido is based
on a through mergers and acquisition (M&A) grown conglomerate of formerly inde-
pendent companies (Linden, 2012). Historically, the window and door industry is char-
acterized by only incremental innovations, which are more or less based on product
quality improvements, cost reductions and additional service offerings (Linden, 2012).
Especially applied to Inwido, also valuable customer long-term relationship is lacking
(Linden, 2012). Responding to that Inwido’s ambition is to explicitly find more radical
innovation and to shift its focus from a supplier for windows and doors to a company
that predominately targets the end consumer market. To further pursue its on-going rad-
ically strategic change process towards an organic growth strategy a drastic reposition-
ing in terms of establishing a new strategic business unit (SBU) that targets the end-
consumer market with new products is considered (Appendix A3-A8).
6
Since the setting of the research, a spin out, was not established during the data col-
lection phase proposed challenges can be described as mostly individual perceptions of
the executives that took part in the data collection phase.
1.5 Key concepts
In an effort to construct a substantial understanding of the research question, the
key concepts will focus on the classification and determination of the term SRP, and
highlight key challenges of organizational change processes.
Apart from the Ryan et al. (2007) proposed framework for successful SRP this thesis
points out two other approaches to classify essential elements of SRP (Aggarwal &
Mudambi, 2005; Chan & Soong, 2011). This approach will also contribute to derive key
challenges of SRP, since one can claim that theory regarding this specific suspect is not
extensive (Ryan et al., 2007)
Adapting on this dearth of theory (Ryan et al., 2007) regarding the specific sus-
pect of SRP, the author also employs concepts and frameworks that address the key
challenges of general organizational change processes. Thus, the thesis is employs the
eight steps framework to lead change according to Kotter (1996), which can be also
recognized as a statement of key challenges that need to be recognized during organiza-
tional change processes (Phan, 2011). Additionally, insights of Waterman, Peters, and
Phillips (1980) (“The McKinsey 7S Framework”), Adner (2002) and Tripsas (2008),
Agarwal and Helfat (2009) are applied to gather various view on the challenges of
change processes.
7
2 Theoretical frame of reference
In this chapter the author presents the theoretical frame of the thesis, which results
in a proposed conceptual framework that served as fundamental conceptual frame for
the case study. The frame of reference embraces two major theory frame components,
which were selected in effort to reflect the major theoretical streams of the research
problem. Firstly, the author introduces the reader into the concept of strategic reposi-
tioning (SRP) (see chapter 2.2.) by classifying it under strategic change and further
framing it by the domain of strategic renewal (see chapter 2.1.). Secondly, a consolida-
tion of key challenges of strategic change processes is presented (see chapter 2.3.).
Thereby, the author decided to conduct a multi-stage conceptualization of presenting the
key challenges. This approach was chosen in acknowledgement of Ryan et al. (2007),
who propose that particular theory on SRP is not extensive, while literature regarding
challenges classified to the realm of strategic change and organizational change is repre-
sent in management literature in a broad range (Hannan & Freeman, 1984; Helfat et al.,
2009; Kelly & Amburgey, 1991; Rajagopalan & Spreitzer, 1997; Zajac, Kraatz, &
Bresser, 2000)
2.1 Strategic renewal
To define the term strategic repositioning an initial definition of what it means to be
strategic is useful (Agarwal & Helfat, 2009). They further refer to Rumelt, Schendel,
and Teece (1994) when they claim that the term strategic substantially relates to a firm’s
future prospects and if it has a critical impact on the firm’s success or failure. (Rumelt et
al., 1994, quotted from Agarwal and Helfat (2009), p. 281). Thus, a broad classification
of the term strategic repositioning under the term of strategic change (Ryan et al., 2007)
is undertaken in a first step. Ryan et al. (2007) are referring to G. Hamel (1996) when
they argue that strategic change can be perceived as synonym for radically redesigning a
company’s strategy. Furthermore, they stress that the reorientation of the strategic direc-
tion occurs in many forms in academic literature. According to Hofer and Schendel
(1978) strategic change embraces changes in the substance of a company’s strategy,
which is determined by its scope, resource utilizations, competitive advantages , and
synergy to other fundamental strategic entities (e.g. organizational structure and culture)
(Aggarwal & Mudambi, 2005; H.I. Ansoff, 1965; Ansoff & McDonnell, 1988; Dolan &
Garcia, 2002).
8
Ven and Poole (1995) and Rajagopalan and Spreitzer (1997) further propose
strategic change is defined as the organization's effort to align with its over time altering
external environment. Spector (2007) states that strategic change, though, should not
perceived as a singular concept. Accordingly, one can propose that a drastic environ-
mental change that affects the company’s progress as it is represented by the strategic
inflection point implies the requirement of a set of different strategic change initiatives.
A strategic inflection point can be described as a turning point in the company, the in-
dustry or sector, or the whole economy after which a dramatic change, affects the way a
company thinks and acts since the pre-existing rules of the business environment are no
longer valid (Michael H. Morris, Donald F. Kuratko, & Jeffrey G. Covin, 2010, pp.
208-209). Consequently, with regard to other authors Ryan et al. (2007) propose several
appearance of strategic change in theory and scholarly which are acknowledging the
broad scope of the term strategic change. Some of these appearances are: strategic in-
novation (V. Govindarajan & Gupta, 2001), transformational leadership (Ling, Simsek,
Lubatkin, & Veiga, 2008; Uhl-Bien, Marion, & McKelvey, 2007), turnaround processes
(Barker Iii & Duhaime, 1997; Hofer, 1980), organizational ambidexterity(O'Reilly III
& Tushman, 2011), collective and individual cognition (Eggers & Kaplan, 2009; Mezi-
as, Grinyer, & Guth, 2001; Tikkanen, Lamberg, Parvinen, & Kallunki, 2005), innova-
tion and business model innovation (Breiby & Wanberg, 2011; Calia, Guerrini, &
Moura, 2007; McDermott & O'Connor, 2002; Morris et al., 2005; Samavi et al., 2009;
Shafer, Smith, & Linder, 2005), dynamic capabilities (Barreto, 2010; Helfat et al.,
2009), competition, networks and alliances (Dittrich et al., 2007; Moore, 1993; Zott,
Amit, & Massa, 2011) dominant logic (Bettis & Prahalad, 1995) and also strategic re-
newal (Agarwal & Helfat, 2009; Kuratko et al., 2011). Thus, one can conclude that
there are several views on strategic change reflecting divergent assumptions on the par-
ticular scope of strategic change (Awa & Kalu, 2010; Biazzi, 2012; Church & Ware,
2000; Eggers & Kaplan, 2009; Fondas & Wiersema, 1997; Helfat et al., 2009; Mezias et
al., 2001; Ryan et al., 2007; Samavi et al., 2009; Swartzlander, 2012; Tripsas, 2008).
In a further step, the author refers to the conceptualization of Kuratko et al. (2011, p.
98), who constitute a narrow classification of SRP as an strategic initiative that is spe-
cifically dedicated to the domain of strategic renewal. According to Mische (2001) stra-
tegic renewal can be described as referring to a modification of an organization’s strate-
gy intending to regain sustainable competitive advantage. Furthermore, strategic renew-
al can be either incremental or transformational (G. Hamel, 1996).
9
While incremental strategic renewal basically comprises decisions to expand into
new product or service lines or to capture new market segments, transformational stra-
tegic renewal seeks to fundamentally redefine customer expectations, industry dynam-
ics, and/or the firms generic basis for competition(G. Hamel, 1996; Spector, 2007). Ku-
ratko et al. (2011, p. 98) claim that“…strategic renewal express elemental repositioning
efforts by the firm within its competitive space.” (Kuratko et al., 2011, p. 98). Accord-
ingly, the author recognised the need to delimit SRP from other generic strategic orien-
tations and to classify it under the domain of strategic renewal. Kuratko et al. (2011)
classify strategic renewal as one of five basic forms of strategic entrepreneurship.
Figure 1: Strategic Renewal as fundamental From of Strategic Entrepreneurship
(Kuratko et al., 2011)
The concept of strategic renewal was originally introduce by Ginsberg and Guth
(1990), who describe it as “the transformation of organizations trough renewal of the
key ideas on which they are built”. (Ginsberg & Guth, 1990, quotted from Kuratko et
al., (2011), p.98). Covin and Miles (1999) add a more specific market orientated per-
spective when they argue that strategic renewal describe a firm’s attempt “...to redefine
its relationship with its markets or industry competitors by fundamentally altering how
it competes.” (Covin & Miles, 1999, quotted from Kuratko et al., (2011), p.98). Not-
withstanding, Kuratko et al. (2011) stress out that not all newly adopted strategies
should be perceived as pursuing strategic renewal. Furthermore, they argue that new
strategies can be described as constituting strategic renewal when they express ele-
mental repositioning efforts by the firm within its competitive space (Kuratko et al.,
2011, p. 98).
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10
Kuratko et al. (2011) further argue that strategic renewal as entrepreneurial
event can take place on the firm’s corporate level or on business unit level in case of a
multi-business company. In the domain of strategic management the term “strategy” can
fundamentally classified according to its respective organizational scope (Alkhafaji,
2003; H. I. Ansoff, 1965; Welge & Al-Laham, 2003)
Figure 2: Classification of strategies according to Welge and Al-Laham (2003)
With reference to Michael E Porter (1987), Welge and Al-Laham (2003) claim
that the corporate strategy defines the generic orientation of the firm, which also im-
plies the determination of the SBU in their area of activity and the relationship among
them. A SBU describes a majorly autonomous division of a large corporation that runs
as an independent enterprise with a certain range of products or activities ("Definition of
Strategic Business Unit," 2013). Further Welge and Al-Laham (2003) argue that the
corporate strategy has to declare the portfolio of the SBUs and to allocate the resources
among them.
At the level of the competitive strategy or business strategy the orientation with-
in a specific SBU is determined. M. Porter (1985) proposes that the competitive strategy
seeks to develop and exploit a competitive advantage compared to the competition. The
competitive strategy is basically build on a focus of either cooperation or competition
(Child, Faulkner, & Tallman, 2005; Wheelen & Hunger, 2004). Reichel (2005) claims
that also the three general types of strategies – the generic strategies (Michael E. Porter,
1980), which are determined on the level of the competitive strategy. He further
acknowledges that the competitive strategy of each SBU can differ but is in general de-
ducted from the corporate strategy.
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33
Kind of research question
The design of the RQ was majorly affected by two main sources: Firstly, practical
implications from the designated research object; the internship company Inwido. Sec-
ondly, by past research and theory, which serves as guidance and source of predictions
(Library, 2003). With reference to Yin (2003, pp. 5-6), who basically classifies the type
of RQ according to the familiar series: “who,”, “what”, “where”, “how”, and “why.”,
the chosen RQ (“What are the major challenges during an organization’s process of
strategic repositioning?”) can be assumed as explanatory.
3.2 Data collection
Data collection methods
According to Holme, Solvang, and Nilsson (1997) the choice of methods for da-
ta collection is highly influenced by the research strategy (Ghannad, 2013). With refer-
ence to (Yin, 1994) there are six different sources of evidence in qualitative research:
documentation, archival records, interviews, direct observation, participant-observation,
and physical artefacts. Every dimension should be perceived as complementary to each
other, and has solely viewed no dominating advantage (Ghannad, 2013). This method,
in theory referred to as triangulation (Eisenhardt, 1989; Yin, 1994) or cross-
examination (Cheng, 2005), combines several sources (in general more than two) to
validate data concerning the same phenomenon (Bogdan & Biklen, 2007). Eisenhardt
(1989) proposes the employment of multiple investigators during interviews to simulta-
neously gather data by “interviewing, observing, and protocoling”. Potter (1996) argues
that triangulation is employed to validate that all the observations correspond to one
interpretation and that with this convergence of observations, which is employing many
different ”…sources, settings, and investigators the researcher can make powerful ar-
gument that the interpretation is robust…” (Potter, 1996, p. 153). Richardson (2005) is
criticising that triangulation assumes that there is a “fixed point” or “object” to trian-
gulate. Consequently, she is instead proposing the concept of crystallization, which
analogizes the fundamental characteristic of a “crystal”: viewing a “crystal” reveals
different images depending on how it is held, from what angle it is viewed, and the cur-
rent lightning conditions (Ghannad, 2013; Richardson, 2005). Thus, crystallization is
based on a variety of sources to get different views on the phenomenon, which implies
also the application of any secondary data available and the information provided by
different views on it.
34
Without declaring neither the triangulation nor the crystallization approach as
exclusively valid the author also tried to follow an approach of using multiple sources of
evidence and perceives that there are far more than ‘three sides’ from which to ap-
proach the world (Richardson, 2000). By approaching sources in various ways embrac-
ing interviews, follow-up interviews, ad-hoc questions regarding single aspects of the
same phenomenon, and experimenting with various communication media and commu-
nication time the author tried to create a multidimensional view on the research phe-
nomenon. Also, the it was made use of multiple investigators (Eisenhardt, 1989). In
applying interviews and documentation, basically two data collection method were em-
ployed. Additionally, a technique of observation was used as source to collect data.
Frankly, this source can be perceived as only minor contributing by majorly collecting
highly explorative and interpretative “soft” factors (e.g. interpretation of motivation or
fundamental attitude towards a specific phenomena according to anomaly in the answer
rhythm and structure).
To intergrade the „actors“ into the proposed “multiple view” conceptualizations
an ambidextrous approach was conducted. On the one hand, the idea of constructive
realism (Wallner, 1994) was applied to let the “actors” (e.g. interviewees, questionnaire
participants, etc.) tell their stories and share their experiences, which further implies the
need to attempt to discover the main “themes” from the constructed social reality of the
actors in the later analysis (Ghannad, 2013). On the other hand, pointed questions were
raised and the application of transmitting media was employed in an attempt to delimit
the actors from their social reality (e.g. emails, written interview, etc.).
Selection of data sources
To gather the information, which was identified as crucial and contributing various
sources were recognized as viable. As mentioned before the data collection method was
designed according to a multiple evidence approach. Thus, the selected data sources can
be fundamentally divided into primary and secondary data. Since this thesis was part of
a graduation project, which also embraced a business project at the designated subject
of the case study (Inwido), the author also used data sources that were gathered during
the development of the practical project. This approach can be perceived as an attempt
to harmonize practice and theory. Especially, as the executed business project can be
perceived as highly interrelated to the superposed theoretical domain of this thesis, as it
is strategic repositioning.
35
Hence, the use of overlapping data sources shall be perceived as the author’s
acknowledgement of the close relationship between theory and practice (Schanz, 1985,
1988). Consequently, one can refer to Mundt (2013), who proposed the following data
sources as relevant:
Primary data
The primary data consist of a total of six semi-structured initial face-to-face inter-
views with five different persons, three semi-structured in-depth interviews with two
people (which were part of the set-up of the initial interviewee group), several e-mails
to follow-up on certain topics, and informal discussions and meetings. Especially, dur-
ing the informal discussions and meetings but also during the initial face-to-face inter-
views the author also tried to observe the “actors” nonverbal language to gain highly
interpretative additional implications.
Secondary data
On the other hand, unpublished as well as published company information like
the companies Annual Reports, Inwido’s designated company presentation, a draft of
the official core values, and an internal document regarding the designated goals of In-
wido’s strategic renewal were used as data sources.
Operationalization and development
The below proposed dimensions and definitions should be recognized as an at-
tempt to visualize how the authors approached the key dimension of his research. The
table can be perceived as a visualized orientation during the data collection. It refers to
the work, findings, and theoretical conceptualizations of several researchers and scien-
tists. The general concept of SRP is defined by referring to the six elements framework
of Ryan et al. (2007). . The other dimensions are described by referring to various scien-
tists and researchers, who published findings and theoretical work about challenges of
organizational change, which also have implications for SRP. Talking about BM change
the classification of Cavalcante et al. (2011) was consulted, who classifies the superor-
dinated term BM change into four group: BM creation, BM extension, BM revision, and
BM termination. In a further research process the group BM creation/ BM innovation
(e.g. Christensen & Overdorf, 2000; De Cagna, 2010; Turner, 2003) was identified as
key concept to focus on.
36
Dimension Definition How to evaluate the concept
Strategic reposi-
tioning
The six elements framework for success-
ful repositioning: core strategic values,
strategic flexibility/learning capabilities,
customer awareness and sensitivity, ex-
ternal orientation, management commit-
ment, and belief in the product and brand
(Ryan et al., 2007);
Analyses of historical company in-
formation, interviewing strategic de-
cision-maker and person in key roles
with responsibility for employees
(e.g. marketing, operations, R&D)
Challenges of
strategic reposi-
tioning
Core strategic values, Belief in the prod-
uct and brand, Strategic flexibil-
ity/learning capabilities, Customer
awareness and sensitivity; External orien-
tation; Management Commitment; Strat-
egy; Culture; Business model; People;
Structure (Agarwal & Helfat, 2009; Chan
& Soong, 2011; Clayton M Christensen
& Overdorf, 2000; Kotter, 1996; Ryan,
Moroney, Geoghegan, & Cunningham,
2007; Turner, 2003)
Interviewing TMT and lower man-
agement via proposed “multiple
view” concept; single dimensions are
approached with raising pointed ques-
tions (e.g. Did the SRP process re-
vealed the need to employ additional
staff in key positions due to newly
occurring requirements?)
Table 2: Definition and Operationalization of concepts related to challenges of strategic
repositioning and BM change
Interview guide
The interview guides were developed according to the theoretical framework
proposed in chapter 2. As the research design was previously described as open for iter-
ative adaptions and shift also the interview guide was revised and refined after every
interview session and even within single interviews. Adapting to shifts in the research
focus the several interview guide drafts can be perceived as a result of probing and test-
ing in effort to get more relevant answers. In general the author decided to use the inter-
view guide more as an orienation to ensure that all dimensions of interest were exhaust-
ively approached. The interviews were more held like informal conversations than for-
mal and structured interviews (Marshall & Rossman, 1999, quotted from: Ghannad
37
(2013), p. 104). Drafts of an interview guide from the initial face-to-face interview
phase as well as one of the interview guide from the in-depth interview phase are in-
cluded in the Appendix
Overall, the author and his research team member tried to preserve a passive and
more informal role in effort to contribute to create an interview atmosphere that sup-
ports open talks and a feeling of comfortableness for the interviewee.
Interviews
For the interviews a set of crucial participants was assembled (see Appendix) which
should be interviewed by using both semi-structured as well as unstructured interviews
(Bryman & Bell, 2011). The participants were selected according to a method of pur-
posive sampling but also had slight implications of a method called snowball sampling
(Potter, 1996, quotted from: Ghannad (2013)). Snowball sampling can be perceived as a
concept that starts with a purposive sampling, which can be described as a technique to
identify and select key informants that provide the characteristics, according to the
needs of the developing analysis and emerging theory (Moorse, 2004). Furthermore, the
snowball sampling technique is based on a individual recommendation method, in
which every interviewee names additional respondents that can contribute according to
their set of characteristics (Moorse, 2004). Potter (1996) claims that this approach con-
tributes to increase our knowledge about the phenomenon under investigation (Potter,
1996, quotted from: Ghannad (2013)). Applied to the author’s case the initial interview-
ee, who also was the practical supervisor of the graduation project, named viable poten-
tial respondents during the early phase of data collection as well as during a phase when
the theoretical construct became much more distinct. Thus, the sampling method can be
perceived as a modified form of the snowball sampling technique. Based on this major-
ly, three interviewees, all members of the top management team (TMT) of Inwido were
identified as crucial data sources. Those three were approached repeatedly incorporating
the previously mentioned diversified application of interview techniques and media to
add more “angles” to the investigation (Ghannad, 2013).
Since two interviewers conducted the interviews also the technique of unique indi-
vidual roles (Eisenhardt, 1989) was employed. During conducting the interviews this
tactic was applied in terms of using on main interviewer while the other team member
took notes of both the responses as well as the observations. These roles could change
between and even within the single interviews.
38
In this context both team members, could contribute to the conversation within a
subject area of specific individual interest. All interviews were audio-recorded with pro-
spect of potential to follow-up questions.
3.3 Method for data analysis
Figure 9: Conceptual draft of data analysis method, adapted from Ghannad (2013)
According to (Miles & Huberman, 1994) the process of qualitative data analysis
involves three interrelated/synchronized activity streams: data reduction, data display,
and conclusion drawing.
Data reduction can be described as process of selecting, focusing, simplifying,
abstracting and transforming (Ghannad, 2013) the data gathered trough field-notes or
transcriptions. Ghannad (2013) further argues that the process of data reduction even
starts before the data collection (e.g. the chosen conceptual framework or the type of
research question) and that it should be perceived as a part of the analysis process and
not as a separate process. Thus, the reduction process of the empirical data starts while
conducting the data and not afterwards.
Data display can be pictured as the process to organize and compress the data that has
been captured via unreduced and extended field-notes. The researcher has to read-
through, scan-through, and attaches coding to the extended field-notes.
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39
The author of this thesis applied a form of “lean coding”, which means that at
every stage of the data analysis process only a few themes or categories (five to seven)
were used to cluster the findings (Creswell, 2007; Saldana, 2009). The author identified
three main themes (SRP, BM creation/innovation, Challenges of change processes) and
several sup-groups (dimensions of a successful SRP, components of BM innovation,
etc.). Although, theses theme cluster changed during the data collection process due to
the iterative research design, the identified themes can be pictured as reflecting the con-
ceptual frame of references, which also shifted within the case study.
Conclusion drawing embraces the process in which the researcher should begin
to finalize his thoughts about the meaning of the findings by noting down patterns, ex-
planations, causal flows, and propositions. The results of the author’s conclusion draw-
ing of this research can be found in the chapter “Analysis and discussion”.
Overall, Eisenhardt (1989) describes the process of data analysis as less stand-
ardized, most difficult and unstructured part of qualitative research. She further suggest
two patterns: within-case analysis and cross-case analysis. As this case is based on the
findings of one single organization the author was limited to the within-case analysis.
To identify the key challenges of SRP the author followed an approach of com-
bining theoretical findings (Agarwal & Helfat, 2009; Aggarwal & Mudambi, 2005;
Chan & Soong, 2011; Kotter, 1996; Ryan et al., 2007; Turner, 2003; Waterman et al.,
1980) with practical implications. The chosen approach was identified as mostly suita-
ble to contribute to the established literature. The data that refer to an under-specified
challenge was gathered and clustered in effort to allow the author to suggest newly
identified key challenges as outcome of his analysis (chapter 5).
40
Figure 10: The overall research path (marked in bold) of the study, adapted from Ghannad
(2013)
3.4 Reflections of method choices
Historically, qualitative research was commonly criticised to be imprecise and was
lacking objectivity (Yin, 1989). Regardless the proclaimed development and establish-
ment of qualitative research methods, which are nowadays commonly acknowledged as
providing a more detailed description of the often complex structures around research
objects and the interrelated research context (Lamnek, 1988), the author agrees with
critics that there is still the risk of a too narrow interpretation of the surveyed data
(Eisenhardt, 1989; Yin, 1989).. Especially, in consideration of the limited capacity of
people as information processors (Eisenhardt, 1989).
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41
On the other hand the chosen research design assist to also survey “soft” data of the
interviewees (e.g. behaviour before or while answering a question, the request to revise
their given answer, or the amount and duration of breaks before and during the answer,
etc.) (Eisenhardt, 1989). Since the master thesis tries to analyse the challenges that
might occur and affect the strategic repositioning process the author assumes that espe-
cially “soft” and implicit data can reveal major implications. Especially, as people relat-
ed challenges can be perceived as crucial during change processes in general (e.g. moti-
vation and involvement of people in and inertia against the proposed change processes,
influence and commitment of the CEO) (Agarwal, Echambadi, Franco, & Sarkar, 2004;
Christensen & Overdorf, 2000). With reference to Lamnek (1988) the chosen method
also provides the openness to develop a promoting relationship between research object
and researcher, to use a variety of data collection and evaluation methods, and to adapt
according to the situation (e.g. raise additional question within a semi-structured inter-
view, etc.) (Eisenhardt, 1989).
Since the chosen topic of the master thesis has not been empirically analysed so far,
the author assumes that the case study as qualitative research method can be perceived
as mostly beneficial to analyse the designated topic. On the one hand, a case study will
provide more extensive insights into the research object, which will contribute to serve
the explorative character of the topic and the chosen research question. On the other
hand, a case study is identified as mostly suitable to contribute to the existing theory
around strategic repositioning and BM change process, by also revealing the potential of
collecting the prior mentioned “soft” data.
In general the author struggled to take assumption regarding the scientific quality
criteria (Yin, 1989) of the case study beforehand the actual data collection phase. The
two dimensions of validity and reliability of the case study, could not satisfactory be
examined in the initial stages of the research process. The term validity basically de-
scribes the effective fit between the characteristic desired to examine and the character-
istic examined indeed. The choice and application of viable data sources and instru-
ments of investigation generally represent the reliability of a case study.
42
Furthermore, the author had to clarify that the case study was not conducted in an
effort to provide statistically valid and significantly proven results regarding the rela-
tionship of the determined variables. With reference to Bryman and Bell (2011), the
author further would like to propose that a case study approach in general should not be
perceived as a single source to deduce general applicability. Thus, also the proposed
theoretical model developed in this case study cannot raise the claim to be general ap-
plicable. Notwithstanding, there is the potential to amplify the findings with additional
qualitative and quantitative research to harmonize the concept with the claim for gener-
alization.
43
4 Presentation of results
In this chapter the reader shall be introduced in the information that was gathered
throughout the different stages of the data collection process. The information gathered
was classified according to the conceptual frame and will thus be presented under the
headings that were chosen to describe the theoretical framework. To enhance the read-
ers understanding of Inwido’s current situation some further aspects should be stressed
out, which should provide brief insights in Inwido’s business environment and the on-
going organizational change processes.
4.1 Repositioning in practice: A case study of Inwido
The Inwido Group is a multinational Swedish based window and door manufacturer
corporations and one of the largest manufacturer conglomerates of windows and doors
in Europe (Linden, 2012c). During the last ten years Inwido grew from a company with
barely one billion SEK to a multi-brand (see Appendix A1) and multi-market (see Ap-
pendix A2) conglomerate with a turnover of over five billion SEK and 3200 employees
(Linden, 2012b).
Figure 11: Structured growth through acquisitions ("Inwido Company Presentation," 2012)
Confidential
2012-12-12 3
Figure 1. Inwido growth path through acquisitions.
Figure 2. Inwido’s brand portfolio.
Swedish expansion
- Smaller add-ons
- Focus on brand
names and product
portfolio
- Sales EUR 110m
1996-1999
How it all began
- Merger of
Myresjöfönster and
Elitfönster
- New management
team
- Sales EUR 45m
2000-2004 2010-2012
One Group strategy
- Implementation of
consumer-oriented
strategy
- 100 % ownership
of all acquired
companies
- Greenfield plans for
selected European
markets
2005-2009
Nordic expansion
- Acquiring leading
local brands
- Sourcing synergies
- Entry into selected
European markets
- Sales EUR 500m
44
The growth was basically built on a strategy of successfully acquiring small and
medium-sized enterprises (SME) in same or immediately related industry, while the
focus of this acquisitions was aiming to enhance the economies of scale of the existing
business (Jeppsson, 2012b). Thus, the organizational network of Inwido is based on a
through mergers and acquisition (M&A) grown conglomerate of formerly independent
companies (Linden, 2012). A strategic inflection point caused by the economic crisis of
2008 largely affected Inwido’s historically so far successful dominant logic. As the dur-
ing this time new employed CEO, Hakan Jeppsson, stated in an official company report
that although the economic decline was expected in most parts of the world, Inwido
could not predict how difficult the conditions for the Inwido Group would become
(Jeppsson, 2010). When he in early 2009 realized that, as for the most companies, the
environmental conditions affected by a deep global recession and financial crisis were
radically different (Jeppsson, 2010). Nonetheless, this year also was characterized by
the completion of Inwido’s process of reviewing the strategy for the coming years. This
process resulted in a renewal of Inwido’s vision and mission:
Inwido’s vision of 2006, two years before the strategic inflection point and the conduct-
ed strategic renewal process:
“Letting in the light – the one-stop-shop for closing the building”
("Inwido's Annual Report 2006," 2007)
Inwido’s vision since 2009, outcome of the process of strategic renewal and guideline
for Inwido’s strategic repositioning:
“We will be Europe’s leading supplier of environmentally friendly wood-based win-
dows and doors by focusing our resources, products and services on
people’s needs. By always assuming the consumer perspective we improve people’s
well-being”
(Jeppsson, 2010)
45
According to Inwido’s vision they desired to develop from producing windows
and doors to improving people’s well-being (Jeppsson, 2010). By focusing on offers to
the markets that should reflect the most innovative products and services in several con-
sumer trend-areas (according to:"The Nordic Trend Report," 2012: environment, cost of
living, design, security and comfort) Inwido pursued a strategy to differentiate its posi-
tion in the market by drastically altering its several product-market combinations. To
avoid the price pressure caused by the industry’s highly focus on production and capaci-
ty (e.g. most of the competition lowered their prices to increase volumes Jeppsson
(2010)), which led to decreasing margins, Inwido raised the ambition to become more
user and consumer oriented company.
“… going from a supplier to the building material industry to… a company of
consumer products. And that is for us a long process that will take time….” (A8)
Furthermore, a process of organizational restructuring was established to be create a
more coordinated group that employs economies of scale in purchasing, product devel-
opment, production and finance (Jeppsson, 2010). Also, it was proclaimed to exploit
Inwido’s existing expertise across company boundaries and national borders.
Among other initiatives, a light-matrix structure was established, several additionally
key functions were employed, and personal was exchanged to develop the capabilities
needed to foster the begun strategic change processes ("Inwido Company Presentation,"
2012; Jeppsson, 2010; Linden, 2012; see also Appendix A4-A9)
46
Figure 12: Inwido’s “Light-Matrix” Structure ("Inwido Company Presentation," 2012)
In the following, Inwido established BA Home Improvement & Supply in effort
to diversify its offering in comparison to the competitive environment. The BA Home
Improvement & Supply was a combined SBU that embraced a set of small companies
that sold a range of different interior products for the home to the end-consumer. It also
embraced, several small manufacturing firms that operated as a vertically integrated
supply organization to the Inwido Group but also to external customers. ("Inwido's An-
nual Report 2011," 2012). According to proposed strategic misfits ("Inwido sells Home
Improvement business area," 2012) the Home Improvement part of the combined SBU
was sold in 2012. Although Home Improvement embraced designated end-consumer
companies ("Inwido's Annual Report 2009," 2010; "Inwido's Annual Report 2010,"
2011; "Inwido's Annual Report 2011," 2012), it did not fit with Inwido’s future plans
(see also Appendix A7-A8):
"Inwido's focus is to be the leader in Europe within windows and doors. We
have therefore decided to sell this business area since it is a retail operation
with a totally different business model and therefore offers no economies of
scale with our other operations." (Jeppsson, 2012b)
Dezentralized business responsibilities
HR, Organization
& Sustainability
Finance &
Administration
Sweden Denmark EME Finland Norway
Marketing, Sales
&
Communication
Operations &
Development
CEO
UK
Ireland
Poland
Russia
Consumer
Industry
Group Function
Business Area
Market segments
!
47
“…we thought we can complement their product range and then take their expe-
rience in accessories…but there was never a real connection between windows
and their product range established.” (A8)
“Those products were sold differently then windows and doors…it was a differ-
ent business…I mean if we have had come further with the development with this
company I think we could have seen more synergies.” (A7)
At about the same time the divestment process was conducted, Inwido launched
its corporate core values, which are closely linked to the ambition and mission of In-
wido to become a consumer-driven company that fosters organic growth (Jeppsson,
2012a, 2013; Linden, 2012). Proposed as daily guidance for leaders and employees on
how to think and act and in prospect to continually develop as an organization Inwido
launched the following three corporate values in the end of 2011:
Inwido’s Core Values (Wessner, 2013):
1. Consumer in mind
2
2. Courage to improve
3
3. Competent people
4
Today Inwido’s corporate network embraces twenty brands that are settled in two
superordinated market segments (end-consumer and industrial customer).
2
We want everyone to have the insight and to have an end-user mindset throughout the whole Inwido
organization. (Wessner, 2013).
3
We are prepared to make changes in time, and make these changes to fulfill our company strategy and
goals. (Wessner, 2013).
4
We need honest feedback, and openness as a way of behaving even when giving feedback, rather than
avoiding the difficult subjects (Wessner, 2013).
48
Figure 13: Inwido’s Brand Portfolio ("Inwido Company Presentation," 2012)
Thereby, a set of channels is used to reach the particular target group (Consumer
markets: Direct, Middleman Retail; Industrial markets: Construction and House facto-
ries) ("Inwido Company Presentation," 2012).
Figure 14: Inwido’s business structure – Brands, Segments, Channels, and Offerings
("Inwido Company Presentation," 2012)
Historically the window and door industry is characterized by only incremental
innovations, which are more or less based on product quality improvements, cost reduc-
tions and additional service offerings (Linden, 2012).
Confidential
8
Figure 1. Inwido growth path through acquisitions.
Figure 2. Inwido’s brand portfolio.
Swedish
expansion
Smaller add-ons
Focus on brand
names and
product portfolio
Sales EUR
110m
1996-1999
How it all began
Merger of
Myresjöfönster
and Elitfönster
New
management
team
Sales EUR 45m
2000-2004 2010-2012
One Group
strategy
Implementation
of consumer-
oriented strategy
100 %
ownership of all
acquired
companies
Greenfield plans
2005-2009
Nordic
expansion
Acquiring
leading local
brands
Sourcing
synergies
Entry into
selected
European
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49
As response the subject of Inwido’s renewed strategic orientation stresses the fo-
cus on dynamic innovation and internal growth, which explicitly stresses the importance
to find more radical innovation and once again to shift its focus from a supplier for win-
dows and doors to a company that predominately targets the end consumer market
(Jeppsson, 2013; Linden, 2012; see also Appendix A4-A8). As one of the latest initia-
tives that pinpoint the strategic reorientation Inwido launched a cooperative initiative
(“Inwido Compete and Incubate Innovation Challenge”) together with a business incu-
bator ("Ideon Innovation startar innovationstävling med Inwido," 2012; Jeppsson,
2013).
In general Inwido’s management team seems to have understood the new strate-
gic orientation and the importance of innovation for organic growth the desired results
are lacking (Linden, 2012).
“… I think we're at the stage where we have created an internal understanding
of what it means to be… having…that's one of our core values…the ‘consumer
in mind’…it is…not only our customer in mind, which is often business to busi-
ness.” (A8)
Linden (2012) further propose that Inwido’s problem is not its organization’s innovation
capabilities it is more that no common comprehension, standardized process or frame-
work exists of how to drive innovation internally (Linden, 2012, p. 10).
“It [product development process] takes too much time, the process is too long.
We need to shorten it to be able to take it quicker to market. (A4)
Cross-brand synergy effects are rarely and each BA is more or less working sep-
arately and independent with regards to the development of innovation (Linden, 2012;
see also Appendix A4-A6). As a result the innovation implemented can still be per-
ceived as incremental and occasionally (Linden, 2012; see also Appendix A4-A6). Also,
a valuable customer long-term relationship is still missing (Linden, 2012).
To grow Inwido organically it is crucial to establish an approach to reallocate the
existing innovation capabilities to systematically drive the needed change towards In-
iwido’s proclaimed strategic goals:
50
Figure 15: Inwido’s strategic goals ("Inwido Company Presentation," 2012)
To proactively pursue Inwido’s organic growth further by launching innovation
more constantly and establish a valuable CR to foster the realization of a consumer-
driven company one can claim for new shift in Inwido’s dominant logic .
“We often talk about having different approach but when it comes to the actions
we are still using same terminology. We are still approaching the customers in
the same way….but to be able to get the right people you need to have to under-
stand: Where are we? What are we focusing on? What are the needs that our
customers have? … We definitely have a challenge internally that we need to
solve…a new way of thinking.”(A4)
In effort to drastically changing its collective cognitive orientation to develop the
organizational capability that are required to become a company, which has “the con-
sumer in mind” (Appendix A8), Inwido considerably undergoes a new process of stra-
tegic repositioning.
1. Grow with profitability in Europe
2. Operational excellence through group co-
operation
3. Establish a sales driven consumer company
4. Innovative solutions
5. The best people for the business
!"
51
This new process of SRP embraces several interrelated change initiatives to fos-
ter the set of proclaimed strategic goals. One of these initiatives particularly represents
the research setting of this thesis:
“So, we have to find something else…so, we talk about accessories today and I
think we have an opportunity there because no one else is focusing on that: ac-
cessories….I think it is about increasing the speed of doing things...by build up
an organisation that is very agile and flexible and the time to market is very
short and focused on accessories…” ("Inwido's new venture plan.," 2013)
Inwido’s idea consist basically of spinning out a new venture that enters the
markets to develop a so far underexplored product-market combination and increases
the innovation speed of Inwido by employing new sales channels (Appendix A4-A9),
establishing a valuable customer relationship (Appendix A6-A9), and exploiting the
corporate capabilities and combining them with external capabilities in unemploeyed
manner.
“A Platform where you can probe and learn how social media work… Learn
how to convert site visitors to costumers…” ("Inwido's New Sales Platform,"
2012)
“…design it…to establish a valuable and beneficially sustainable long-term
consumer relationship…to integrate the consumer in a more dynamic
way…educate them.” ("Interview: The new venture - requirments regarding a
SRP," 2013)
“…we should start a new venture…and use external knowledge to come up with
new ideas and new products because our current knowledge is actually a big
barrier for us to innovate...”. ("Inwido's new venture plan.," 2013)
According to the VP R&D of Inwido AB, who can be recognized as initiator and
entrepreneurial champion of the new venture project, the idea basically addresses a
creation new product-market combination that characterizes a SRP (see 2.2). It shall
focus on introducing new products and/or services to the market, which should differ
substantially from the current product portfolio and the competitive offerings, whereby
Inwido also highlighted the difference in requirements regarding the value chain/value
creation process:
52
“So, we have to find something else… build up an organisation that is very agile
and flexible and the time to market is very short and focused on accessories…”
("Inwido's new venture plan.," 2013)
4.2 Key challenges
In this chapter the author tries to present the gathered data that can be related to the
strategic decisions that had taken place at Inwido regarding their pursued strategic re-
newal, which includes an initiative dedicated to SRP (see chapter 4.1) These strategic
decisions should be perceived as either immediately affecting the currently on-going
process of SRP or providing implications about challenges that occurred in the past or
might occur in the future. The interviews and meetings took place during a simultane-
ously conducted business project, which was focused on the conceptualization of the
spinout as a partially or fully owned new venture.
Regardless the fact that the responsible executives consistently support the plan
to spinout a new venture they stressed several main challenges, which should be per-
ceived as based on their own experiences and perceptions. Thereby, the mentioned chal-
lenges are either dedicated to the overall aspect of Inwido’s capabilities to carry the de-
sired strategic changes or directly related to the spinout plan that should implement the
desired changes in terms of SRP.
Especially, the challenge of establishing a valuable customer relationship (CR) is identi-
fied as crucial:
“Retailers would like to protect their consumer information because that is the in-
formation of power, and that is one of our main obstacles. We would like to get
closer to end consumer; first know who it is, than to interact with them more often
so we can sell accessories between windows being exchanged.” (A5)
As proposed (see previous chapter 2.1-2.2.) a SRP that should provide the potential for
long-term success has to reflect the strategic fit to the overall strategy of the firm. Thus,
it should be considered that a SRP also implies to question the design of viable BM that
best serves the pursued goals:
“Since we have been successful we should stick to that but I also think we have
to try and test new ways of doing business…develop a new business model…is
necessary for the future!” (A6)
53
“I mean we have a direct business model…but we have also some channels, es-
pecially the retail channel, which is under strain…and our question is if they are
actually bringing some value here!?...Either we need to develop them [business
models] together with them [retailers] or we need to challenge them [chan-
nels]…(A7)
Thereby, Inwido also highlighted a challenge that has major impacts on the stra-
tegic decision-making and thus on the design of the SBU’s strategy, which was not rec-
ognized in the theoretical framework as potentially affecting the strategic decision-
making process before: the image aspect of cross-brand strategies. Thus, a SRP should
consider the threat that offered products or services potentially might affect the existing
brand images in an unbeneficial way ("Interview: The new venture - requirments re-
garding a SRP," 2013):
“…a…sandbox where you can test new things rapidly without… risk to destroy
the value of any of our existing brands” (A6)
“…an obstacle can be if its start being really connected with our core brands
the window and door business then of course it will be a… it will put a lock on
the ideas that come in because then we have to monitor that it not negatively af-
fect the brand values and it always has to go along with our brand…..”(A8)
“…our brand, names and so on, the model and what can be sold and how we do
it and everything. Just to secure that our brands are not… maybe mixed and
connected too much with new ideas … We have to define a good setup there but
them I'm up for it!”(A8)
Another aspect that stresses out the key challenges of developing a fitting strate-
gy to pursue a SRP is based on the early historical development, which was dominated
by sale of Inwido ‘s Home Improvement BA due to strategic misfits ("Inwido sells
Home Improvement business area," 2012). Thereby, another main challenge was high-
lighted that was rejected in the conceptual framework. While considering the overall
strategy as guiding framework in itself, it has also hindering impacts. Especially for a
SBU, which business is not immediately related to the established CBUs. As it can be
identified by comparing Inwido’s official, vision and designated strategic core values
and a statement of an executive talking about the reasons for the divestment in the
Home Improvement BA:
54
“…we thought we can complement their product range and then take their ex-
perience in accessories…but there was never a real connection between win-
dows and their product range established.” (A8)
“Those products were sold differently then windows and doors…it was a differ-
ent business.” (A7)
With reference to the sale of the Home Improvement BA in 2011, which could
be perceived as designated consumer SBU ("Inwido's Annual Report 2010," 2011), one
can claim that a SRP that is designed to pursue a consumer-driven initiative could face
the major challenge of a short-term misfit with the overall strategy and designated core
value:
“…I mean if we have had come further with the development with this company
I think we could have seen more synergies.” (A7)
“We are proactive and strive to be in the front line of innovation in everything
we do” ("Inwido Company Presentation," 2012)
As acknowledged by the author in the theoretical framework, also Inwido acknowl-
edged the business model as attributed with a broader scope than a solely focus on man-
aging the various revenue stream of their network of different SBUs. It can be assumed
that the BM is acknowledged as practical application of the guiding strategy. Further, it
can be argued that Inwido identified the BM also as reflecting external occurring chal-
lenges:
“I think it is about increasing the speed of doing things... I think speed is the key to
this business model and time to market…”("Interview: The new venture - re-
quirments regarding a SRP," 2013)
“We are too slow on the trigger and we are too slow on the implementation. If we
could find a more direct model that we could faster to the customer with faster re-
sponses…” (A5)
“…let the consumer be aware of what is possible…maybe the price is not that im-
portant of that kind of solution it’s more…look for new ideas…”("Interview: The
new venture - requirments regarding a SRP," 2013)
55
Especially lacking individual competences were identified as crucial challenges that
need to be overcome to pursue the processes to perform the designated strategic renew-
al:
“We haven't got the competence in quite a few areas. We're lacking…I wouldn't say
completely lacking but we have so little of them that they are so broadly spread all
over the company.” (A7)
But also organizational capabilities in terms of the organisations absorptive capacity
5
were identified as elemental challenges:
“We often talk about having different approach but when it comes to the actions
we are still using same terminology. We are still approaching the customers in
the same way….but to be able to get the right people you need to have to under-
stand: Where are we? What are we focusing on? What are the needs that our
customers have? … We definitely have a challenge internally that we need to
solve…a new way of thinking.”(A4)
But also the need for dynamic resources was recognized as challenge when pursuing a
of heuristically designed strategic renewal.
“We talk about resources, currently I don’t see that we don’t have the
resources necessary to be able to start this journey.” (6 A3)
Whereby again the intangible resources, especially knowledge, was emphasized:
We need a better understanding on why we do it and how we should do
it and why it is important.” (A4)
Furthermore, it was stressed that Inwido perceive the challenge to manage organiza-
tional capabilities as largely attached to human resource management (HRM). Also, it
was emphasized that the implementation of vertical processes
6
aiming to educate and
train the desired competences should be pursued to overcome the challenge of lacking
individual and organizational capabilities:
5
Absorptive capacity can be described as „...the ability of a firm to recognize the value of new, external information,
assimilate it, and apply it to commercial ends is critical to its innovative capabilities.“ (Cohen & Levinthal, 1990, p.
128)
6
A vertical process refers to a process that drives the flow of knowledge . (Wiest, 2011 according to: Snider & Nis-
sen, 2003)
56
“…we have gaps in competence…we need either to do educate the ones we have or
we need to take out old competence and exchange that to new competence. (A9)
Finally, Inwido perceive the challenge of capability also as a challenge of allocating
the existing competences and resources:
“…they are so broadly spread all over the company. So you don't really get the gain of
them [people with competence]. Since they are not allowed to focus on the areas where
they really can make a change.” (A7)
The element “people” was identified as revealing several challenges regarding
the pursued strategic change processes, which also embrace several other aspects that
can be perceived as immediately related to the human dimension within organizations
(e.g. lacking motivation of people, need for situative leadership skills, etc.). Manage-
ment and employees were it was identified as both main challenge and central mean to
pursue change:
“You need to get people on board and understand why change is necessary. Be-
cause most people perceive change as threatening…. I think this is the chal-
lenge, which I like. It is fun to see people get glimmer in the eyes when they un-
derstand that change is actually an opportunity.” (A7)
“Internally of course there are several challenges, one of them being the hesi-
tance of people to change… So I'm sure we have to do a lot more in that making
people understand the ‘Whys’ the ‘Whats’ and the ‘Hows’.” (A9)
Also, the challenge of carrying a certain profile of individual capabilities that
would be needed to participate in the strategic change processes was identified:
“And we are doing that…I would say we have done that over the past three years to
change...the top sixty managers within the company, like I think we have exchanged
forty of those...”(A9)
57
A great emphasis was put on issues concerning the leadership capabilities of
persons, who are mainly responsible to motivate people to actively participate in change
processes and to live the proclaimed core values to affect the attitude towards strategic
renewal:
“…I mean we are at least aware of obstacles and also aware of the importance
to motivate people and to get people on board when you're doing changes, so
and then of course it always comes down to each individual leaders and how
well they know their people and how well they manage them…. I mean we tried
to motivate or incentivize the ones that are moving change the most of course.””
(A9)
Although it was stated that rewarding and incentivizing people was not core of
the company’s culture in the past, individual rewards where identified as essentially
contributing to overcome the challenge of motivating people for participating in change
processes:
“I mean all the people that have worked within this company for 25 years are
used to doing things in a certain way. And getting them motivated to do things
differently, I think, is a great barrier.” (A7)
”…I mean there has been sales competition started and other kinds of competi-
tions… since the last three years, we're also rewarding the best Inwido business
area every year and so on…I'm sure there's more we could do on that
part…Definitely, I'm sure that the, we do not live in a culture that is used to
those kind of individual rewards. That is not been the way that you have tradi-
tionally geared the people in the company…” (A9)
Inwido investigates the involvement of the management laso as a hindrance for
the development and motivation of the individual, which is needed to facilitate a SRP.
Especially, if considering the aspect that conducting a SRP that aims to create a new
product-market combination cannot or only slightly draw back on existing knowledge
Thus, decisions cannot be taken on previous experiences and imply a degree of novelty,
which can substantially differ from acknowledged and proven decisions and procedures:
58
“The management is too involved in the daily activities! If the manager are in-
volved in everything suddenly you're very scared of doing something… It becomes very
static… and then you are afraid of taking the decisions…your own decisions.”(A6)
A specifically motivating role can be attributed to the CEO as incubator and
champion of the overall strategic direction of Inwido. As impersonation of the guiding
strategy the CEO has not only implications for the design process of the strategic orien-
tation but also major impact on pursuing the development of the strategic objectives
further (e.g. employing or reallocating the needed capabilities in a particular area, etc.):
“Our CEO Håkan Jepsson of course had a vision of where he wants to go and
what he wants us to be good at…” (A4)
“The change that has been made with the new CEO, there has been huge differ-
ence compare to how it was before. For both good and bad…(A5)
“Yes, I was the first one Håkan [CEO] employed. I think he looked for someone
with my capabilities. (A7)”
Main challenges that might occur regarding the concrete SRP initiative to spin
out a part of Inwido’s business were discussed, which were acknowledging that
knowledge and capabilities have to be looked at from a bilateral perspective:
“I think it will take a vey long time to change the current way of doing things
here at Inwido…our current knowledge is actually a big barrier for us to inno-
vate... So therefore, we have to start something new with new fresh people that
don’t have that barriers.” ("Inwido's new venture plan.," 2013)
“… doing it outside is…. there I think it could be tricky if you doing it with new
people without knowledge about the industry… it could be failure so it's very
important that you leverage the knowledge we already have.” (A6)
Especially, to amplify the implementation of the new core values that should
help to support the realization of the strategic renewal the organizational structure can
be perceived as hindrance:
“...to be able to put…more emphasis on the change and that it was necessary and
59
that it was necessary to get things done quite quickly. There has to be an organi-
zational [structural] change.” (A9)
The challenge of organizational structure is furthermore perceived as an contin-
uously on-going change. Moreover, it was assumed that an organizational structure has
to increasingly adapt to the requirements that the future might reveal:
“I'm not sure that the light-matrix will be able to facilitate the whole journey, so
to say… but I would say within the next three to five years there would have to
be additional organizational changes to really, really get this going.” (A9)
“…to be able to be really effective in that end of our business…I think we need
a more centralized approach to…it's a few years from now but I think we're
heading in that direction …”(A7)
Contrary it was questioned if a centralization of the decision-making process
should really be perceived as contributing to establish a consumer-driven organization
that not only reacts to changes in the environment but also proactively affects those
changes Thus, the structure also largely affects the efficiency of organizational process-
es:
“…looking at the possibility maybe to have a company outside of Inwido or
handling innovation so you won’t get stuck in the bureaucracy within the com-
pany…as I said the organizations becomes more complex because you need to
consider all aspects of the organization. (A4)
Moreover, the structure of the organization was identified as serving as support-
ing framework of cultural change. While the people inside the organization can be per-
ceived as “processors” and “carriers” of the proclaimed organizational vision, strategy,
culture and core values the structure of the organization provides the infrastructure.
60
Thus, the structure was recognized as largely influencing the organizational penetration
of these designated dimensions of strategic planning
7
.
“Well, as you know, we have the strategy to go from a production-driven com-
pany culture to a consumer-driven company culture. Of course it needs to be
driven by different things - among them, the organization.” (A7)
“…the light-matrix then was introduced…to be able to reach our mission and
vision…because historically all those kind of questions have been within the lo-
cal management team and we don't…I mean it will take too long for all those
questions to be taken.” (A7)
Inwido acknowledges culture as general facilitator of change. On the one hand,
it can be perceived as affecting the organizations absorptive capacity and what is com-
monly perceived as taken for granted. On the other hand, it describe the general shared
mind-set and core values:
“I mean we are coming from this production cultural background…different
production facilities that are somewhere in the middle of nowhere where people
are more or less like: they want to stay there, they need a job and our factories
are almost the only choice they have…” (A9)
Equally to the main challenge “structure” the dimension “culture” provides a su-
perordinated area in which the certain characteristic of change can take place. Moreover
the culture is rebuilding itself during the whole strategic renewal process. Consequently,
the outcome of strategic renewal can also result in an evolved culture. The proclaimed
process can be pictured by screening the following statements by an executive, who
accompanied the change process from the earliest hour (A9):
“I would say that the traditional culture was very much, actually, the produc-
tion orientation. I mean we've sold what we could produce…I think that has
been the traditional culture… The culture we're in right now is in between cul-
tures I would say.” (A9)
7
Strategic planning as process of determining an organization’s strategy embraces several key components. Among
others, (P. Kotler et al., 2009) propose the key components: vision, mission, values, strategy, and culture as heuris-
tically integrated component.
61
“…we are changing the culture. The culture from before would not allow this
change but since we are changing the culture. I mean that's part of the whole
strategy process.” (A9)
“…it's not been implemented I would say. But the culture we are driving to is of
course, to have a consumer orientation and happy to become a consumer orien-
tated company...” (A9)
62
5 Analysis and discussion
This chapter is structured as follows: Firstly, in respect of the prosed theoretical
frame of references the author is evaluating if Inwido’s process of strategic change and
strategic renewal can also be classified as embracing the characteristics of SRP. There-
fore, the author decided to relate the development process of Inwido’s early history (see
chapter 4.1) with the proposed interpretation of SRP (see chapter 2.1.-2.3.) as subordi-
nated concept dedicated to the domain of strategic renewal. The latter, as corresponding
part of strategic entrepreneurship (Kuratko et al., 2011), can again be classified as con-
cept belonging to the framing area of strategic change. Secondly, the chapter 5.3 pre-
sents the analysed interview data to compare the identified practical challenges with the
proposed conceptual framework (see chapter 2.3.2.) in effort to test if the model holds.
Thirdly, a revised conceptual model is presented as final outcome of the case study.
5.1 Strategic renewal
Strategic change can be perceived as synonym for radically redesigning the generic
substance of a company’s strategy, which is determined by its scope, resource utiliza-
tions, competitive advantages, and synergy to other fundamental strategic entities stra-
tegic concepts and areas (e.g. strategy, culture, organizational structure, core values)
(Aggarwal & Mudambi, 2005; Ansoff, 1957; H.I. Ansoff, 1965; Dolan & Garcia, 2002;
G. Hamel, 1996; Hofer, 1980; Hofer & Schendel, 1978; Ryan et al., 2007; Spector,
2007). While Ven and Poole (1995) and Rajagopalan and Spreitzer (1997) further claim
that strategic change is defined as the company's effort to align with its over time alter-
ing external environment, Spector (2007) argues that strategic change, though, should
not perceived as a singular concept (Agarwal & Helfat, 2009; Aggarwal & Mudambi,
2005; Hofer & Schendel, 1978; March, 1991; Mintzberg, 1979; Mische, 2001; Nelson
& Winter, 1982; O Reilly & Tushman, 2004; Rajagopalan & Spreitzer, 1997; Sundbo,
1999). Facing the environmental threats of the global economic downturn caused by the
economic crisis of 2008 industries strategic inflection point Inwido pursued a process of
several drastically strategic changes among them a drastically renewal of the strategy, a
process of organizational restructuring (introduction of the light-matrix to develop a
more coordinated group, new key functions), changes in the leadership culture (ex-
change of 2/3 of the TMT and leadership training) and the proposal of core values
("Inwido Company Presentation," 2012; Jeppsson, 2010; Linden, 2012; see also Appen-
dix A4-A9). Inwido thus conducted a process of synergetic strategic change to develop
63
the dynamic capabilities needed to pursue the proclaimed goals (Aggarwal & Mudambi,
2005; H.I. Ansoff, 1965; 1988). The so far successful dominant logic (Bettis & Pra-
halad, 1995) of Inwido, which can be described by a classical product-driven/resource-
driven focus (A6-A9), was additionally affected by price and volume competitions
(Jeppsson, 2010). Furthermore, Inwido was not perceived as providing the organiza-
tional capabilities to sustain the established competitive advantage anymore ("Inwido's
Annual Report 2009," 2010; Jeppsson, 2010; also A5/A7). Consequently, a renewal of
the designated strategy to a modify Inwido’s intention to protect or extend its sustaina-
ble competitive advantage (Spector, 2007). The conducted strategic renewal aimed to
drastically change the focus of Inwido’s vision, mission, and designated strategy
(Jeppsson, 2010; also A4). The newly proclaimed strategic goals were focused on the
establishment of a consumer-driven company ("Inwido Company Presentation," 2012;
"Inwido's Annual Report 2009," 2010; Jeppsson, 2012a; Linden, 2013) to further renew
the dominant logic of Inwido. Also, corporate core values were communicated to
strengthen a common understanding of the new strategic orientation and raise the over-
all commitment to the renewal process (Wessner, 2013; also A9) Since Inwido’s pur-
sued strategic renewal seeks to essentially redefine customer expectations, change rela-
tionship with customers, redefine market dynamics, and/or the firms generic basis for
competition and also modifications in the core business models, one can claim that they
conduct a transformational strategic renewal (G. Hamel, 1996). Strategic renewal can
also serve a more incremental purpose (G. Hamel, 1996); Mische (2001); (Spector,
2007; Wessner, 2013), which basically comprises decisions regarding plans to expand
into new product or service lines or to capture new market segments (G. Hamel, 1996).
One initiative germane to the domain of incremental strategic renewal was the estab-
lishment of Inwido’s BA Home Improvement & Supply, which was designed in effort
to horizontally diversify (Ansoff, 1957) Inwido’s offering in comparison to the competi-
tive environment ("Inwido's Annual Report 2011," 2012; see also A7/A8). According to
strategic misfits (Jeppsson, 2013; see also A7/A8) the Home Improvement part of the
combined SBU was sold in 2012("Inwido sells Home Improvement business area,"
2012). Although, Home Improvement embraced designated end-consumer companies it
did not complement to the Inwido’s proclaimed strategic goal of establishing a consum-
er-driven focus (Jeppsson, 2012b; see also A7-A8). Nonetheless, it was also stressed
that it might also been due to a lack of organizational capabilities to managing the ef-
forts of establishing synergetic effects to Inwido (A7).
64
5.2 Key challenges
The perceived challenges are classified according to the proposed conceptual
framework (see chapter 2.3.2). In acknowledgement of potential deviations the author
altered the preselected challenge groups.
Culture and core strategic values
As stated above Inwido acknowledged the challenge of having a guiding overall
orientation for management and employees that states how they should acknowledge
their daily work and assist to how they basically should think and act. In Inwido’s case
theses core values helped to generally alter the dominant logic in changing the focus
from a production-driven to a consumer-driven company (A7/A9). Thereby, Inwido
perceived the core values as integrated part of the company’s culture, which they de-
scribed as a continuously evolving frame (A9). On the one hand, the culture affects the
strategic thinking of the TMT and the employees (Ryan et al., 2007) as a better internal
communication, the team spirit, and an effective user communication is perceived as
part of the cultural challenge (Chan & Soong, 2011) On the other hand, the culture itself
is affected by the individual cognition of the organizational members and can thus be
perceived as a challenge that is dedicated to the centre of strategic change processes
(A9). In acknowledgement of the perceived superordinated scope of culture and core
values the author decided to cluster both challenges as the reflect more that fundamental
underpinned of a process of SRP by embracing the purposeful, enduring, fundamental
values (Collins and Porras, 1996), which guides the thinking and decision-making pro-
cess. Hence, the challenge of organizational culture within SRP can be perceived as
keeping the symbiose to the proclaimed strategy (A7) and the implemented organiza-
tional structure (A7/A9) as all together determine the firm’s capability to adapt to stra-
tegic change processes(Aggarwal & Mudambi, 2005; H.I. Ansoff, 1965; Ansoff &
McDonnell, 1988) So, one can claim that the divestment of the Home Improvement BA
can also be perceived as misfit in the way the responsible executives thought (Jeppsson,
2012b; see also A7/A8)
Brand reputation and cross-brand effects
Ryan et al. (2007) state that management’s belief in the product or brand is es-
sential to a repositioning strategy as much as the awareness about market and customer.
65
The analysis of the gathered data could neither support nor weaken this proposed chal-
lenge. Nonetheless, Inwido stressed other aspects regarding brands and products that
might employed during a SRP, which can be perceived as essentially mattering: cross-
brand effects. Inwido’s planned initiative to spin out a new venture can be pictured as a
conglomerate diversification (H.I. Ansoff, 1965; Rijamampianina et al., 2003) as it
should employ new channels (online and social networks), new products (innovative
accessories), and integrate the end-consumer more direct and dynamically (Berglund &
Linden, 2012; "Inwido's new venture plan.," 2013). As Inwido did so far not employ
these elements in the established business structure (see figure 14) they cannot draw
back or only minor draw back on existing expertise ("Inwido's new venture plan.,"
2013). Accordingly, Inwido stated that all initiatives that make use of unfamiliar prod-
ucts or brands have to be established externally. Thereby, the author acknowledges the
threat of unprofitable cross-brand effects that might negatively affect the image of es-
tablished brands. This further has also major implications for the direction of the SRP.
Strategic flexibility/learning capabilities
Ryan et al. (2007) claim that the organization’s learning capability is a keystone of an
successful repositioning strategy (Senge, 2000). Inwido also identified competence,
knowledge and individuals innovative capabilities as one of the main challenges of
SRP. As it is also stated (“Competent People”) as on of the corporate core values
(Wessner, 2013). Inwido identified the need for people that reveal the required capabili-
ties to pursue the proclaimed strategic goals. Thus, Inwido not only employs trainings to
develop the required leadership skills of the TMT and middle management (A9), they
also exchanged of executives in key roles were implemented (A7/A9). Accordingly,
they conduct a process of exploration of new capabilities as well as the exploitation of
the current knowledge base to gather the required capabilities implies (March, 1991).
Inwido thereby especially points out the role of the CEO as change driver, incubator and
entrepreneurial champion (Kuratko et al., 2011) of the overall strategic direction, who
should reveal the capabilities to proactively design the strategic orientation but also pur-
suing the achievement of the proclaimed strategic objectives further (e.g. employing
personal or reallocating the needed capabilities in a particular area) (Ryan et al., 2007).
Capitalize on customer awareness and sensitivity
66
The importance of customer awareness and sensitivity was already recognized
by Inwido, which can be picture by the presents of a consumer orientation in the strate-
gic goals (see figure 15), corporate core values (Wessner, 2013), as well as in the domi-
nant mind-set of the TMT (Linden, 2013; see also A8). The challenge for any SRP initi-
ative is to establish a comprehensive awareness of the potential target groups and their
consumption behavior (Awa & Kalu, 2010; Foss & Ishikawa, 2006; P. Kotler et al.,
2007; MacMillan & McGrath, 1997). Resultantly, Inwido’s plan to spin out a company
which main purpose is the establishment a valuable customer relationship ("Inwido's
New Sales Platform," 2012; "Inwido's new venture plan.," 2013) can be identified as
integrative measure to tackle the challenge of customer awareness. Furthermore, one
can claim that this challenge was underestimated during Inwido’s earlier trial to estab-
lish a consumer-driven accessory company (Home Improvement BA).
Management Commitment
In general Inwido’s management team seems to have understood the new strate-
gic orientation and the importance of innovation for organic growth (Linden, 2012; see
also A7-A9). Further supporting arguments to identify management commitment as a
key challenge could not been investigated. Resultantly, the author decided to skip the
proposed key challenge “Management Commitmen” in the revised framework.
Business model
Inwido identified the need for a developing a viable BM that would allow to
transport and communicate the adapted core values to the end-consumer market, since
the established BM are lacking the dynamic component (A6/A7). As their pursued SRP
can be perceived as a conglomerate diversification (H.I. Ansoff, 1965; Rijamampianina
et al., 2003), which is planned to use online channels and social networks, a range of
innovative new accessories products, and an integrated more dynamic interaction with
the end-consumer (Berglund & Linden, 2012; "Inwido's new venture plan.," 2013), In-
wido assumes that a dynamic BM characterized by increasing the speed to the market is
needed (A5). Regardless, their perceived scepticism regarding the further potential of
the future applicability of one of their established BM (“Retailer”, A5/A7) Inwido does
not feel an urgent need to drastically redesign it as long as it is positively contributing to
the revenue ("Interview: The new venture - requirments regarding a SRP," 2013). Con-
sequently, another challenge should be considered, which can be described as managing
67
ambidexterity (Chesbrough, 2010; V. Govindarajan & Trimble, 2005; O Reilly &
Tushman, 2004; W. K. Smith et al., 2010).
Motivation
Management literature stressed the importance of individuals for organizational
change in several manifestations (Agarwal & Helfat, 2009; Bridges & Bridges, 2009;
Christensen & Overdorf, 2000; Kotter, 1996; Tripsas & Gavetti, 2000).. Inwido espe-
cially stressed the challenge of motivating employees to take part in change processes
(A7). Inwido also identified people as hesitant to change, which can be assumed as a
challenge that rather belongs to the domain of “Strategic flexibility/learning capabili-
ties” (Cohen & Levinthal, 1990; Hannan & Freeman, 1984). Consequently, the author
decided to adapt to Inwido perception of the proposed key challenge “People” and label
it “Motivation”, which better describe the characteristics of the assumed key challenge.
Structure
In acknowledgement of Ryan et al. (2007), who are limiting their work by question-
ing the scale of change within their surveyed SRP due to the lack of structural modifica-
tions, Inwido proposed the organizational structure as a main challenge. In considera-
tion of the informal (the emergent pattern of social interactions within organizations)
and the formal (normative social system designed by managers) elements of the organi-
zational structure (Gulati & Puranam, 2009), Inwido altered its pre-existing formal
structure by establishing the “light-matrix” (A7/A9). Also, the informal structure was
adapted, which can be exemplarily pictured by the proclaimed strategic corporate goal
“Operational excellence through group co-operations” (see figure 15). With regard to
the launch of the new venture the organizational structure additionally has influence on
employed sales and communication channels as well as for the interfaces to the corpo-
rate network and strategic alliances (Aggarwal & Mudambi, 2005). With regards to
Turner (2003) and the previously discussed classification of SRP and underlying theo-
retical streams (see chapter 2.2), the author also highlights the challenges that lies in the
misalignment of strategic orientation and the organizational structure.
68
5.3 A revised framework for successful strategic repositioning
The author revised the conceptual framework according to the findings presented
in chapter 5.2. The outcome represents a model that provides a guiding framework for
successful repositioning in a multi-brand business. The perceived key challenges
“Structure” and “Capabilities” as well the combined challenge “Culture and core val-
ues” and the adapted challenge “Motivation” were identified as having a more framing
character that reflects the heuristically interrelation to the fundamental domain of strate-
gic renewal. Nonetheless, the superordinated challenges should be perceived as also
valid for the actual repositioning process as they were identified as preparing challenges
that need to be overcome in an initial stage since they were perceived as revealing a
determining character for the execution of the SRP (establishment of new
SBU/retrenchment of old SBU, major changes in the product-market combination, and
increasing focus towards the establishment/retention of a CBU) (Ansoff, 1957; Palich et
al., 2000; Michael E Porter, 1987; Ramanujam & Varadarajan, 1989; Reichel, 2005)
The inner circle reflects perceived challenges that were directly related to the ac-
tual process of SRP, which are represented by the need for a viable BM, a synergetic
cross-brand strategy, the identification of mechanisms to capitalise on customer in-
sights, and the need for a heuristically consideration of ambidextrous evaluation criteria
and crucial decision-making processes (e.g. resource allocation, leadership aspects,
etc.).
Three integrative challenges were identified that are neither dedicated to the do-
main of the actual SRP nor to the framing process of strategic renewal: the challenge of
brand reputation, the need for an entrepreneurial champion, and the major influence of
the CEO.
69
Figure 16: A Revised Conceptual Framework – Perceived Challenges of Strategic
Repositioning Processes of a Multi-Brand Corporation in the Construction Industry
Successful
repositioning
BM
Culture and
core values
Ambidexterity
Capabilities
Capitalize on
costumer
awareness
and sensitivity
Brand
Motivation Structure
CEO
Champion
Reputation
Superordinated
challenges
70
6 Conclusions and implications
6.1 Conclusion
In effort to contribute to the dearth of literature around the domain of SRP (Ryan et
al., 2007) the author analysed the perceived main challenges of an organization’s pro-
cess of strategic repositioning. The author employed an approach of combining various
conceptual frameworks of SRP (Aggarwal & Mudambi, 2005; Chan & Soong, 2011;
Dittrich et al., 2007; Ryan et al., 2007; Turner, 2003) as well as conceptualization of
frameworks regarding strategic renewal and organizational change (Agarwal & Helfat,
2009; Barker Iii & Duhaime, 1997; Kotter, 1996). This approach was chosen with re-
gard to other case studies concerning SRP, which are either based on cases that are lim-
ited in their scale of change (Ryan et al., 2007), concentrated on organizational restruc-
turing rather than changing product-market combination in effort to grow (Chan &
Soong, 2011), or solely focused on the element of concentration (Michael E Porter,
1987) within the concept of SRP (Turner, 2003), or lacking a concrete definition and
classification of SRP as it is used as interrelated to strategic change (Dittrich et al.,
2007). Consequently, the literature concerning SRP can be perceived as not very exten-
sive. The author provided a conceptual model (see chapter 5.3) that consists of eight
main challenges and three sub-challenges, that should answer proposed research ques-
tion:
What are the perceived key challenges during an organization’s process of strategic
repositioning?
The model can be perceived as reflecting the perceived key challenges of Inwido.
Further, it was assumed that one could differentiate between key challenges that are
more dedicated to the superordinated domains of strategic renewal and strategic change
and those that can be directly related to the process of SRP. The perceived superordinat-
ed challenges embracing the following four dimensions:
Structure, Culture and core values, Dynamic capabilities, Motivation
Especially, the challenge of dynamic capabilities was perceived as crucial. One
specific finding was the challenge that Inwido identified in the need for the entrepre-
neurial champion (Kuratko et al., 2011), who drives the change and takes the responsi-
bility to make decisions that could conflict with the established way of how things were
done before.
71
Also, the CEO as incubator and champion of the overall strategic direction, who
is perceived as impersonation of the guiding strategy the CEO has not only implications
for the design process of the strategic orientation but also major influence on pursuing
the achievement of the proclaimed strategic objectives further (e.g. employing personal
or reallocating the needed capabilities in a particular area). Accordingly, this again
stresses the close interrelation to the key challenge represented by the element “motiva-
tion”, which can be perceived as majorly a challenge regarding individual inertia and
the need to motivate to people in general to participate in strategic change processes.
Perceived key challenges that can be directly related to the more concrete initiative of
SRP (establishing a SBU that creates a new combination of product and market) the
author identified the following four main challenges:
Business model dynamics, Ambidexterity, Capitalize on costumer awareness
and sensitivity, Brand reputation and cross-brand effects
The author once again would like to highlight that the case study subject Inwido reflects
the specific features of a multi-brand corporation. Thus, the perceived key challenges
especially regarding the brand reputation and cross-brand effects can be acknowledged
as very specific to the particular case.
6.2 Implications for research
In this chapter the author would like to stress out his implications to future research.
In acknowledgement of Ryan et al. (2007) the author of this thesis would also like to
limitate his findings especially in terms of time scope of this research, As a strategic
repositioning can be perceived as process with long-term prospect the author suggests
that further research on topics around key challenges of SRP should at least include the
realization process of the addressed issue. The author also assumes that future research
could contribute to draw a “web of relationship” between the terms strategic reposition-
ing (SRP) and the firm’s Business Model (BM), a term, which increasingly “…have
surged into the management vocabulary.”(Shafer et al., 2005, p. 199). That a SRP can
also reveal the need to change the established business models should be reasoned by
reflecting that a BM can be described as “…management’s hypotheses about what cus-
tomers want, how they want it, and how the enterprise can organize to best meet those
needs, get paid for doing so, and make a profit” (David J. Teece, 2010). David J. Teece
(2010), further highlights a view that describes the BM as anticipation of changes in the
environment.
72
Thereby, the author proposes that on can claim that key challenges of SRP can be
perceived as overlapping to business model change. Especially, if the conducted SRP,
like in the here proposed case of Inwido, embraces the plan to establish a new venture
that reveals the need for a complete new BM (according to:Cavalcante et al., 2011:
Business model creation ). Furthermore, an extensive analyses regarding the relation-
ship of SRP and organizational ambidexterity in mature businesses (Tushman and
O’Reilly 2004, O’Reilly and Tushman 2008), could reveal contributing finding to the
overall topic of SRP. As in the case of Inwido, SRP often takes place at the SBU level
of multi-business corporations, which face the challenge of simultaneously build future
new businesses to foster growth ambitions while also operating in the established
CBUs. Finally, with regard to this case study as well as to the other scholarly literature
concerning the domain of SRP, the author recommends that quantitative research or at
least a multi-case study could contribute to provide more substantiated findings.
6.3 Practical implications
The author assumes that the provided framework and findings can contribute to fos-
ter common understanding of the current situation within Inwido. With regard to the
proposed key challenges the framework can contribute to increase the acceptance and
commitment to change processes in general by providing the management a base to
refer to when facing the situation of a planned SRP. The proposed conceptualization of
SRP can also add to the anticipative capability of executive and employees in terms of
fostering an intensive understanding of issues and processes dedicated to SRP. This will
also contribute to enhance the proactiveness in terms of developing a valuable strategy
for SRP, which considers potential necessary activities (e.g. resource allocation) on the
base of guiding framework rather that reacting to the occurring issues. Viewed from a
broadened base, the author wants to emphasize that this thesis can only serve as a rudi-
mentary baseline case for thoughts on how manufacturing companies may meet the
challenges of a increasingly dynamic environment. The analyzed case is can be charac-
terized as quite specific in nature as the pursued SRP of Inwido is at least novel to the
particular industry. Other companies, especially in unrelated industries might likely
have other experiences, alternative methodologies and insights that again would enable
other parties to learn and benefit from.
73
Although the company clearly identified the challenges of strategic and organiza-
tional change processes the challenges dedicated to the particular area of SRP can be
perceived as quite novel to them. Especially, since Inwido is entering unknown territory
with the discussed initiative of spinning out an social and online commerce-based inno-
vation platform. By referring to the proposed framework a more structured process for
future SRP could be conducted.
7 Appendix
Appendix A1: Inwido’s company profile .............................................................................. 75
Appendix A2: Inwido’s market overview ............................................................................. 80
Appendix A3: A dynamic RBV - Various views regarding dynamic capabilities ................ 80
Appendix A4:Interview transcript: Business Controller Inwido AB .................................... 81
Appendix A5: Interview transcript: Group and Business Controller Inwido AB ............... 89
Appendix A6: Interview transcript – Vice President of VP R&D Inwido AB ...................... 97
Appendix A7: Interview transcript – Vice President of Marketing and Sales at Inwido .. 101
Appendix A8: Interview transcript – Acting Senior Vice President, Group Operations ....... 113
Appendix A9: Second interview transcript – Vice President of Marketing and Sales at Inwido
................................................................................................................ 125
Appendix A1: Inwido’s company profile
The leading window and door
group in northern Europe
!
# No. 1 or 2 position in all
Nordic markets
# Sales in 2011: MSEK 5 050
# Employees: 3 500
# Production plants: 31
# Head office: Malmö, Sweden
# Largest holding of Ratos
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Windows Doors
Sliding doors Installation
Other
Structured growth through
acquisitions
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/%08
#903%+ 2:; In respect of PD, leverage the existing knowledge
Interviewee: (laughing) …. (long break)…. in respect of product development a lot is on-
going here… but as I said before its about work in a more structured way to leverage the ex-
isting knowledge and make sure that you are not reinventing the wheel in each business ar-
ea…build on each other knowledge is…
Interviewer: Would you say that the strategic orientation from a "supplier to the building
industry" to a consumer brand has implications to the organizational structure? You have
changed the structure because of the strategic reorientation?
Interviewee: …hem… (long break) to become a consumer company I think we need to pro-
vide real value to the end-consumer and I mean in the long-term its about deliver a product
and… have the right features and quality and so on and in this case we have to all rapidly de-
velop new products…because the external change so to say is… a lot of things are happening
very fast and to fit into that we also have to react fast.
Interviewer: But the organization as such has not changed so far?
Interviewee: So far…not, No! I mean of course we can push it in the right direction but may-
be we need other things to become a real consumer company.
Interviewer: What is your opinion of this organizational change processes?
Interviewee: …. a very general question… a lot of things happening…the bigger the organi-
zation is the more difficult it is to change things…. maybe not going…changing something
for just changing something…tha's good but… (long break) … you can except change but
then you have to think about every person has his own interest in the organization… I think
this is the tricky part.
Note: Reveals mixed feelings regarding change
Interviewer: Could you please describe why Inwido sold its Home Improvement business
area?
Interviewee: I can't really speculate… I was not employed then.
Interviewer: Could you please describe the current dominant business model(s) at Inwido?
Dominant in terms of KPI/Durability/Tradition/Management Backing
Interviewee: A lot of questions… (laughing)… (laughing)… I mean looking at the past we
have been quite successful. So in that perspective we have the right business models… I think
our shareholder are very happy… but of course…the question is "Are they good enough for
the future"… (laughing)…I don't think that they are good…they are too slow… as you would
say "bureaucratic". The management is too involved in the daily activities! If the manager are
involved in everything suddenly you're very scared of doing something….you do something
by your own and you get punished so to say (laughing) that you have taken your own initia-
tives. It becomes very static… and then you are afraid of taking the decisions…your own de-
cisions.
¬ Note: Shareholder are happy!!!
Interviewer: Would you say Inwido is more focused on its shareholders or its consumers?
Interviewee: …we are here because of the shareholder…its always to deliver to the share-
holder but in order to do this you have to deliver value to the consumers. I don't know which
one comes first (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which is
offered through this/these specific BM?
Interviewee: … (long break) …. the value proposition… we are going to supply… the… (long
break) … the best windows but looking at our…from a quality perspective I think all our
products have very good quality. I can't say that we have a very differentiated value proposi-
tion compared to our competitors.
Interviewer: Do you personally see a necessity for a change in the current BM or the creation
of a new BM?
Interviewee: Since we have been successful we should stick to that but I also think we have to
try and test new ways of doing business…develop a new business model…is necessary for the
future!
Note: Implies ambidexterity
Interviewer: Could imagine any main barriers regarding the implementation of a new BM or
the change of the current BM?
Interviewee: Of course, there are a lot of barriers of doing that….and…due to different rea-
sons…but therefore I think we have to do it (observer's note: new venture) outside of the
business. We can't… (incomprehensible)…when this change happens in the existing business
we have to go outside…
Interviewer: Could you then imagine any main barriers for doing it outside
Interviewee: JA… doing it outside is…. there I think it could be tricky if you doing it with
new people without knowledge about the industry… it could be failure so it's very important
that you leverage the knowledge we already have.
Interviewer: You’re planning to spin-off a new venture to increase the innovation speed.
Could you please briefly describe your intentions regarding this approach?
Interviewee: I think it is about increasing the speed of doing things, having a…sandbox where
you can test new things rapidly without… risk to destroy the value of any of our existing
brands
Appendix A7: Interview transcript – Vice President of Marketing and Sales at Inwido
Interviewer: Kaya Vatansever/Tim-Ole Mundt
Interviewee: Vice President of Marketing and Sales at Inwido
Interview Setting: Interview conducted in the meeting room of Inwido. The interview was
conducted from 10:10 AM to 11:10 AM on Monday morning.
Affiliation with interviewee: None. Introduced to her three month ago but we have never
spoken an additional word
Interviewer: What is your formal position?
Interviewee: I am senior vice president for Marketing, Sales & Communication
Interviewer: Could you briefly describe your work duties?
Interviewee: I am in charge of internal and external communication. I am also responsible for
our brands and the brand strategy. And I have a key account responsibility for our internation-
al retail chains.
Interviewer: How much of your work time is immediately or mediately dedicated to product
development activities?
Interviewee: Perhaps 10%, if you also mean conceptualization
Interviewer: What is your background and education and how long have you been working
for Inwido?
Interviewee: 3 ! years
Interviewer: Why?
Interviewee: Because I was interested in the challenge that this job at Inwido will bring.
Interviewer: What is your role in group meetings when deciding about new products?
Interviewee: I’m part of the group “Product Council”. And also, as you may know, we were
part of this “Compete & Incubate Initiative” together with Ideon. Out of those I’m heading to
projects.
Interviewer: So you are running two projects right now?
Interviewee: Yes, and apart from that I’m working with and I’m overall responsible for a
marketing and sales group that is running a product development project at the moment. I am
not a big part of it, though.
Interviewer: So is the product developed and ready to launch or in prototype stage?
Interviewee: So far, it is a prototype but it supposed to be launched next year
Interviewer: And this prototype was resulting out of the collaboration with Ideon?
Interviewee: No, sorry, that is a separate one. The one I’m talking about is not related to the
Ideon project. Only internal and not connected to any external initiatives like “Compete &
Incubate”.
Interviewer: Okay, let me revise my question. I was interested in NPD resulting out of the
collaboration with Ideon or similar initiatives.
Interviewee: Okay. There are two projects, which I’ve taken care of. One of them is more of a
software development project. Aiming to illustrate to people the benefits of different win-
dows, doors, and accessorie-solutions at their homes. Which has not come so far, yet. The
other one is more like you can dress your window – the frames. It’s about accessories - simi-
lar like an IPhone case. You can print it and add it to your window frames.
Interviewer: Did you launch it?
Interviewee: No, but we are most likely going to launch it. We are in the process to create this
venture together with the guy that came up with the idea.
Interviewer: Interesting! Did you, in any stage of the development process, involve custom-
ers?
Interviewee: Yes, we have done that. But not in the way I would have like to. Actually, it was
more in the other project - the one that is conducted by the marketing group. We used, for
example, focus groups. The “sticker” project is a really low budget project. We are conduct-
ing it with a minimum of internal funding. But we’re planning to integrate the customers a bit
before we launch.
Interviewer: Does Inwido make practice of bringing in external knowledge and technology?
Additionally, to the Ideon project?
Interviewee: No, not on a regular basis.
Interviewer: When a new product idea is generated or concept is invented, do you need to be
convinced in terms of if the project will be followed-up.
Interviewee: Depends on the investments requirements. But to be able to launch sth, we (I and
my friends from marketing and sales) need to be on board.
Interviewer: We know that you collaborate with your suppliers in terms of NPD before.
Have you ever used other external parties like customers before?
Interviewee: Yes, on the industry side we did it a lot. I mean industrial customers (IC) and
suppliers were often part of NPD, so far. But to my knowledge, I’ve been here since 3 !
years, not other parties.
Interviewer: Did the IC approach you to come up with NPD or how did a NPD process nor-
mally proceed? Collaboration?
Interviewee: Normally, the IC put up certain demands and we tried to reach them. There is a
part of collaboration because we can’t do everything on our own. That is mostly how.
Interviewer: And in terms of collaborating with universities? Is this the first time?
Interviewee: I think so, yes! Not to my knowledge. But…wait I shouldn’t say… in Denmark
there is a company we have acquired it is called Pro Tec …. They have used external
knowledge a lot: universities, designers, architects, etc.
Interviewer: Have you ever developed products by using marketing instruments to analyse
the competitive environment (e.g. benchmarking)
Interviewee: No, so far the NPD is factory-driven. Not at all from the market side. I should
explain: I don’t have a department. It’s me. All the activities are locally driven from the busi-
ness areas (BA). What I’m trying to say, you can find things in Denmark that would never
work in Sweden for example. You have rules only applying to Sweden and such only apply-
ing to Denmark. Not saying that the driver for NPD couldn’t be the same; it’s just the markets
as such!
Interviewer: What would be your role in launching a new venture? Would you have direct
influence on marketing decisions? E.g. Hemmafönster
Interviewee: No, not necessarily! In the case of Hemmafönster was not a real new brand
launch. It was formerly known under VC. Its was just a brand relaunch. I was deciding about
name, positioning, the graphic decisions. But not in putting done the actions.
Interviewer: Could you describe how a process of launching a new venture would look like?
Who decides? How is the decision-making process look like.
Interviewee: It always depends in which BA or to be more specific if it’s in a market where
we have already an organization than the specific organisation would lead the launching pro-
cess. It also depends on the volume, who of the TMT needs to be involved.
If it’s a complete new venture in a new market like we have at the moment with Aus-
tria…there I’m part of which brand(s) to use, what positioning, about the price, where to be
localized, which city, where would it be good to us to enter the market. When it comes to
products… I’m part of that…but it’s not my core what products to use in that market.
Interviewer: Oh, okay! So are you going to use/transfer products from the BA Sweden?
Interviewee: No. The main sourcing will be from Poland and most possibly from Denmark.
Interviewer: Okay. Now we are curious to know as which very fundamental strategic orien-
tation would you label your ambition to enter the Austrian market. Is it just a focus on
growth? Or more like a strategic repositioning?
Interviewee: Of course, it is a growth ambition! We spotted a few markets in Europe, which
reveal the potential to generate substantial market share. Fundament for that is of course “it’s
a wood-based market”. That’s we are not entering the German market, because it’s a plastic
dominated market. So we see Austria, we see Switzerland, we see northern Italy, and a few
other markets that are interesting to us. Then we do all the market research…of course. Then
we look at all the competitors and…you know the drill. Since we’ve quite an extensive brand
portfolio. We don’t want to put a new brand into the market. This time we also have the re-
quirement that whatever brand we use to enter Austria is a brand that we will be able to reuse
when enter other European market.
Interviewer: So, you would not describe entering the Austrian market as strategic reposition-
ing, right?
Interviewee: No! Its part of our growth ambition to be a leading European company! Since
most our markets are decreasing we need markets that are a bit more stable.
Interviewer: And the Austrian market growing instead?
Interviewee: Well, let’s say it is not decreasing. And also Austrian is the home market of the
second or third largest player in Europe. It’s a market that not has been challenged so far I
would say to very large extent. And its also a market in which windows are regarded…it has a
better position I would say – you can charge much more for a window than in other markets.
Which also requires that your are much sharper in your positioning and in your offering. You
can also see that in the communication done in that market…its quite much sharper.
Interviewer: Do you have any idea why it is like that?
Interviewee: I think that Internorm has done a very good job to take it (note: windows &
doors) from building material to something that is important to your home…more important
part of peoples’ life.
Interviewer: How important are intangible resources e.g. knowledge, intellectual property or
customer relations to Inwido, your division, and your individual workplace?
Interviewee: Its very very…its getting more and more important I would say. Since we have a
history on being very dependent on our sales channels and have had not, historically, a very
tight relationship with the consumer, who is actually buying the windows. To be able to reach
our vision and mission we need much much much closer to our consumers and therefore we
need those kind of properties you’re talking about. Its important that we manage it (note:
knowledge) and that we own it (note: knowledge). We’re not there yet, though! We not work
on it quite a lot. It differs…I mean different markets. For example in Finland it’s a totally dif-
ferent setup because they’re selling directly and they have all data, for example when it comes
to customer data. While in Sweden we’ve almost nothing! But it’s very important! And it’s
growing in importance. Probably the most important looking ten years ahead.
Interviewer: Could you please describe how crucial information is shared at Inwido?
Observers supplement: Is laughing out loud. Obviously also a bit concerned about the
way crucial information is shared.
Interviewee: Email!?! I'm afraid that's…I think email and meetings that is how crucial
information is shared to a very large extent. I would like to say through intranet or other
documents or sharing places…but this is not the case.
Interviewer: Do you have regularly meetings?
Interviewee: We have lots of different meeting - on different levels. We've meeting on the
group management team every month. I as I sad have a marketing and sales management
team - people that have a strategic position in sales or marketing. We also meet every
month. This office (note: embrace the centralized functions of Inwido in top-management
team and middle management) has quarterly meetings. And then my own department has
meetings every three to four weeks to update what has happened…we have quite a few
meetings. Apart from that we have quite a few project-related meetings: we have the
Product Council four times a year. We also have Business Review Meetings, where the
central staff, means myself (VP Marketing & Sales), CFO, CEO, VP Operations, VP HR,
we go out to the different BA where we have a full-day meeting with the BA-TMT. We go
through all the business issues on corporate level as well as on local level. We do that
three times a year. We do this to focus on the most important parts of our business. It's a
pretty important forum. Then we have the TOP-60 Meeting every year where the the TMT
of every BA meets for a full-day.
Then I also have the same with all the sales & marketing staff once a year for 24 hours.
Interviewer: Could you please describe the currently on-going change process at Inwido?
Interviewee: Connected to our organization or connected to our strategy? Is that what you
saying?
Interviewer: Both. More about the strategy but also how do you perceive it internally and
what is happening inside the organization and structure.
Interviewee: Well, as you know, we have the strategy to go from a production-driven
company culture to a consumer-driven company culture. Of course it needs to be driven
by different things - among them, the organization. One part of this is of course the light-
matrix that we have put in place… I mean our business is driven from the different local
business areas. That is were the different P&L responsibility lies. It's in our business areas.
So, under that is sales and marketing and operations…the factories are in the countries.
There are driven by the local business areas but at the same time we are of course more
and more trying to use the synergies we have of course being in groups. A lot of our com-
petitors are very local while we as a larger company can use the synergies and also the
knowledge from different countries to be able to offer more and better solutions to our
customers. Anyhow, the light-matrix then was introduced…I think…a year and a half
ago…as part of that my group…I call it my group…with marketing, sales and communi-
cation with representatives from the different business areas…we focus on marketing and
sales to drive those questions more quickly in our company…to be able to reach our mis-
sion and vision…because historically all those kind of questions have been within the lo-
cal management team and we don't…I mean it will take too long for all those questions to
be taken. At the same time, there is a group within Operations that are doing the same kind
of work when it comes to trying to workout product platforms, finding synergies in the
production part of our business. So…and in that work we are focusing on common pro-
cesses, benchmarks, and best-practices that we can use for different parts of the organiza-
tion. I think that is the main organizational…I mean we are probably heading towards a
more centralized organization especially within Operations I would say…because we are
now heading for Austria…we're taking production capacity from different countries to use
in a new market and it will be more and more like that to be able to be really effective in
that end of our business…I think we need a more centralized approach to…it's a few years
from now but I think we're heading in that direction…and when that happens the business
areas will be marketing and sales organizations to a very large extent…and I don't now if
I'm supposed to say anything about what I think about things???
Interviewer: Yeah, of course
Interviewee: I think that will be necessary and I think that will be the only way where we
will actually could become a marketing and sales-driven company…. because as of today
we're not at all (laughing) we have very few marketing resources…it's less than ten people
within the group of more than 3000 people that work with marketing…and those are not
strategic at all…they are more the hands-on-marketing people…and then when it comes to
sales we have historically not been handling that as a strategic tool. Moreover, it's been
very much basic selling and not value-based selling at all. We have "this is the competitor -
we have a better price!" (laughing)…Yeah its needed, especially when we're going to in-
corporate new technology and new things into our products we need a totally different ap-
proach both when we're introducing our products into new markets but also when of
course selling them. We not much more…we can't not sell everything through campaigns
and everything is included in all time (note: meaning the window and door as part of an
integrated and heuristic system that need to be implemented with prospect to further com-
patibility and long-term focus)…now we need to be much smarter when going to market.
Interviewer: What is your opinion of this organizational change processes?
Interviewee: NOTE: see included in answer above
Interviewer: Do you feel affected by this change process in any kind?
Interviewee: Oh yes, I'm part of it - that's way I chose to work here! I wanted to be part of
these change. To use the tools that I learned working in other industries.
Interviewer: So, I assume they (note: Inwido board) looked for someone like you with a
intensive focus on the end-consumer?
Interviewee: Yes, I was the first one Hakan (note: CEO) employed. I think he looked for
someone with my capabilities.
Interviewer: What means change to you?
Interviewee: New opportunities…challenging the old. Taking lessons-learned and making
it better. I am curious person, so to me change is mostly positive but I know that change is
also hard work…very hard work. You need to get people on board and understand why
change is necessary. Because most people perceive change as threatening…they know
what they have but they don't know what they are going to get and that is fully under-
standable. I think this is the challenge, which I like. It is fun to see people get glimmer in
the eyes when they understand that change is actually an opportunity.
Interviewer: How do you do that?
Interviewee: (laughing) By involving them. Making them part of it. Making them also part
of finding a solution.
Interviewer: Could you please describe why Inwido sold its Home Improvement business
area?
Interviewee: (laughing) Yes, I can. I was not part of our core business. The synergies were
not there.
Interviewer: Again, why?
Interviewee: Those products were sold differently then windows and doors. You (note:
consumer) don't take the decision at the same time and so you need to be with the con-
sumer at different times…it was a different business…I mean if we have had come further
with the development with this company I think we could have seen more synergies…but
I mean (laughing)…but have another ten years…so at this point…no…I think it was a
wise decision. Even if I wasn't part of it (laughing)
Interviewer: Actually we are now wondering…was it completely unsuccessful or was it
just not matching your strategic idea during this stage of the change process?
Interviewee: I think it depends on what you mean by unsuccessful?
Interviewer: Bottom-line performance
Interviewee: That was not bad but there was not the synergy that they (note: decision-
maker at Inwido during that time) expected to be there. We were not able to take care of
the home business areas in a way that would have deserved I would say...
Interviewer: So, did you have a team that was in the lead to establish the desired and
needed synergies you are speaking about? Or did you just expect that there will be syner-
gies, which turned out to be wrong?
Interviewee: I think…No, there was not a team…I mean there was a team that managed
the acquisition but no, we didn't handled it from the consumer-drive perspective what, I
think, we could have done. There was some initiatives…I mean the manager of that busi-
ness areas was part of the group management team and so on…and they were involved in
quite a few initiatives that we did but…no, not a team that focused on managing synergies.
Interviewer: Could you please describe the current business model at In-
wido/Elitefönster?
Interviewee: (laughing) we have several different business models… (laughing)
Interviewer: (laughing) we can also skip this question?!?
Interviewee: Yes, thank you (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which
is offered through the current BM? Perhaps at both your cash-cow brand Elitefönster and
Inwido?
Interviewee: The value proposition for Elitefönster?!? I mean that… we call them a Mar-
ket generalists, the Volvo of windows in Sweden…if that gives an indication? Its safe, its
quality, it has the solution that you need more or less and a history of doing that for 90
years. But there is a value proposition for each and everyone. They (note: brands) deliver
all the time on it but...
Interviewer: Do you personally perceive that the consumer also think about Elitefönster
offering a value proposition labeled "market generalist"?
Interviewee: Actually, I know since we are doing brand audits. So I know that they
think…that they perceive Elitefönster as what I just said. I would have wished they had
some more labelings on Elitefönster because that would it make a more personal brand
but…Elitefönster has a good…it is the strongest window brand in Sweden…that is a fact.
Well known for quality and being the strongest window brand in Sweden.
Observers supplement: She is talking more about consumer's perception of
Elitefönsters'image than the value proposition here.
Interviewer: Now Inwido?
Interviewee: Great windows and doors…so (laughing) that's all what I would like to say.
Interviewer: Do you personally see a necessity for a change in the current business mod-
els or the creation of a new business model? If so, where?
Interviewee: Since we have several business models I think some of them are well suited
for that while others need to be either revitalized or challenged to be able to carry us to-
wards our vision or mission. I mean we have a direct business model in quite a few of our
countries and that of course is a carrier to where we heading…but we have also some
channels, especially the retail channel, which is under strain (laughing) and our question is
if they are actually bringing some value here!? I think that is something that we need to
figure out. Either we need to develop them (note: business models) together with them
(note: retailers) or we need to challenge them (note: business models)…question if we
should continue on it.
Interviewer: If you have to point out some part of the process from the production to the
end consumer, where do you see the potential to change - more on the consumer-side like
channels and the consumer relationship or also in terms of key partners, resources or activ-
ities?
Interviewee: (laughing) I see opportunities everywhere (laughing) I think we have…that is
why I chose this company to work for (laughing) …its a very traditional business. Not
only Inwido more the whole business as such. Lots have done in other industries what
have not been done in this industry yet. And then of course challenging the existing in the
old tradition always creates some turbulence and you loose some here but win on the oth-
er…So, I think, the biggest where we could gain the most is in the customer and end con-
sumer part. That's what I think. We have a very large part to do also on the backend of the
processes and in the production but I think we would in best focus on the consumer part.
But that is always the hard part because it's not like investing in machines. In an industry
like this, with all its traditions behind it, its very very hard to get acceptance for those kind
of investments. Also connected to product development and those parts. It takes time!
Interviewer: You were talking about main barriers in a BM change process? Could please
describe them a bit more intensive?
Interviewee: Ourselves (laughing) ja ja ja (laughing) I mean all the people that have
worked within this company for 25 years are used to doing things in a certain way. And
getting them motivated to do things differently, I think, is a great barrier. I think actually
the surroundings are more often changed in comparison to internal aspects. And one more
thing that I would like to emphasize is competence. We haven't got the competence in
quite a few areas. We're lacking…I wouldn't say completely lacking but we have so little
of them that they are so broadly spread all over the company. So you don't really get the
gain of them (note: people with competence). Since they are not allowed to focus on the
areas where they really can make a change.
Interviewer: Inwido is planning to spin-off a new venture to increase the innovation
speed. Are you aware of that? What do you think about it?
Interviewee: Yes, I know about it but not that I would say…I must admit that I have been
not so nice to him on this issue… (laughing) No, we have so many projects and I'm in-
volved in so many… I don't like to be only a little bit involved. Unless he is not really in
need of me I will be not involved…so its more me (laughing)
Interviewer: How does window/door of tomorrow look like? From each perspective, you
in your role as a customer as well as you as part of Inwido.
Interviewee: As a part of Inwido - I don't know.
My vision of the window is that it will actually become a much more and important inte-
grated part of every people's home. It's something were you…I wouldn't say sophisticat-
ed…but to me the window is something that you should be able…that should be able to
reflect you mood. So that it actually gives you the environment your actually want to be in
- if you want light it will bring you light, if you want to be shaded it gives you shade. If
you want the kitchen to have the menu when you're going to cook there, it will be there. If
you would like to watch TV on it, you can watch TV on it. And you would be able to con-
trol…control your windows of course from the distance and so on…but it will bring you
the comfort you would like! That's how! When it comes to the door - I think that the door
is doing its job to much larger extent today than the window. Because I think the door is
something that you personalize much more than a window today. Then of course it should
bring you secure. It should be easier to manage automatically…but I think that is…its not
that interesting I would say! I think y window has much more opportunities than a door,
because I think more and more of our homes will be glass and windows. For Inwido - I
definitely hope that we will be part of this new era of windows! I hope that we will be first
out! I'm not so sure, though. Maybe in the industry they (note: competition) will recognize
us as being first. I'm not so sure that we will be…that we will take the investments to
make the consumers regard us as being first.
Observers supplement: Seems that they are all believing in their shared vision of bring-
ing “smartified” solutions to people's homes.
Interviewer: If you had the power and means what would you change at Inwido?
Interviewee: … I would definitely invest much more in the marketing and sales part much
more. I would take away a lot of the initiative that we're doing today. Prioritize much
much much more of what we are doing. Putting large investment in the marketing side to
get up the awareness (note: consumer awareness) around windows. I would definitely in-
vest…jaaa…because people need to be aware of the windows - to look at them not
through them! I think this is very important! To be able to sell values around windows
people need to be aware of them. That is something I would do! And then I would invest a
lot more in product development - that's what I would do…because we need to develop.
This (note: the current market technology) is mechanic. Its boring! Today it's a hassle it
needs to be much much more… and perhaps not so serious!!! It needs to be more fun
(laughing) fancy and fun! (laughing) But this industry is taking itself so serious…and peo-
ple get bored of seriousness! They want the safety connected and security connected to
seriousness but...
Observers supplement: Interestingly large break before she answered.
Interviewer: Nice! Thank you very much! Yeah, thank you very much!
Interviewee: Thank you! I hope it will help to whatever work you have to do (laughing) Good
luck! I look forward to getting whatever it is you working on (laughing)!
Appendix A8: Interview transcript – Acting Senior Vice President, Group Operations
Interviewer: Kaya Vatansever/Tim-Ole Mundt
Interviewee: Acting Senior Vice President, Group Operations
Interview Setting: Interview conducted in the meeting room of Inwido. The interview was
conducted from 16:10 PM to 17:15 PM on Tuesday afternoon.
Affiliation with interviewee: Designated co-mentor at Inwido. Introduced to him three
month ago. So far we had two meetings together.
Interviewer: What is your formal position?
Interviewee: Senior Vice President Operations
Interviewer: What are your work duties?
Interviewee: It is to….coordinate our operation its our production, its our R&D, its our facili-
ties, its our procurement for the group…basically that is to hold-together, to maximize our
potential with our plans, to consolidate our platforms…and insure the to lower the cost of our
purchases. So, its a broad role but its in parts its quite holding two positions because also
Head of Procurement…and we work in Matrix… we are decentralized but coordinated from
here.
Interviewer: How much of your work time is dedicated to product development? Mediately
or immediately?
Interviewee: I mean product development is operationally positioned under Operations and its
like that in most business areas that the Operations Manager is also managing the R&D de-
partments and centrally we have as you know Gabriel (note: new VP of R&D) new and he
reports to me. So in that sense I have a direct link to R&D by discussing the issues he reports
to me. And then there are all the connections to our strategic suppliers, which is the base for a
lot of our R&D and a lot of our ideas, which we have brought forward to the market place…as
campaigns and so on are from the suppliers…its a new kind of glass, a new handle….so not
so much research but absolutely development of our existing products.
Interviewer: So historically you have developed your products also in collaboration with your
supplier?
Interviewee: Yeah, I would say so we've that….and pressure from laws that regulating ener-
gies demands and…the presentation of new ideas from our suppliers and also some customer
demands forced us to develop in certain… I wouldn't say…as you know…our organizations
itself is not generating massive amount of new products but we're…I think we're good at read-
ing our suppliers and also trying to adapt to market demands, which made us, especially in
Sweden quite successful and being first in energy solutions and so on. The three-glass-window
for example…jap.
Interviewer: What is your background and education and how long have you been working
for Inwido?
Interviewee: BSc. Development Engineer/MSc. Industrial Organisation & Finance
Interviewer: Does Inwido make practice of bringing in external know-how and/or technolo-
gy?
Interviewee: I think we do. I think Abell Security quite recently is a good example by acquir-
ing a technology company or part of it and bringing it in…helping us launch new smart home
products…its one example of it…but historically it is what I mentioned before: using our
suppliers and pushing them to say what is next? What do you have in the pipeline? Do you
have product like this or that? And bringing in technology and know-how from them.
Interviewer: When in the process are external know-how and/or technology mostly used?
Ideation phase, creation phase, development?
Interviewee: I would say historically it has been in the very beginning… we have stolen ideas
from them or products from them. I would say we gotten innovation and brought them to the
market through our products via our channels…that's historical. But then of course we have
development projects…we've with the customer right now…looking at new types of windows
together with Skanska and Abell, which I mentioned before. In this case they are part of the
process from beginning to end. I think it has been the last two to three years were we built
something…ja I think you can take that. I mean its…we've pushed suppliers in the past also
and develop things together like "Finger Joint Wooden-Components" and that was basically
not done before. But in 2002 we started together with NAME OF FIRMA NOT UNDER-
STANDABLE where we started with "Finger Joint Wooden-Components"…so I say we were
first with that. You see lots of and defects that are cut-out with…Yeah but I guess I would say
two or three years we were working more close with longer projects.
Observers supplement: Historically
Interviewer: How did the strategic change affect the product development process?
Interviewee: I would say we never had a product development process. We worked ad-hoc
with project we've found. Not through clear processes or tunnel or gate-ways..no systemiza-
tion. I mean we of course check with the marketing force? and then we get further with their
"god-feelings"…basically you could say that whatever we do their is a process but we hadn't
have a defined process on a paper that we follow and … to this day we actually don't have a
common even though Gabriel has launched one and has one…on paper… (laughing) its still
not a common model that anybody is running after…that will take some time for us.
To get everybody understand what that gate process mean…what does gate one or gate two
mean…we have it on a paper but not everybody knows what it mean. I think a year and half
ago the process was born…it was a rocket on the intranet… but no-one used it.
Interviewer: So before you never used open innovation in the ideation process of new prod-
ucts, right?
Interviewee: No, I think open innovation was first…we started that together with Ideon last
year. It was definitely new to us. But this does not mean that we had a process in the back-
ground and still don't have one. Open innovation we did because we really believed that that
would be a fantastic way to get new influences and young competences into the company…
but of course it helped to see what could be accomplished with that (note: open innovation) …
it was a very successful process! But do we have a lot of new products out in the market be-
cause of that - No, not yet. But it doesn't matter because it gave us a lot - the process itself.
Interviewer: What is OI to you? How contributes open innovation to Inwido the most?
Interviewee: Open innovation definition for me…well, I would say for us and the way we
looked at it and sharing our problems or challenges with…with a broad public or with the
public…saying "help us with this", what can we come up with together and we are willing to
share the result from that with you…and by that getting much more - to answer the second
question - to getting much more than we would receive when we would sit in a close office
together and all our R&D guys looking at each other. So, I think we achieved a lot by doing
that and we can get so much more out of that - yes, we opened up for competitors to look in.
Absolutely! To someone to maybe steal our business idea and what not….but I think we're in
a position that we're quite stable and traditional industry. That we can do this without being
afraid of someone stealing and launching. I think if we were Apple, Nokia or a fast-moving
electronic company or Samsung…I think it would be a harder process for them…that's my
feeling… I think it fits business like us maybe a little more…because we can be quite open.
It's not something (note: talking about products) that you can copy and steal within a day and
launch tomorrow. So, that's maybe something….and in regards to open innovation that might
fit to our business. Ja, open and not afraid to share our problems, thoughts and ideas together
with a… like we did!
Observers supplement: Is much more talking about threats that change and opening up the
corporation could bring.
Interviewer: What are Inwido’s/Elitefönster’s crucial sources to gather/gain/acquire re-
sources? Could be knowledge, people, assets, tangible, or intangible.
Interviewee: I think so far suppliers is key for us. That's where we gather most! I would like
to say customers but that is not the case. I think we will have to tell them what they need be-
cause they don't know what they need! If you ask "Do you want to control your window with
your phone?" than they most probably would respond: "No, why should I want to do that?"…I
guess that there is no need yet. So we have to create that need! I would say from suppliers! I
would say whatever brands are doing -in other markets. Looking at what technology and
"smart" is doing in different business and different business models and trying to steal from
that…its not an answer to the resource question but…. the only way to get new resource we
have to go out and steal them - ideas that we want, people we found out there…this is what
we can use! So, let's buy-in his company and see… I think its very rare in our business. It is
one way… I would say its hard…its always a challenge to acquire or gather the right re-
sources… I would say.
Interviewer: Do you also make use of internal sources when it comes to unexploited
knowledge inside the company ? Ideas, etc.
Interviewee: Yeah, on the group-level. The R&D is meeting every month. We have a meeting
for only high level …every Head of the different functions…and sometime we mix them up -
that is quite cross-divisional. But only…I mean below top 60 management I would say. We
have idea boxes…and also open innovation with Ideon we also invited a lot of internal people
to take part in order to learn also from the process and learn also from the process… but inno-
vation itself we can be much better in collaborations with universities and so on…we act at a
very low level…I mean it's you're, when I look at you two, you a rare…it's not what we have
done a lot…historically. But locally its more common - take Elitefönster. They have one or
two from technology educations coming in every year doing…lets say a new type of window
or so on…getting some influences. But on a very low level!
Interviewer: Could you please define the resources, which are essential for Inwido’s suc-
cess? From your perspective.
Interviewee: Well, we can't lose our core competence of production of wooden-windows-
that is core! If we don't have this, we don't have Inwido! That means we need that core com-
petence locally to produce a simple thing as a window! I would like to say it is within innova-
tion but it is not… if we're talking about something essential for Inwido I would have to go
back to our core business, which is producing wooden-windows!
That's what we build it on and that's what we have to go back to…I think (laughing)… but to
grow, to be prosperous, to take the next step, to evolve as a business, we need so much to be
on the edge of things and showing the market that we want to take the market leader position
by bringing innovations to market and actually becoming a product…yes, that is core for us.
Even though we're not market leaders than we can still take that position by bringing products
and using our group as strength there. So, if we are or have a lot of power in on business areas
we can be innovative used that strength to launch that in our neighbor area, where we have
very little resources.
Observer’s supplement: Is focusing on the production-based view/resource-based view
when talking about Inwido.
Interviewer: Did they change in the last years? Regarding innovation and the organization-
al/strategic change processes
Interviewee: Yes
Interviewer: Do you have an idea why that happened? Adapted: Why now, I mean what
was the starting point?
Interviewee: …I think it was a combination of things.. I think of course a new management
that has come in. So, I think that has affected absolutely… Hakan (note: current CEO) instead
of our previous manager. I think that has one effect. I think we're also in a place of our busi-
ness where we are…have…like in Finland or Sweden where we have almost 50% market
share. If we wanna grow we gonna have to bring more products to the market! We won't be
able to acquire more window and door producers - we gonna have to bring more accessories
to the market…new products…increase the value. And I think this is also key here. This is a
third thing: increasing the value of the products we are selling because we are in a building
material industry…a price-pressed product, which has…if you don't differentiate you will use
your margin in the end because it is definitely a price-market…I think that might be the key
driver actually…the last one there…So I think that's…you have to upgrade your product and
bring more value to the end-user. Otherwise we will just be a commodity… I mean that might
be the key driver!
Interviewer: Could you please describe how crucial information is shared at Inwido? Is there
a formal process or is it quite informal like door to door conversations?
Interviewee: …intranet…email… I would say email…if its crucial information we make sure
that everybody get it by email… I would say that is the main way…but intranet…it will be
launched on the intranet if its official of course and then by email… I mean it depends what
information…you can have crucial information from the CEO to the management group -
then it is his voice (laughing) So…but if it's to the group in one…then it would have to be
email. But then it's up to every managers position to share information for his department. So,
I mean if Hakan says something to us and the senior management then it's everybody… I
mean business area managers task to bring that home to their organization and so on… So…
I mean if you want to reduce the time (note: time to spread information) by 50%, then you
shouldn't use email. Then you have to do it directly…to do that! Crucial can be… (laugh-
ing)...
Interviewer: Could you please describe the decisions-making process regarding the need for
and the allocation of resources?
Interviewee:…I mean…we have no resources to allocate here…we have a bring to the market
process…we have gates now…we have decided what should be decided in the gates…what do
you need to represent each gate…but like I said, that process is very young. So, I would say
we are… the processes are young, we started to work with it, yes…we are at lot of different
levels in different business areas. Denmark have a go-to-market process that is well described
and very defined… if you like to , I can send it to you...and Gabriel has of course look
through…but then we have also some centralized models, which also have the gates and a bit
simpler just to get everybody on board to use a go-to-market process and product development
process to get a structurized, to get a cross-functional teams in place from the begin-
ning…supporting the process…it's been very much R&D, procurement and production and
then you present something to the market… the managers and say "Can you sell this?"
Observers supplement: The term resource allocation needs more detailed introduction and
demarcation before raising a question about it.
Interviewer: What means change to you? In any kind.
Interviewee:…. Change is hard. I think it is the hardest thing we do. I think it is very easy to
start change but going full-circle is hard. So, change to me is when you have…putting out an
idea out there.
When you gotten an alignment with people, you gotten everybody…at least most part on
board. You start pulling on the machine, you get the last people on board and they see they
have to follow or they see it is a good thing. And then you bring a full-circle…until
you…until you gotten all you can out of that change and then it will evolve into a new
change…cause then you will…the process will go full-circle and then you will come up with
the next circle and change again. And evolve. So, I think change is bringing from the start
side…an idea from start to finish and getting the alignment and the follow from all the re-
sources…and stakeholders.
I know…change is hard like I said… the one that really manage change are fantastic people
and their are not that many and I'm one of those…you…the last part is very hard…and when
you look at history books its not that many…that are very good at it. So, if you can master
that you're in a good position (laughing)
Interviewer: Could you please describe the currently on-going change process or processes
at Inwido?
Interviewee: First, we are going through many! Change processes! I guess I take one..and…I
take one…and then I choose…"Going from a supplier to the building material industry to… a
company of consumer products. And that is for us a long process that will take time….and… I
think we're at the stage where we have created an internal understanding of what it means to
be… having…that's one of our core values (note: ?) "Consumer in mind"…it is…not only our
customer in mind, which is often business to business. Which it was historically! So we had
our wholesalers or building material industry in our…in our minds all the time - what do they
want?! But also having our the end-use, the consumer in mind. And getting them to go in and
ask for our products. So, when they talk to the carpenter then they don't leave it up to him to
decide what windows he chooses and what brand…they actually tell them "I want Elitefön-
ster" or whatever brand we have in our portfolio. I think this is a process on-going and that
started maybe two years ago and it will…it will continue on until we are regarded…from the
end…we have a definition of when we say it is fulfilled and when the change is actually in
place…if you like to , I can send it to you.
Interviewer: Do you feel affected by this change process in any kind?
Interviewee: Well…Since it's not a drastic process, not a drastic change for us, it is not a
burning platform…even though maybe it should be but it hasn't been presented that way… it's
been slow process of understanding of that we have a consumer product in our portfolio. Its
actually used every day by our consumers. But doors…we haven't appreciate the value of
that…you can't see who made it. Our brand could be visible for twenty or thirty years..ad we
haven't used it…crazy!!! (laughing) Crazy! Very important and crazy that we haven't used it.
Observers supplement: He is not answering to the question. Should I asked again!?
Interviewer: But do you feel affected by this change process in any kind?
Interviewee: NO! And no-one work-divisino…what is happening is that…our marketing fo-
cus… I would say our marketing is today more focused on the end-consumer…so, yes, we
have probably one or two more people in marketing than we had before…so… more focus on
that side. But I don't think that it has changed the way of working for people.
I mean we have business concepts that have gotten more validated by this. So, our direct
channels…we're now saying that this is the key for the future to having that direct channels
and talk to the end-consumer to getting the direct feedback. So, in that sense the company had
changed…we make sure…we appreciate those business models. We didn't have them before
but now we are more focused and appreciate it.
Interviewer: So, in general you can say more open-minded?
Interviewee: Yeah, I would say
Interviewer: Adapted: Could you please describe why Inwido sold its Home Improvement
business area?
Interviewee: Ja…It was bought to be base for accessory sales… it was never integrated as a
part of the window sales. Their range of products was not a perfect fit. We knew that going in
but we…we thought we can complement their product range and then take their experience in
accessories, which is what they sell actually… a lot of different small products… but there
was never a real connection between windows and their product range established. Therefore,
we decided it's not core business and we let go. I think it was not driving our core business
sales. The accessories we want to sell should be connected to our windows and doors some-
how and we didn't think that their products…we did and we never put the effort in to make
them a part of it. It was always a separate business.
Interviewer: Could you please share your opinion about why the Home Improvement busi-
ness areas was not successful?
Interviewee: Ja, we never used their…that organization that they had for working with acces-
sories and implemented in our windows and door business. And the knowledge that they had
was kept for themselves! It was never integrated in the window and door business. The win-
dow and door business was too stable… I would say too old-fashioned in their ways to…
management problem I would say…we could…we never consolidated in together…we took
help from each other and we (incomprehensible) prices from time to time but it was on a very
limited scale. So…it wasn't really a…they already had the same customers. So, we were al-
ready on the same customer base, retailers. They had their business model and… one plus one
did not really make two. In that sense it was more strategically right to keep them separate.
Maybe to help on specific projects but that didn't happen…
Interviewee: How far are we? I just have to...
Interviewer: We are going to speed it up from now on.
Interviewer: What happened to the formerly tied resources (assets, people, knowledge, etc.)
Interviewee: Nothing (laughing)
Interviewer: Could you share your personal view regarding the value proposition, which is
offered through the current BM? For Elitefönster as well as for Inwido or in general.
Interviewee: …ja, we actually have a new mission…or value proposition…we put in there as
well… in general it is bringing well-being to people…and that has been since… a couple of
years now. I think this is a good way of seeing…a good way of describing what we want to
do. But there's also a safety-level, easy-to-use, and being recognized as part of the home…but
again only as a building material.
Observers supplement: Is talking about mission, vision and image rather than value proposi-
tion
Interviewer: Do you think your customers/consumers think the same?
Interviewee: No, we don't have any!
Interviewer: ...
Interviewee: I mean… I'm probably a little off but do people choose Elitefönster because they
feel its safe? Its trustworthy? Its reliable? Its dependable? And its the biggest brand?…ja, they
connect that with the brand. And that is well-being of course. Feeling safe and having all that.
So, for some of our brands…ja, a lot of well-being fits. But have they… in that sense, yes,
well-being affects our customers absolutely… but do they regard it as bringing well-being to
them…I'm not sure… (laughing) it's tricky (laughing) yeah, I guess we are market leaders and
we got strong brands… we…we have… it's a certain comfort-level to choose our brands… I
would say…its Volvo that you buy…. I would say. In other brands its also service-level and
price...
Interviewer: What do you think about the simple terms "brand-awareness" and "getting-the-
job-done". Meaning, a Elitefönster is offering one essential purpose, its just serving with hav-
ing a window in my house.
Interviewee: …ja…jaa..I guess…its fulfilling its purpose…yeah, absolutely!
Its a safe choice and a reliable one and one that is often recommended to them… I would
say… by retailers, carpenters… they trust the quality, easy-to-install, has all the value of a
window that the carpenter likes and therefore they recommend it…ja… I would say you don't
change your windows because its fun (laughing) you have to do it (laughing)
Observers supplement: In general a lot of guessing out in the blue. Do retailers and carpen-
ters really recommend - they don't know.
Interviewer: Inwido is planning to spin-off a new venture to increase the innovation speed.
Are you aware of that? What do you think about it?
Interviewee: …depends on what you mean…because… we are… I mean there are a lots of
ideas of having new ventures… so you don't know about them… I mean of those projects… I
know you guys with Gabriel have talked about different new setups and models… but It’s
great… I like it…its perfect! Bring it on. I'm very open to it! Then we have to decide fur-
ther… how we use our brand, names and so on, the model and what can be sold and how we
do it and everything. Just to secure that our brands are not… maybe mixed and connected too
much with new ideas that just want to test and then maybe discard… but still you have to test
them. We have to define a good setup there but them I'm up for it! Yes, very good.
Interviewer: I just wanted to figure out how and when information regarding innovation pro-
jects are shared and approached
Interviewee: … I mean…we… it is a… Gabriel and I discuss and when we come up with
something maybe together with Jonna…and then we build it and then we present it. We don't
share all the time and we don't have a good coffee room (laughing) in a good way… I mean
we should if we want to be a very innovative company but we have more small clusters and if
we have something we bring it up… I would say we work like that.
Interviewer: Could you imagine any main barriers and obstacles affecting a process of spin-
ning of a new venture - from your point of view.
Interviewee: … not… I mean if we are talking about the open innovation as a new venture as
putting out a place… a market place to test new ideas… as long as you can do that… yeah, an
obstacle can be if its start being really connected with our core brands the window and door
business then of course it will be a… it will put a lock on the ideas that come in because then
we have to monitor that it not negatively affect the brand values and it always has to go along
with our brand. So, if it can be under our roof as spin-off and letting entrepreneurs test ideas
and having a platform for that without a direct connection to Elitefönster or Hemmafönster or
other brands and maybe just to Inwido…Yeah, I think that could be an obstacle.
If the ideas that come up are so connected to a certain brand then they might not get tested
because they are wacky… (laughing) … and not really core for that brand and that we will
have the brand police in person of Jonna in running first over there and saying "You can't test
that while being so closely tight to Elitefönster if its so way of what they are stand for!" of
course it should be linked to windows and doors5 somehow but connect them to a brand can
be a little difficult. So, that's a challenge. Because sometimes you need that to get the pull, to
get the sales, to get it really tested, And on the other hand if it's too wacky you might not want
to connect it to one of our brands until it's tested…So, that's an obstacle.
Interviewer: How does window/door of tomorrow look like? From each perspective, you in
your role as a potential customer/consumer as well as you as part of Inwido.
Interviewee: …I won't go into design… I should be able to chose the style and design that I
want that fits my house. They (note: windows/doors) should be dynamic and having accesso-
ries that makes them dynamic. They let in energy when they should. They keep energy in
when they should.
And they keep energy out when they should - they should be dynamic. I should be able to
monitor them… remotely… I should be open my door…who is staying outside, which means
I need a camera in my door…should be already implemented in the door. So, we get the sale
(laughing)…and needs to be a plug’n’play system…so its not…if you buy its today it's very
complicated…you have to be smart and love it. You should buy this, get a control box and
you just match your windows and doors to the box and you're off! It will help me to control
my indoor-climate by being dynamic. I will also have the opportunity to open and close my
system for foreigner, for example carpenters or whoever is delivering something… I can open
the door from them and close it behind them when they leave. That's technology, not design
like I said.
Interviewer: So, that's it! We're done! Thank you very much for your time! Thank you! We
appreciate that a lot!
Interviewee: Thank you! And of course if you have more, please let me know!
Appendix A9: Second interview transcript – Vice President of Marketing and Sales at
Inwido
Interviewer: What major challenges is Inwido facing during the on-going processes of strate-
gic repositioning and how do you manage to handle this?
Interviewee: What major challenges are we facing, um..
Interviewer: Yes.
Interviewee: I mean, are you, are you talking about the external and internal challenges or...
Interviewer: Yeah, both!
Interviewee: Both? Well, I'll start with the external ones?..., of course it's .. that we are just
doing this to see this turn around when the market is down, when we have some market re-
quests, which makes it more difficult because it has to be very cost effective to see this turn
around.
Interviewer: Okay..
Interviewee: We can not lose to fail because of it.
Interviewer: Okay.
Interviewee: 'Cause we need to do it um.. under, under, I would say: some kind of “market
strain“.
Interviewer: Mhmh.
Interviewee: And... I think that is made upon of the external projections..... since what we are
trying to do is actually something that, I think, both customers and consumers... I mean would
gladly see us do, so I don't see that there would be a big opposition from that point. In some
cases perhaps the channels as such could feel threatened for gross moving, closest to the con-
sumers but if we, if we are doing that in a professional way, I would say, it would rather be an
advantage for us, actually.
Interviewer: Okay
Interviewee: But if it's not handled correctly, that might also be a challenge
Interviewer: Okay
Interviewee: Internally of course there are several challenges, one of them being the hesitance
of people to change, I mean not people feel threatened by change and this is of course a big
change... but again: Communication and making people understand how they can contribute, I
think it's the best way to bridge that and that is something we are putting effort into. I think
we have done that but I think communication can never be overdone in situations of change.
So I'm sure we have to do a lot more in that making people understand the “Whys” the
“Whats” and the “Hows”.
Interviewer: Okay, yeah
Interviewee: So it's very, very important. And then taking we of course also competences is a
big challenge, since I mean driving the business in a different way, puts, I mean, kind of a ???
where we have gaps in competence and again, the market being as it is, we have restrained us
on recruiting people, which means that we need either to do educate the ones we have or we
need to take out old competence and exchange that to new competence.
Interviewer: Okay
Interviewee: And we are doing that, I would say, we have done that over the past three years
to ... ??? logic sense out of the top sixty as we call it: the top sixty managers within the com-
pany, like I think we have exchanged forty of those...
Interviewer: Oh
Interviewee:...during our three years
Interviewer: Okay, okay! That's quite a lot.
Interviewee: Yeah, there has been a big competence restructuring to be able to facilitate the
change. I would say that those are , and then there is also organizational changes of course to
carry the... or to facilitate the change, being the ones we talked about last time with the differ-
ent meetings we participate the marketing and sales management team, the operation man-
agement team that is cross-bordered and... also the of course, I mean, recruiting ??? and also
putting more focus on the R&D and in all our markets and doing the initiative with … is also
a facilitator or at least something that could focus on what we want to do in the future, rather
than what we have done in the past.
Interviewer: Okay, nice. ... thank you. ... do you have a commonly acknowledged overall
aim, which is describing whether the desired strategic change processes, and the repositioning
is successfully completed? Or not?
(...)
Interviewee: We have actually a checklist. We have put down four checkpoints of when we
can call ourselves a consumer driven company.
Interviewer: Okay, nice.
Interviewee: Internally we can call ourselves a costumer company when we drive our business
from the costumers needs and external the costumers are evidences satisfy with our product
services and performance…and when the financial market label us as a consumer company.
So those are the four checkpoints.
Interviewer: Okay, nice. Thank you. Next: the capabilities, I mean you also talked about
competences inside the company and the organization as structure as you said. Would you
stress additional organizational capabilities that are needed to conduct the strategic reposition-
ing process? Or do you think you've already mentioned all of them?
Interviewee: Well, I think what we need is of course, I'm not sure if we need more strategic
thinkers. I think we need more practical doers, who are actually doing the change now. I think
that's the stage we are at. I think we have thought the big thoughts. And now it's down to ac-
tually getting that out in the whole order making sure that everybody understands and every-
body understands their own role in this and why it's important and why we think this is good
for the future.
Interviewer: Okay
Interviewee: I think there are some business areas we have so much further and in others we
have quite some way to go, still.
Interviewer: Okay, nice. Okay. The last time you also talked a bit about the organizational
structure and that you changed to the light-matrix structure. So would you say that the change
from your old structure to the light-matrix structure was caused by the ambition to change the
company, the strategy and the positioning in the market?
Interviewee: Yes!
Interviewer: Okay, is there any deeper explanation, I mean...
Interviewee: I mean, it could not be done quickly enough in the old structure..
Interviewer: okay
Interviewee: ...So I mean, to be able to put... more emphasis on the change and that it was
necessary and that it was necessary to get things done quite quickly. There has to be an organ-
izational change. I might even add :I'm not sure that the light-matrix will be able to facilitate
the whole journey, so to say.
Interviewer: Yes
Interviewee: I think perhaps we might... I mean.. in how long time. But I would say within the
next three to five years there would have to be additional organizational changes to really,
really get this going.
Interviewer: Okay, nice. The next point is rewards and motivation. How does Inwido or you
personally as a manager motivate your staff or the organizational members to take part in
change processes or projects in general? So, do you have a guideline how to motivate or do
you do it on individual like perceptions or do you have rewards?
Interviewee: No, we don't have any guidelines but I mean all the TOP 60 managers should
have had for the past two years leadership-training. Where we get trained in how get to moti-
vate our employees. And that was also during the last year that middle management in most of
our business areas that have also gone through leadership training
Interviewer: Okay
Interviewee: Great emphasis has been put on to I mean, change management so, and commu-
nication, so I think we have, I mean we are at least aware of obstacles and also aware of the
importance to motivate people and to get people on board when you're doing changes, so and
then of course it always comes down to each individual leaders and how well they know their
people and how well they manage them.
Interviewer: Okay, thank you. Adapting on this, do you have any like monetary rewards or
like bonus programs?
Interviewee: Yes, we do.
Interviewer: Yeah? Okay.
Interviewee: I mean especially within sales we do but there are so many different bonus
themes. I won't be able to give you one favorite....it's the most common
Interviewer: Okay.
Interviewee: I mean we work through five different channels and within those five different
channels we work in separate ways in different markets, so... I mean it puts things.. The most
general I can. I mean we tried to motivate or incentivize the ones that are moving change the
most of course.
Interviewer: Okay, nice. Um
Interviewee: But I mean, I'm sure there's more we could do on that part.
Interviewer: Okay
Interviewee: Definitely, I'm sure that the, we do not live in a culture that is used to those kind
of individual rewards. That is not been the way that you have traditionally geared the people
in the company. And the explanation of that is of course the.. I mean we are coming from this
production cultural background and all the different production facilities that are somewhere
in the middle of nowhere where people are more or less like: they want to stay there, they
need a job and our factories are almost the only choice they have. So, I mean that means that
you haven't had to incentivize people .. You know in any other way
Interviewer: Yeah, sure.
Interviewee: ???…. I mean, That's also trying to change the culture but then I mean you get
failed people and those are not situated always at the factories but actually in other cities then
of course those ways of motivating people coming to the full???... way
Interviewer: Mh okay, nice. So I assume that rewarding and incentivizing became more
common during the last years?
Interviewee: Yes! Yeah, I mean there has been sales competition started and other kinds of
competitions, I mean, nowadays since the last three years, we're also rewarding the best
indegen business area every year and so on. So there has been, yes!
Interviewer: Okay, nice. So let's talk about processes as such are. Have any changes been
made to lateral or vertical processes? When I'm talking about lateral processes I mean some
for example new development processes and when I'm talking about vertical processes it's
more about what you mentioned: trainings or budgeting process, R&D restructuring and so
on. Do you know what I mean?
Interviewee: Yeah, I know what you mean, I would say that, I mean we, during those 3 or 4
years, I mean we've established quite a few processes that wasn't here before. R&D process
was not here, there was no cross boarder-sales process, uhmm, there was no more common
structure for example within my area, the marketing and sales accounting, follow-up on
brands. That's quite a few.
Interviewer: Yeah, It's okay if you answer briefly. So it's fine. And, I mean actually I'm al-
ready aware of it but: You also tried to or already did in some business areas change the prod-
uct development process, right?
Interviewee: Yeah! I mean, there has actually been, I would say most of our business areas.
There [in most business areas] have been no structured processes before! So that is something
that has been established over the last three years and then of course something that is terrible
while others think it's great, so.
Interviewer: Sure. Okay, thank you. Actually it's the last question and again it's quite subjec-
tive: Do you think that Inwido's existing culture allows you to drive those kind of drastic
changes and this repositioning from a supplier in the building industry to the consumer mar-
ket?
Interviewee: In our culture?
Interviewer: Yeah, culture.
Interviewee
...) I mean we are changing the culture. The culture from before would not allowthis change but since we are changing the culture. I mean that's part of the whole strategy pro-
cess.
Interviewer: Definitely! Could you describe in three to five words what is the current cul-
ture?
Interviewee: I would say that the traditional culture was very much, actually... the production
orientation. I mean we've sold what we could produce. I would say that was it very much. It
was. We looked into our factories and thought: What can we do and what are we good at and
then we produced that and then we tried to find someone to sell it to. And if we found a good
customer we did everything to keep that customer. I think that has been the traditional culture.
Everything came out of the production, very technical production orientation??? The culture
we're in right now is in between cultures I would say.
Interviewer: Yeah, definitely!
Interviewee: Since it's not been implemented I would say. But the culture we are driving to is
of course, to have a consumer orientation and happy become a consumer orientated company
with the parts that I have told you about. I mean the pillars of that is of course also the corpo-
rate value so with the consumer in mind…. to improve the competent people at hand. Those
are the three corporate values and I think they are the pillars upon which we try to make this
pretty big change.
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