Case Study Description of Advanced Material Technology Corp. Ltd.
Advanced Material Technology Corp. (AMT), a Japan-based company and one of the world's largest manufacturers of advanced ceramic products, was considering the prospects of raising 24 billion Yen ($200 million) to finance AMT's planned capital expenditure program. The case introduces a variety of financing sources including straight debt, convertible bonds, and bonds with warrants. Currency denomination and location of a global offering are also considered. Also examines the economic and banking environment in Japan.
Swot Analysis of "Advanced Material Technology Corp. Ltd." written by Stephen R. Foerster, Akitoshi Ito includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Advanced Bonds facing as an external strategic factors. Some of the topics covered in Advanced Material Technology Corp. Ltd. case study are - Strategic Management Strategies, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Advanced Material Technology Corp. Ltd. casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing commodity prices,
there is backlash against globalization, technology disruption, etc
Introduction to SWOT Analysis of Advanced Material Technology Corp. Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Advanced Material Technology Corp. Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Advanced Bonds, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Advanced Bonds operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Advanced Material Technology Corp. Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Advanced Material Technology Corp. Ltd. case study
2. Improving business portfolio management of Advanced Bonds
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Advanced Bonds
Strengths Advanced Material Technology Corp. Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Advanced Bonds in Advanced Material Technology Corp. Ltd. Harvard Business Review case study are -
Ability to recruit top talent
– Advanced Bonds is one of the leading recruiters in the industry. Managers in the Advanced Material Technology Corp. Ltd. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Advanced Bonds has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Advanced Material Technology Corp. Ltd. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Advanced Bonds is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Advanced Bonds in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Advanced Bonds is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Advanced Bonds has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Advanced Material Technology Corp. Ltd. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Advanced Bonds has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Advanced Bonds has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Advanced Bonds has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Advanced Material Technology Corp. Ltd. Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Finance & Accounting industry
– Advanced Material Technology Corp. Ltd. firm has clearly differentiated products in the market place. This has enabled Advanced Bonds to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Advanced Bonds to invest into research and development (R&D) and innovation.
Learning organization
- Advanced Bonds is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Advanced Bonds is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Advanced Material Technology Corp. Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Advanced Bonds has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Advanced Bonds to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Advanced Bonds is present in almost all the verticals within the industry. This has provided firm in Advanced Material Technology Corp. Ltd. case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Advanced Bonds in the sector have low bargaining power. Advanced Material Technology Corp. Ltd. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Advanced Bonds to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Advanced Material Technology Corp. Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Advanced Material Technology Corp. Ltd. are -
Products dominated business model
– Even though Advanced Bonds has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Advanced Material Technology Corp. Ltd. should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Advanced Bonds has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow decision making process
– As mentioned earlier in the report, Advanced Bonds has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Advanced Bonds even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Advanced Material Technology Corp. Ltd. HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Advanced Bonds has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Advanced Material Technology Corp. Ltd. that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Advanced Material Technology Corp. Ltd. can leverage the sales team experience to cultivate customer relationships as Advanced Bonds is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Advanced Material Technology Corp. Ltd., it seems that the employees of Advanced Bonds don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen R. Foerster, Akitoshi Ito suggests that, Advanced Bonds is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Increasing silos among functional specialists
– The organizational structure of Advanced Bonds is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Advanced Bonds needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Advanced Bonds to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Advanced Bonds has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Advanced Material Technology Corp. Ltd., in the dynamic environment Advanced Bonds has struggled to respond to the nimble upstart competition. Advanced Bonds has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Advanced Material Technology Corp. Ltd. HBR case study mentions - Advanced Bonds takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Advanced Material Technology Corp. Ltd. | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Advanced Material Technology Corp. Ltd. are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Advanced Bonds can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Advanced Bonds in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Advanced Bonds can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Creating value in data economy
– The success of analytics program of Advanced Bonds has opened avenues for new revenue streams for the organization in the industry. This can help Advanced Bonds to build a more holistic ecosystem as suggested in the Advanced Material Technology Corp. Ltd. case study. Advanced Bonds can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Advanced Bonds can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Advanced Bonds can use these opportunities to build new business models that can help the communities that Advanced Bonds operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Advanced Bonds can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Developing new processes and practices
– Advanced Bonds can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Advanced Bonds can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Advanced Bonds to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Advanced Bonds to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Advanced Bonds to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Advanced Bonds can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Advanced Material Technology Corp. Ltd., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Advanced Bonds can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Advanced Bonds can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats Advanced Material Technology Corp. Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Advanced Material Technology Corp. Ltd. are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Advanced Bonds.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Advanced Bonds will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Advanced Bonds can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Advanced Bonds
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Advanced Bonds.
Regulatory challenges
– Advanced Bonds needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Advanced Bonds business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Advanced Bonds in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Advanced Material Technology Corp. Ltd., Advanced Bonds may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Advanced Bonds with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Advanced Bonds has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Advanced Bonds needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Advanced Bonds demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Advanced Material Technology Corp. Ltd. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Advanced Material Technology Corp. Ltd. needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Advanced Material Technology Corp. Ltd. is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Advanced Material Technology Corp. Ltd. is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Advanced Material Technology Corp. Ltd. is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Advanced Bonds needs to make to build a sustainable competitive advantage.
