Procomp Informatic: Stepping on Ethical Landmines in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Procomp Informatic: Stepping on Ethical Landmines in Asia
The collapse of Procomp Informatics Ltd, a major Taiwanese chipmaker, has been regarded by Taiwan's market watchdogs as similar to the scandal of the U.S. energy giant Enron in 2001. In June 2004, Procomp defaulted on a bond payment and structured for bankruptcy, despite a huge cash balance recorded in its books. It was discovered that the company's executives and its overseas sales agents had colluded in overstating sales revenue, manipulating stock prices, illegally leveraging assets, and arranging bonds through paper companies. The incident left thousands of company shareholders with massive financial losses. Raises concerns about corporate governance and risk management of public companies in Taiwan, and calls into question the credibility of the financial reporting process, companies' internal controls, and corporate ethics in the Asian context.
Swot Analysis of "Procomp Informatic: Stepping on Ethical Landmines in Asia" written by Claudia H. L. Woo, Amy Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Procomp Chipmaker facing as an external strategic factors. Some of the topics covered in Procomp Informatic: Stepping on Ethical Landmines in Asia case study are - Strategic Management Strategies, Ethics, Financial management, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Procomp Informatic: Stepping on Ethical Landmines in Asia casestudy better are - – wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, technology disruption, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Procomp Informatic: Stepping on Ethical Landmines in Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Procomp Informatic: Stepping on Ethical Landmines in Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Procomp Chipmaker, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Procomp Chipmaker 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 Procomp Informatic: Stepping on Ethical Landmines in Asia can be done for the following purposes –
1. Strategic planning using facts provided in Procomp Informatic: Stepping on Ethical Landmines in Asia case study
2. Improving business portfolio management of Procomp Chipmaker
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 Procomp Chipmaker
Strengths Procomp Informatic: Stepping on Ethical Landmines in Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Procomp Chipmaker in Procomp Informatic: Stepping on Ethical Landmines in Asia Harvard Business Review case study are -
Learning organization
- Procomp Chipmaker is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Procomp Chipmaker is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Procomp Informatic: Stepping on Ethical Landmines in Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Procomp Chipmaker digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Procomp Chipmaker 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.
Ability to lead change in Finance & Accounting field
– Procomp Chipmaker 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 Procomp Chipmaker in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Procomp Chipmaker 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 Procomp Informatic: Stepping on Ethical Landmines in Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Procomp Chipmaker 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 Claudia H. L. Woo, Amy Lau 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.
Cross disciplinary teams
– Horizontal connected teams at the Procomp Chipmaker 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.
Training and development
– Procomp Chipmaker has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Procomp Informatic: Stepping on Ethical Landmines in Asia 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.
High brand equity
– Procomp Chipmaker has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Procomp Chipmaker to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Procomp Chipmaker 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.
Effective Research and Development (R&D)
– Procomp Chipmaker 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 Procomp Informatic: Stepping on Ethical Landmines in Asia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Procomp Informatic: Stepping on Ethical Landmines in Asia firm has clearly differentiated products in the market place. This has enabled Procomp Chipmaker to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Procomp Chipmaker to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Procomp Chipmaker in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Procomp Informatic: Stepping on Ethical Landmines in Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Procomp Informatic: Stepping on Ethical Landmines in Asia are -
Interest costs
– Compare to the competition, Procomp Chipmaker 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Claudia H. L. Woo, Amy Lau suggests that, Procomp Chipmaker 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Chipmaker 's lucrative customers.
Need for greater diversity
– Procomp Chipmaker 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Procomp Chipmaker is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Procomp Informatic: Stepping on Ethical Landmines in Asia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Procomp Informatic: Stepping on Ethical Landmines in Asia, is just above the industry average. Procomp Chipmaker needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Procomp Informatic: Stepping on Ethical Landmines in Asia, in the dynamic environment Procomp Chipmaker has struggled to respond to the nimble upstart competition. Procomp Chipmaker has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Procomp Informatic: Stepping on Ethical Landmines in Asia, it seems that the employees of Procomp Chipmaker 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.
Skills based hiring
– The stress on hiring functional specialists at Procomp Chipmaker 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.
Low market penetration in new markets
– Outside its home market of Procomp Chipmaker, firm in the HBR case study Procomp Informatic: Stepping on Ethical Landmines in Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Procomp Informatic: Stepping on Ethical Landmines in Asia HBR case study mentions - Procomp Chipmaker 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.
Opportunities Procomp Informatic: Stepping on Ethical Landmines in Asia | 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 Procomp Informatic: Stepping on Ethical Landmines in Asia are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Procomp Chipmaker can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Procomp Chipmaker 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.
Creating value in data economy
– The success of analytics program of Procomp Chipmaker has opened avenues for new revenue streams for the organization in the industry. This can help Procomp Chipmaker to build a more holistic ecosystem as suggested in the Procomp Informatic: Stepping on Ethical Landmines in Asia case study. Procomp Chipmaker can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Procomp Chipmaker can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Procomp Informatic: Stepping on Ethical Landmines in Asia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Procomp Chipmaker 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 Procomp Chipmaker to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Procomp Chipmaker 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.
Developing new processes and practices
– Procomp Chipmaker can develop new processes and procedures in Finance & Accounting 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.
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 Procomp Chipmaker in the consumer business. Now Procomp Chipmaker can target international markets with far fewer capital restrictions requirements than the existing system.
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. Procomp Chipmaker 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. Procomp Chipmaker 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
– Procomp Chipmaker 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.
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. Procomp Chipmaker can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Procomp Chipmaker can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Procomp Chipmaker 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.
Threats Procomp Informatic: Stepping on Ethical Landmines in Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Procomp Informatic: Stepping on Ethical Landmines in Asia are -
Shortening product life cycle
– it is one of the major threat that Procomp Chipmaker is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Procomp Chipmaker 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. Procomp Chipmaker can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Procomp Chipmaker
– 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 Procomp Chipmaker.
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. Procomp Chipmaker can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Procomp Chipmaker needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Procomp Chipmaker 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Procomp Chipmaker in the Finance & Accounting industry. The Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Procomp Chipmaker with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Procomp Chipmaker business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Procomp Chipmaker has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Procomp Chipmaker 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Procomp Chipmaker 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Procomp Informatic: Stepping on Ethical Landmines in Asia, Procomp Chipmaker 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 .
Weighted SWOT Analysis of Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Chipmaker needs to make to build a sustainable competitive advantage.