Strategic Innovation Guide case study.

Strategic Innovation Guide case study: global leading battery manufacturer

24 January 2024

The article at a glance

This case study features a well known battery manufacturer, who for the purpose of the case study we’ll call ‘BAT’. This is the story of how, with the help of the innovation basket in the Strategic Innovation Guide from Cambridge Judge Business School, they were able to identify new strategic opportunities and make changes in their innovation portfolios to achieve ambitious growth targets.

The Strategic Innovation Guide is applicable for large corporates as well as small and medium sized companies, for profit or not for profit. This is because the Guide examines and improves 2 fundamental aspects of any organisation: where the innovation needs come from and how to match those needs with the right projects.

Using the Strategic Innovation Guide, organisations first identify their innovation needs or change needs based on their strategic goals, they then cultivate a basket of innovation projects to meet those needs.

Ambitious plan

BAT is a well-known brand of lead-acid battery products in China and has achieved great success over the past three decades, ranking as the top lead-acid battery exporter. With the emergence of the renewable energy market and the electric vehicle market, the management team identified great potential for business growth, and formulated an ambitious plan to build a new BAT, growing at 30% per annum over next three years. 

Strategy analysis

In order to achieve this ambitious strategic goal, the management team carried out a strategic analysis within the 3W1H framework to identify where their strategic strengths and strategic weaknesses lay. In order to win further orders from existing car manufacturers, they need to offer new products with new features and customised products that suit the needs of some particular customers. For existing car dealers, they continue to offer cost-competitive products and better services, such as fast delivery and after-sales battery monitoring services. In addition to existing customers, the development of new customers will play a key role in the business growth, where the company offer both cost-competitive standard products and new products with unique features and performance. They recognise the four strategic advantages they have built up over the last 30 years, such as low cost, good quality, a wide range of products and good service. 

What is the market offering?

  • Existing lead-acid standard products
  • Customised solutions for car OEMs
  • Additional services (like delivery or after sales monitoring)

Who are the customer segments?

  • Automotive OEMs (goal: win new ones)
  • Auto dealers (after market service and sales)

Why? What are our competitive strengths and value to customers?

  • Cost
  • Quality (like life)
  • Features (like charge acceptance, vibration resistance)
  • Product range
  • Service

How? What are the processes and business models?

  • Manufacturing process improvements
  • New product development with new technologies
  • Services to OEMs
  • Dealer service and new dealers
  • Buy some suppliers (vertical integration)

Existing innovation portfolio

To assess how well the existing innovation portfolio supported the strategy, they matched the portfolio items to the innovation goals by using the innovation basket approach. The results of the matching were shocking, in the words of their CEO. ” We (executives) believe that most of the innovation budget should be allocated to new product development or upgrades to existing products. However, the portfolio chart shows that these 2 categories account for only 6%, but cost and quality account for 94% of the total budget, which means we have no opportunity to grow fast. My staff like low-risk projects, while our management team likes to set quantitative criteria to select projects and no one looks at the holistic picture, including myself. This is a big reminder for us. It’s time to make a change!” 

The management team held 2 rounds of discussions, and determined the potential opportunities in response to industry trends and customer demand shift, and they identified 2 main needs: a compact size, small capacity conventional lead-acid battery for established car manufacturers, and a low voltage lithium battery (12V/24V/48V) product for EV car makers such as Tesla, BYD and Xiaopeng. 

Improved innovation portfolio 

Four months later, the innovation portfolio was updated to show a huge increase both in the total innovation budget change, from 20 million USD to 40.6 million USD, and the structure change, i.e. increase NPD proportion, for example,  one new lithium starter battery project was created with amount of 20 million USD, collaborating with external research institutes and internal lithium business units.

The innovation portfolio map we drew at the workshop really surprised me, we never thought there would be such a big gap between our thoughts and actions. 

This article was published on

24 January 2024.