Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002
This case describes the rights offering by CSM in 2002 which was largely judged to be a failure despite the company receiving the full planned proceeds. The case takes the reader through the rights offering process, and details the "hiccups" arising from adverse market conditions as well as process mismanagement. It also allows the reader to use actual data provided by several top broker research analysts to conduct a valuation exercise. Other questions addressed include: Does price matter in a rights offering? Are investors rational? How does one gauge the value of a project?
Swot Analysis of "Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002" written by Pierre Hillion, Aaron Yeo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Rights Offering facing as an external strategic factors. Some of the topics covered in Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 case study are - Strategic Management Strategies, Corporate governance, Financial analysis, Financial management, Technology and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 casestudy better are - – increasing energy prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc
Introduction to SWOT Analysis of Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rights Offering, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rights Offering 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 can be done for the following purposes –
1. Strategic planning using facts provided in Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 case study
2. Improving business portfolio management of Rights Offering
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rights Offering
Strengths Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rights Offering in Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 Harvard Business Review case study are -
Ability to recruit top talent
– Rights Offering is one of the leading recruiters in the industry. Managers in the Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Rights Offering 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.
Strong track record of project management
– Rights Offering 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
– Rights Offering has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rights Offering to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Rights Offering in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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.
Innovation driven organization
– Rights Offering is one of the most innovative firm in sector. Manager in Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Rights Offering has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Rights Offering 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.
Organizational Resilience of Rights Offering
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Rights Offering does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Rights Offering 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 Rights Offering in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Rights Offering in the sector have low bargaining power. Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rights Offering to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Rights Offering digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rights Offering 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 are -
High cash cycle compare to competitors
Rights Offering has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Rights Offering 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.
Products dominated business model
– Even though Rights Offering 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 - Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 should strive to include more intangible value offerings along with its core products and services.
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 Rights Offering supply chain. Even after few cautionary changes mentioned in the HBR case study - Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Rights Offering vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Rights Offering has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Rights Offering is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Rights Offering, firm in the HBR case study Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Rights Offering 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.
Interest costs
– Compare to the competition, Rights Offering 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 Rights Offering 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002, in the dynamic environment Rights Offering has struggled to respond to the nimble upstart competition. Rights Offering has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 | 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Rights Offering 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. Rights Offering 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.
Leveraging digital technologies
– Rights Offering 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Rights Offering 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.
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 Rights Offering in the consumer business. Now Rights Offering can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rights Offering 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 Rights Offering to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Rights Offering 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.
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. Rights Offering can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Rights Offering 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 Finance & Accounting segment.
Better consumer reach
– The expansion of the 5G network will help Rights Offering to increase its market reach. Rights Offering will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Rights Offering can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rights Offering in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting 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 Rights Offering 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.
Loyalty marketing
– Rights Offering 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 are -
Stagnating economy with rate increase
– Rights Offering 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 Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rights Offering can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Rights Offering in the Finance & Accounting sector and impact the bottomline of the organization.
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. Rights Offering needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Environmental challenges
– Rights Offering 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. Rights Offering can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Shortening product life cycle
– it is one of the major threat that Rights Offering is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Rights Offering has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Rights Offering needs to keep up with the evolution of technology in the Finance & Accounting 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.
Regulatory challenges
– Rights Offering 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 Finance & Accounting industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002, Rights Offering may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Rights Offering
– 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 Rights Offering.
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.
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 Rights Offering.
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. Rights Offering 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.
Weighted SWOT Analysis of Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Chartered Semiconductor Manufacturing Limited: When Rights go Wrong: The Rights Offering of September 2002 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 Rights Offering needs to make to build a sustainable competitive advantage.
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