Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Interplay of Strategy and Finance at Intel: The Fab Location Decision (A)
Describes the highly complex strategic and financial considerations Intel's CEO must take into account in deciding whether and where to build a state-of-the-art microprocessor factory (known as a "fab"). Specifically, examines a fab location decision made by Intel in 2002, where it faced mounting pressures and attractive subsidies to locate a state-of-the-art fab in Asia. Intel must balance purely financial considerations with strategic considerations, such as the impact of the location of a new fab on its existing network of plants, as well as the geopolitical concerns of the governments of the United States, China, and others. Includes the voices of key decision makers at Intel, including the CEO, CFO, and head of manufacturing.
Swot Analysis of "Interplay of Strategy and Finance at Intel: The Fab Location Decision (A)" written by Robert A. Burgelman, Philip Meza includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fab Intel facing as an external strategic factors. Some of the topics covered in Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) case study are - Strategic Management Strategies, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing transportation and logistics costs, increasing energy prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, central banks are concerned over increasing inflation,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Interplay of Strategy and Finance at Intel: The Fab Location Decision (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fab Intel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fab Intel 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) can be done for the following purposes –
1. Strategic planning using facts provided in Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) case study
2. Improving business portfolio management of Fab Intel
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 Fab Intel
Strengths Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fab Intel in Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Fab Intel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Fab Intel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Fab Intel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fab Intel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Fab Intel is present in almost all the verticals within the industry. This has provided firm in Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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.
Cross disciplinary teams
– Horizontal connected teams at the Fab Intel 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.
Ability to recruit top talent
– Fab Intel is one of the leading recruiters in the industry. Managers in the Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Strategy & Execution field
– Fab Intel 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 Fab Intel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Fab Intel 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 Fab Intel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fab Intel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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.
Successful track record of launching new products
– Fab Intel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fab Intel 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.
Highly skilled collaborators
– Fab Intel 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fab Intel is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Fab Intel 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. Fab Intel 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.
Low market penetration in new markets
– Outside its home market of Fab Intel, firm in the HBR case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Fab Intel has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A), in the dynamic environment Fab Intel has struggled to respond to the nimble upstart competition. Fab Intel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Fab Intel 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.
Increasing silos among functional specialists
– The organizational structure of Fab Intel is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fab Intel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fab Intel to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Fab Intel products
– To increase the profitability and margins on the products, Fab Intel needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Fab Intel supply chain. Even after few cautionary changes mentioned in the HBR case study - Interplay of Strategy and Finance at Intel: The Fab Location Decision (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fab Intel vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A), it seems that the employees of Fab Intel 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.
Products dominated business model
– Even though Fab Intel has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) should strive to include more intangible value offerings along with its core products and services.
Opportunities Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) | 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fab Intel 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.
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 Fab Intel 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.
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. Fab Intel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Fab Intel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fab Intel 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, Interplay of Strategy and Finance at Intel: The Fab Location Decision (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fab Intel 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.
Using analytics as competitive advantage
– Fab Intel 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fab Intel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fab Intel 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 Fab Intel to hire the very best people irrespective of their geographical location.
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 Fab Intel in the consumer business. Now Fab Intel can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Fab Intel 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.
Developing new processes and practices
– Fab Intel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fab Intel can use these opportunities to build new business models that can help the communities that Fab Intel operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Fab Intel 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) are -
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. Fab Intel 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fab Intel 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) .
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 Fab Intel.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fab Intel 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.
Shortening product life cycle
– it is one of the major threat that Fab Intel is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Interplay of Strategy and Finance at Intel: The Fab Location Decision (A), Fab Intel 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 .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fab Intel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Fab Intel has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fab Intel 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 dependence on third party suppliers
– Fab Intel 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.
Stagnating economy with rate increase
– Fab Intel 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
– Fab Intel 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.
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 Fab Intel in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Interplay of Strategy and Finance at Intel: The Fab Location Decision (A) 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 Fab Intel needs to make to build a sustainable competitive advantage.
