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 - – wage bills are increasing, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
technology disruption, geopolitical disruptions, 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 -
Superior customer experience
– The customer experience strategy of Microprocessor Amd's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– AMD: A Customer-Centric Approach to Innovation firm has clearly differentiated products in the market place. This has enabled Microprocessor Amd's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Microprocessor Amd's to invest into research and development (R&D) and innovation.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Microprocessor Amd's in the sector have low bargaining power. AMD: A Customer-Centric Approach to Innovation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Microprocessor Amd's to manage not only supply disruptions but also source products at highly competitive prices.
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.
Cross disciplinary teams
– Horizontal connected teams at the Microprocessor Amd's 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.
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.
Ability to recruit top talent
– Microprocessor Amd's is one of the leading recruiters in the industry. Managers in the AMD: A Customer-Centric Approach to Innovation 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)
– 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.
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.
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 -
Lack of clear differentiation of Microprocessor Amd's products
– To increase the profitability and margins on the products, Microprocessor Amd's needs to provide more differentiated products than what it is currently offering in the marketplace.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the AMD: A Customer-Centric Approach to Innovation 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 Microprocessor Amd's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AMD: A Customer-Centric Approach to Innovation, it seems that the employees of Microprocessor Amd's 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Microprocessor Amd's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AMD: A Customer-Centric Approach to Innovation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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.
Increasing silos among functional specialists
– The organizational structure of Microprocessor Amd's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Microprocessor Amd's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Microprocessor Amd's to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Microprocessor Amd's, firm in the HBR case study AMD: A Customer-Centric Approach to Innovation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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 -
Learning at scale
– Online learning technologies has now opened space for Microprocessor Amd's 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Microprocessor Amd's 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. Microprocessor Amd's 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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Microprocessor Amd's 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.
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 Microprocessor Amd's in the consumer business. Now Microprocessor Amd's can target international markets with far fewer capital restrictions requirements than the existing system.
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 Microprocessor Amd's 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.
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. Microprocessor Amd's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Microprocessor Amd's can develop new processes and procedures in Strategy & Execution 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Microprocessor Amd's 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, AMD: A Customer-Centric Approach to Innovation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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. Microprocessor Amd's 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.
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.
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. Microprocessor Amd's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Microprocessor Amd's 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 AMD: A Customer-Centric Approach to Innovation .
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.
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.
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.