AMD: A Customer-Centric Approach to Innovation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of AMD: A Customer-Centric Approach to Innovation
AMD's launch of the Opteron microprocessor in 2003 has allowed the company to make inroads into the lucrative server segment. A long-time follower to Intel, AMD management felt it was in a position to lead the microprocessor industry in new directions. However, in 2006 it was not clear whether Opteron's success in the server segment would translate into success in other microprocessor segments, notably corporate desktop and laptop, and whether the initial success in servers could be sustained in the future. Intel's imminent new product and pricing plans, as well as its existing brand power, could greatly hamper AMD's growth and thwart its new initiatives--which included opening up its architecture for end users to customize and recast its brand identity. Also examines how a company tries to gain competitive advantage through an approach to innovation that emphasizes customer centricity.
Swot Analysis of "AMD: A Customer-Centric Approach to Innovation" written by Elie Ofek, Lauren Barley includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Microprocessor Amd's facing as an external strategic factors. Some of the topics covered in AMD: A Customer-Centric Approach to Innovation case study are - Strategic Management Strategies, Pricing, Product development and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AMD: A Customer-Centric Approach to Innovation casestudy better are - – there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of AMD: A Customer-Centric Approach to Innovation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AMD: A Customer-Centric Approach to Innovation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Microprocessor Amd's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation can be done for the following purposes –
1. Strategic planning using facts provided in AMD: A Customer-Centric Approach to Innovation case study
2. Improving business portfolio management of Microprocessor Amd's
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 Microprocessor Amd's
Strengths AMD: A Customer-Centric Approach to Innovation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Microprocessor Amd's in AMD: A Customer-Centric Approach to Innovation Harvard Business Review case study are -
Highly skilled collaborators
– Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation 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 Microprocessor Amd's 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.
Organizational Resilience of Microprocessor Amd's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Microprocessor Amd's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Microprocessor Amd's is one of the most innovative firm in sector. Manager in AMD: A Customer-Centric Approach to Innovation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Microprocessor Amd's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AMD: A Customer-Centric Approach to Innovation 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.
Diverse revenue streams
– Microprocessor Amd's is present in almost all the verticals within the industry. This has provided firm in AMD: A Customer-Centric Approach to Innovation 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.
Ability to lead change in Strategy & Execution field
– Microprocessor Amd's 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 Microprocessor Amd's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Microprocessor Amd's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Microprocessor Amd's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Microprocessor Amd's 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, Lauren Barley 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.
Successful track record of launching new products
– Microprocessor Amd's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Microprocessor Amd's 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Microprocessor Amd's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Microprocessor Amd's 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.
Weaknesses AMD: A Customer-Centric Approach to Innovation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AMD: A Customer-Centric Approach to Innovation are -
Aligning sales with marketing
– It come across in the case study AMD: A Customer-Centric Approach to Innovation 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 AMD: A Customer-Centric Approach to Innovation can leverage the sales team experience to cultivate customer relationships as Microprocessor Amd's is planning to shift buying processes online.
Need for greater diversity
– Microprocessor Amd's 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.
Slow to strategic competitive environment developments
– As AMD: A Customer-Centric Approach to Innovation HBR case study mentions - Microprocessor Amd's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Microprocessor Amd's 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.
Slow decision making process
– As mentioned earlier in the report, Microprocessor Amd's 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. Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation 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 Microprocessor Amd's 's lucrative customers.
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 Microprocessor Amd's supply chain. Even after few cautionary changes mentioned in the HBR case study - AMD: A Customer-Centric Approach to Innovation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Microprocessor Amd's vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Microprocessor Amd's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Elie Ofek, Lauren Barley suggests that, Microprocessor Amd's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AMD: A Customer-Centric Approach to Innovation, in the dynamic environment Microprocessor Amd's has struggled to respond to the nimble upstart competition. Microprocessor Amd's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study AMD: A Customer-Centric Approach to Innovation, 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.
Opportunities AMD: A Customer-Centric Approach to Innovation | 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 AMD: A Customer-Centric Approach to Innovation are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Microprocessor Amd's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Microprocessor Amd's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AMD: A Customer-Centric Approach to Innovation 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
– Microprocessor Amd's 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.
Manufacturing automation
– Microprocessor Amd's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Microprocessor Amd's 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.
Better consumer reach
– The expansion of the 5G network will help Microprocessor Amd's to increase its market reach. Microprocessor Amd's 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.
Using analytics as competitive advantage
– Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Microprocessor Amd's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Microprocessor Amd's has opened avenues for new revenue streams for the organization in the industry. This can help Microprocessor Amd's to build a more holistic ecosystem as suggested in the AMD: A Customer-Centric Approach to Innovation case study. Microprocessor Amd's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Microprocessor Amd's 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 Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Microprocessor Amd's can use these opportunities to build new business models that can help the communities that Microprocessor Amd's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Microprocessor Amd's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Microprocessor Amd's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Microprocessor Amd's is facing challenges because of the dominance of functional experts in the organization. AMD: A Customer-Centric Approach to Innovation 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.
Threats AMD: A Customer-Centric Approach to Innovation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AMD: A Customer-Centric Approach to Innovation are -
Regulatory challenges
– Microprocessor Amd's 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Microprocessor Amd's 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
– Microprocessor Amd's 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. Microprocessor Amd's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Microprocessor Amd's 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.
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 Microprocessor Amd's.
High dependence on third party suppliers
– Microprocessor Amd's 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.
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 Microprocessor Amd's in the Strategy & Execution sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Microprocessor Amd's has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Microprocessor Amd's 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.
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 Microprocessor Amd's 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 Microprocessor Amd's in the Strategy & Execution industry. The Strategy & Execution 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.
Stagnating economy with rate increase
– Microprocessor Amd's 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 Microprocessor Amd's
– 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 Microprocessor Amd's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AMD: A Customer-Centric Approach to Innovation, Microprocessor Amd's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of AMD: A Customer-Centric Approach to Innovation 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 AMD: A Customer-Centric Approach to Innovation 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 AMD: A Customer-Centric Approach to Innovation 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 AMD: A Customer-Centric Approach to Innovation 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 AMD: A Customer-Centric Approach to Innovation 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 Microprocessor Amd's needs to make to build a sustainable competitive advantage.