Transforming ASUSTeK: Breaking from the Past SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Transforming ASUSTeK: Breaking from the Past
To maximize their effectiveness, color cases should be printed in color.What happens when an original design manufacturer (ODM) firm tries to transform itself into a branded goods seller? The case traces the evolution of ASUSTeK from a motherboard supplier, to an ODM of desktop and notebook PCs, through its split into three companies that separately pursue the branded business, ODM, and contract manufacturing. Chairman Jonney Shih has to not only confront the challenges of brand building, but he must also build new organizational capabilities in ASUSTeK, while Pegatron struggles to win business from ASUSTeK's former customers and now competitors. The case offers an opportunity to apply the lens of disruptive innovations to a discussion of outsourcing, examining the consequences for firms like HP and Dell that have outsourced most of their computer product design to ODM firms like ASUSTeK, only to watch them morph into competitors. Students can also examine how organizational resources, processes, and values can shape or limit its ability to move into new areas.
Swot Analysis of "Transforming ASUSTeK: Breaking from the Past" written by Willy Shih, Howard Yu, Hung-Chang Chiu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Asustek Odm facing as an external strategic factors. Some of the topics covered in Transforming ASUSTeK: Breaking from the Past case study are - Strategic Management Strategies, Disruptive innovation, Manufacturing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Transforming ASUSTeK: Breaking from the Past casestudy better are - – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing commodity prices, technology disruption, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Transforming ASUSTeK: Breaking from the Past
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transforming ASUSTeK: Breaking from the Past case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Asustek Odm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Asustek Odm 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 Transforming ASUSTeK: Breaking from the Past can be done for the following purposes –
1. Strategic planning using facts provided in Transforming ASUSTeK: Breaking from the Past case study
2. Improving business portfolio management of Asustek Odm
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 Asustek Odm
Strengths Transforming ASUSTeK: Breaking from the Past | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Asustek Odm in Transforming ASUSTeK: Breaking from the Past Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Asustek Odm in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Asustek Odm in the sector have low bargaining power. Transforming ASUSTeK: Breaking from the Past has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Asustek Odm to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Asustek Odm is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Asustek Odm 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 Asustek Odm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Asustek Odm 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 Transforming ASUSTeK: Breaking from the Past - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Asustek Odm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Asustek Odm 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.
High switching costs
– The high switching costs that Asustek Odm 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.
Innovation driven organization
– Asustek Odm is one of the most innovative firm in sector. Manager in Transforming ASUSTeK: Breaking from the Past Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Asustek Odm
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Asustek Odm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Asustek Odm is present in almost all the verticals within the industry. This has provided firm in Transforming ASUSTeK: Breaking from the Past 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Asustek Odm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Asustek Odm 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.
Training and development
– Asustek Odm has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Transforming ASUSTeK: Breaking from the Past 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.
Weaknesses Transforming ASUSTeK: Breaking from the Past | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Transforming ASUSTeK: Breaking from the Past are -
Interest costs
– Compare to the competition, Asustek Odm 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.
Slow to strategic competitive environment developments
– As Transforming ASUSTeK: Breaking from the Past HBR case study mentions - Asustek Odm 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.
High cash cycle compare to competitors
Asustek Odm 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.
Lack of clear differentiation of Asustek Odm products
– To increase the profitability and margins on the products, Asustek Odm needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Asustek Odm, firm in the HBR case study Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past, in the dynamic environment Asustek Odm has struggled to respond to the nimble upstart competition. Asustek Odm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih, Howard Yu, Hung-Chang Chiu suggests that, Asustek Odm 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.
Slow decision making process
– As mentioned earlier in the report, Asustek Odm 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. Asustek Odm 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.
Aligning sales with marketing
– It come across in the case study Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past can leverage the sales team experience to cultivate customer relationships as Asustek Odm is planning to shift buying processes online.
Need for greater diversity
– Asustek Odm 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Transforming ASUSTeK: Breaking from the Past 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 Asustek Odm 's lucrative customers.
Opportunities Transforming ASUSTeK: Breaking from the Past | 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 Transforming ASUSTeK: Breaking from the Past are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Asustek Odm is facing challenges because of the dominance of functional experts in the organization. Transforming ASUSTeK: Breaking from the Past case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Asustek Odm has opened avenues for new revenue streams for the organization in the industry. This can help Asustek Odm to build a more holistic ecosystem as suggested in the Transforming ASUSTeK: Breaking from the Past case study. Asustek Odm can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Asustek Odm 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
– Asustek Odm 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.
Buying journey improvements
– Asustek Odm can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transforming ASUSTeK: Breaking from the Past 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Asustek Odm 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Asustek Odm 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. Asustek Odm 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.
Using analytics as competitive advantage
– Asustek Odm 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 Transforming ASUSTeK: Breaking from the Past - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Asustek Odm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Asustek Odm 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 Strategy & Execution segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Asustek Odm 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.
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. Asustek Odm 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 Asustek Odm in the consumer business. Now Asustek Odm can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Asustek Odm to increase its market reach. Asustek Odm 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.
Threats Transforming ASUSTeK: Breaking from the Past External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Transforming ASUSTeK: Breaking from the Past are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Asustek Odm can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Asustek Odm 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. Asustek Odm can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Asustek Odm has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Asustek Odm 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.
Stagnating economy with rate increase
– Asustek Odm 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Asustek Odm 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 Asustek Odm is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Asustek Odm needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Asustek Odm 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 Transforming ASUSTeK: Breaking from the Past .
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 Asustek Odm business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Asustek Odm 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Transforming ASUSTeK: Breaking from the Past, Asustek Odm 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 .
Increasing wage structure of Asustek Odm
– 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 Asustek Odm.
Weighted SWOT Analysis of Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past 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 Transforming ASUSTeK: Breaking from the Past 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 Asustek Odm needs to make to build a sustainable competitive advantage.
