Procomp Informatic: Stepping on Ethical Landmines in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
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 - – central banks are concerned over increasing inflation, geopolitical disruptions, technology disruption, there is increasing trade war between United States & China, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, wage bills are increasing, 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 -
Strong track record of project management
– Procomp Chipmaker is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Innovation driven organization
– Procomp Chipmaker is one of the most innovative firm in sector. Manager in Procomp Informatic: Stepping on Ethical Landmines in Asia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Diverse revenue streams
– Procomp Chipmaker is present in almost all the verticals within the industry. This has provided firm in Procomp Informatic: Stepping on Ethical Landmines in Asia 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.
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.
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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Procomp Informatic: Stepping on Ethical Landmines in Asia 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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Chipmaker has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Procomp Informatic: Stepping on Ethical Landmines in Asia 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 Procomp Informatic: Stepping on Ethical Landmines in Asia can leverage the sales team experience to cultivate customer relationships as Procomp Chipmaker is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Procomp Chipmaker needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Procomp Chipmaker products
– To increase the profitability and margins on the products, Procomp Chipmaker needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Procomp Chipmaker 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
– 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.
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.
Increasing silos among functional specialists
– The organizational structure of Procomp Chipmaker is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Procomp Chipmaker needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Procomp Chipmaker to focus more on services rather than just following the product 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.
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.
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.
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 -
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 Procomp Chipmaker 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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Procomp Chipmaker can use these opportunities to build new business models that can help the communities that Procomp Chipmaker operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
Loyalty marketing
– Procomp Chipmaker has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in 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.
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. Procomp Chipmaker can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Procomp Chipmaker 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, Procomp Informatic: Stepping on Ethical Landmines in Asia, 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 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 -
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 Procomp Chipmaker.
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. Procomp Chipmaker 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.
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.
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.
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.
Regulatory challenges
– Procomp Chipmaker 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.
Stagnating economy with rate increase
– Procomp Chipmaker can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Procomp Chipmaker 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 Procomp Informatic: Stepping on Ethical Landmines in Asia .
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.
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.
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.
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 .
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.
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.
