Intel 2006: Rising to the Graphics Challenge SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Intel 2006: Rising to the Graphics Challenge
Examines the evolution of the PC hardware industry over the span of two and a half decades. The open architecture design of the IBM Personal Computer followed by the rapid appearance of clones drove a high level of standardization and modularity in the industry, and value was distributed along the value chain depending on levels of competition and ability to substitute components at each level. On the hardware side two component segments, the microprocessor and the graphics processor unit (GPU), ultimately became the most valuable parts of the chain. The GPU business had settled into a duopoly with Nvidia, Inc. and ATI Technologies (ATI). Intel had dominated the microprocessor segment, but Advanced Micro Devices (AMD) was consistently a thorn in Intel's side. Addresses the prospects of the graphics function becoming integrated with the microprocessor on a single piece of silicon. AMD had just announced the acquisition of ATI and Paul Otellini, Intel's CEO, is faced with the question of what he should do. Should he buy Nvidia, should he continue with his own internal graphics efforts, or should he listen to some of his customers and leave things separate?
Swot Analysis of "Intel 2006: Rising to the Graphics Challenge" written by Willy Shih, Elie Ofek includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ati Graphics facing as an external strategic factors. Some of the topics covered in Intel 2006: Rising to the Graphics Challenge case study are - Strategic Management Strategies, Competition, Disruptive innovation, Supply chain, Technology and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Intel 2006: Rising to the Graphics Challenge casestudy better are - – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing transportation and logistics costs, technology disruption,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Intel 2006: Rising to the Graphics Challenge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Intel 2006: Rising to the Graphics Challenge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ati Graphics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ati Graphics 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 Intel 2006: Rising to the Graphics Challenge can be done for the following purposes –
1. Strategic planning using facts provided in Intel 2006: Rising to the Graphics Challenge case study
2. Improving business portfolio management of Ati Graphics
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ati Graphics
Strengths Intel 2006: Rising to the Graphics Challenge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ati Graphics in Intel 2006: Rising to the Graphics Challenge Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Ati Graphics in the sector have low bargaining power. Intel 2006: Rising to the Graphics Challenge has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ati Graphics to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Intel 2006: Rising to the Graphics Challenge 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.
Strong track record of project management
– Ati Graphics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Ati Graphics is one of the most innovative firm in sector. Manager in Intel 2006: Rising to the Graphics Challenge Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Ati Graphics 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 Willy Shih, Elie Ofek 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.
Organizational Resilience of Ati Graphics
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ati Graphics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Ati Graphics 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 Intel 2006: Rising to the Graphics Challenge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Ati Graphics 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ati Graphics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ati Graphics 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.
Highly skilled collaborators
– Ati Graphics 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 Intel 2006: Rising to the Graphics Challenge HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Ati Graphics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ati Graphics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Ati Graphics is present in almost all the verticals within the industry. This has provided firm in Intel 2006: Rising to the Graphics Challenge 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.
Weaknesses Intel 2006: Rising to the Graphics Challenge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Intel 2006: Rising to the Graphics Challenge are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Intel 2006: Rising to the Graphics Challenge, in the dynamic environment Ati Graphics has struggled to respond to the nimble upstart competition. Ati Graphics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Ati Graphics, firm in the HBR case study Intel 2006: Rising to the Graphics Challenge needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Intel 2006: Rising to the Graphics Challenge HBR case study mentions - Ati Graphics 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.
Aligning sales with marketing
– It come across in the case study Intel 2006: Rising to the Graphics Challenge 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 Intel 2006: Rising to the Graphics Challenge can leverage the sales team experience to cultivate customer relationships as Ati Graphics is planning to shift buying processes online.
Need for greater diversity
– Ati Graphics has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Ati Graphics products
– To increase the profitability and margins on the products, Ati Graphics needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Intel 2006: Rising to the Graphics Challenge, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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 Ati Graphics supply chain. Even after few cautionary changes mentioned in the HBR case study - Intel 2006: Rising to the Graphics Challenge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ati Graphics vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Ati Graphics 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.
Skills based hiring
– The stress on hiring functional specialists at Ati Graphics 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.
Increasing silos among functional specialists
– The organizational structure of Ati Graphics is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ati Graphics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ati Graphics to focus more on services rather than just following the product oriented approach.
Opportunities Intel 2006: Rising to the Graphics Challenge | 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 Intel 2006: Rising to the Graphics Challenge are -
Using analytics as competitive advantage
– Ati Graphics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Intel 2006: Rising to the Graphics Challenge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ati Graphics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ati Graphics can use these opportunities to build new business models that can help the communities that Ati Graphics operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Ati Graphics in the consumer business. Now Ati Graphics can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Ati Graphics 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ati Graphics to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Ati Graphics to increase its market reach. Ati Graphics 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ati Graphics is facing challenges because of the dominance of functional experts in the organization. Intel 2006: Rising to the Graphics Challenge case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Ati Graphics has opened avenues for new revenue streams for the organization in the industry. This can help Ati Graphics to build a more holistic ecosystem as suggested in the Intel 2006: Rising to the Graphics Challenge case study. Ati Graphics can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Ati Graphics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ati Graphics 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ati Graphics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Ati Graphics can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Loyalty marketing
– Ati Graphics 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.
Threats Intel 2006: Rising to the Graphics Challenge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Intel 2006: Rising to the Graphics Challenge are -
High dependence on third party suppliers
– Ati Graphics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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 Ati Graphics in the Strategy & Execution sector and impact the bottomline of the organization.
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.
Stagnating economy with rate increase
– Ati Graphics 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.
Regulatory challenges
– Ati Graphics 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 Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Ati Graphics has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ati Graphics needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Ati Graphics needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Ati Graphics 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.
Increasing wage structure of Ati Graphics
– 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 Ati Graphics.
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 Ati Graphics business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ati Graphics 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 Intel 2006: Rising to the Graphics Challenge .
Shortening product life cycle
– it is one of the major threat that Ati Graphics is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Intel 2006: Rising to the Graphics Challenge 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 Intel 2006: Rising to the Graphics Challenge 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 Intel 2006: Rising to the Graphics Challenge 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 Intel 2006: Rising to the Graphics Challenge 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 Intel 2006: Rising to the Graphics Challenge 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 Ati Graphics needs to make to build a sustainable competitive advantage.
