Case Study Description of Reversing the AMD Fusion Launch
AMD management needs to make a critical decision on the launch sequence of its next-generation technology called Fusion. The Fusion processor concept merges the central and graphics processing units (CPU and GPU) onto one chip-- yielding advantages in performance (particularly graphics related), power consumption, and suitability for new computer form factors (tablets, all-in-one machines, etc.). AMD planned to launch Fusion at the beginning of 2011 with a high-end processor, code-named Llano, to impress the industry and consumers with the best the technology could offer (suited for high-end desktops and notebooks), and subsequently to launch low-powered versions, code-named Brazos (suited for small notebooks and netbooks). However, the development of Llano suffered delays while that of Brazos was ahead of schedule. AMD's executive committee raised the possibility of reversing the launch sequence and going with a "Brazos First" strategy. The case describes the microprocessor industry, its main competitors (AMD and Intel), and the evolving world of PC selling and buying. The case further provides a host of market research that AMD conducted to better understand the market. Students need to address the advisability of a reverse launch vs. waiting to launch all versions together and whether AMD can advance its competitive position relative to Intel with Fusion. Students need to outline their marketing approach (sales effort, pricing, consumer marketing, etc.) in the event that a reverse launch strategy is pursued. As part of the analysis, students need to take into account AMD's recent shift in branding approach: from giving a separate brand name to each new microprocessor to a tiered branding approach that would stay constant even in the face of new launches. The case allows for a deep examination of how a follower that faces a dominant industry player can use technology and marketing to compete effectively. It further poses the question of how firms should modify their branding strategy in light of perceived shifts in consumer behavior.
Swot Analysis of "Reversing the AMD Fusion Launch" written by Elie Ofek, Ryan Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amd Fusion facing as an external strategic factors. Some of the topics covered in Reversing the AMD Fusion Launch case study are - Strategic Management Strategies, Competition, Disruptive innovation, Financial management, Growth strategy, Market research, Product development, Social responsibility, Strategic planning, Strategy execution and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Reversing the AMD Fusion Launch casestudy better are - – increasing commodity prices, central banks are concerned over increasing inflation, there is backlash against globalization, there is increasing trade war between United States & China, geopolitical disruptions, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Reversing the AMD Fusion Launch
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Reversing the AMD Fusion Launch case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amd Fusion, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amd Fusion 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 Reversing the AMD Fusion Launch can be done for the following purposes –
1. Strategic planning using facts provided in Reversing the AMD Fusion Launch case study
2. Improving business portfolio management of Amd Fusion
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Amd Fusion
Strengths Reversing the AMD Fusion Launch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amd Fusion in Reversing the AMD Fusion Launch Harvard Business Review case study are -
Diverse revenue streams
– Amd Fusion is present in almost all the verticals within the industry. This has provided firm in Reversing the AMD Fusion Launch 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Amd Fusion digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amd Fusion has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Sales & Marketing industry
– Reversing the AMD Fusion Launch firm has clearly differentiated products in the market place. This has enabled Amd Fusion to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Amd Fusion to invest into research and development (R&D) and innovation.
Organizational Resilience of Amd Fusion
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amd Fusion does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Amd Fusion is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Amd Fusion 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 Amd Fusion is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Reversing the AMD Fusion Launch Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Amd Fusion is one of the most innovative firm in sector. Manager in Reversing the AMD Fusion Launch Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Amd Fusion is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Elie Ofek, Ryan Johnson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Amd Fusion are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Reversing the AMD Fusion Launch Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Amd Fusion 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 Reversing the AMD Fusion Launch HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Amd Fusion has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Reversing the AMD Fusion Launch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Reversing the AMD Fusion Launch are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Reversing the AMD Fusion Launch, in the dynamic environment Amd Fusion has struggled to respond to the nimble upstart competition. Amd Fusion has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Elie Ofek, Ryan Johnson suggests that, Amd Fusion 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amd Fusion supply chain. Even after few cautionary changes mentioned in the HBR case study - Reversing the AMD Fusion Launch, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amd Fusion vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Reversing the AMD Fusion Launch, is just above the industry average. Amd Fusion needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Amd Fusion 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. Amd Fusion 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 operating costs
– Compare to the competitors, firm in the HBR case study Reversing the AMD Fusion Launch has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Amd Fusion 's lucrative customers.
Interest costs
– Compare to the competition, Amd Fusion has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High cash cycle compare to competitors
Amd Fusion 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Amd Fusion is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Reversing the AMD Fusion Launch can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Amd Fusion needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Reversing the AMD Fusion Launch 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 Reversing the AMD Fusion Launch can leverage the sales team experience to cultivate customer relationships as Amd Fusion is planning to shift buying processes online.
Opportunities Reversing the AMD Fusion Launch | 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 Reversing the AMD Fusion Launch are -
Better consumer reach
– The expansion of the 5G network will help Amd Fusion to increase its market reach. Amd Fusion will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Amd Fusion can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Amd Fusion in the consumer business. Now Amd Fusion can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Amd Fusion has opened avenues for new revenue streams for the organization in the industry. This can help Amd Fusion to build a more holistic ecosystem as suggested in the Reversing the AMD Fusion Launch case study. Amd Fusion can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Amd Fusion has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Amd Fusion 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. Amd Fusion 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amd Fusion 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 Amd Fusion to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amd Fusion can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amd Fusion can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Amd Fusion can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
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. Amd Fusion can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Amd Fusion can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Reversing the AMD Fusion Launch suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Leveraging digital technologies
– Amd Fusion 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.
Threats Reversing the AMD Fusion Launch External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Reversing the AMD Fusion Launch are -
Stagnating economy with rate increase
– Amd Fusion 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.
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 Amd Fusion.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Amd Fusion can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Amd Fusion needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Amd Fusion can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amd Fusion with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Amd Fusion business can come under increasing regulations regarding data privacy, data security, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Amd Fusion needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Amd Fusion in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amd Fusion can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Reversing the AMD Fusion Launch .
Consumer confidence and its impact on Amd Fusion 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.
Regulatory challenges
– Amd Fusion 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 Sales & Marketing industry regulations.
Shortening product life cycle
– it is one of the major threat that Amd Fusion is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Reversing the AMD Fusion Launch 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 Reversing the AMD Fusion Launch 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 Reversing the AMD Fusion Launch 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 Reversing the AMD Fusion Launch 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 Reversing the AMD Fusion Launch 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 Amd Fusion needs to make to build a sustainable competitive advantage.