Case Study Description of Amyris Biotechnologies: Commercializing Biofuel
In 2009, Amyris Biotechnologies was building a plant in Brazil that used synthetic biology to convert sugarcane into both renewable fuels and renewable chemicals. The Amyris' marketing team was investigating the commercial interest for both types of products, while the research and development team and the operations group were building processes that could accommodate both as well. CEO John Melo hoped to have commercial product available in 2011; however, he realized that pursuing both chemicals and fuels added even more complexity to a business that was already executing multiple development steps in parallel. The case looks at the various strategic and operational decisions facing Melo as he planned the company's optimal commercialization strategy.
Authors :: Gary P. Pisano, Alison Berkley Wagonfeld
Swot Analysis of "Amyris Biotechnologies: Commercializing Biofuel" written by Gary P. Pisano, Alison Berkley Wagonfeld includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amyris Biotechnologies facing as an external strategic factors. Some of the topics covered in Amyris Biotechnologies: Commercializing Biofuel case study are - Strategic Management Strategies, Growth strategy, Marketing, Operations management, Product development, Project management, Risk management, Sustainability, Technology and Technology & Operations.
Some of the macro environment factors that can be used to understand the Amyris Biotechnologies: Commercializing Biofuel casestudy better are - – increasing household debt because of falling income levels, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, wage bills are increasing, etc
Introduction to SWOT Analysis of Amyris Biotechnologies: Commercializing Biofuel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amyris Biotechnologies: Commercializing Biofuel case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amyris Biotechnologies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amyris Biotechnologies 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 Amyris Biotechnologies: Commercializing Biofuel can be done for the following purposes –
1. Strategic planning using facts provided in Amyris Biotechnologies: Commercializing Biofuel case study
2. Improving business portfolio management of Amyris Biotechnologies
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Amyris Biotechnologies
Strengths Amyris Biotechnologies: Commercializing Biofuel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amyris Biotechnologies in Amyris Biotechnologies: Commercializing Biofuel Harvard Business Review case study are -
Ability to recruit top talent
– Amyris Biotechnologies is one of the leading recruiters in the industry. Managers in the Amyris Biotechnologies: Commercializing Biofuel are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Amyris Biotechnologies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Amyris Biotechnologies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amyris Biotechnologies 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.
Diverse revenue streams
– Amyris Biotechnologies is present in almost all the verticals within the industry. This has provided firm in Amyris Biotechnologies: Commercializing Biofuel 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.
Effective Research and Development (R&D)
– Amyris Biotechnologies 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 Amyris Biotechnologies: Commercializing Biofuel - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Amyris Biotechnologies 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
– Amyris Biotechnologies is one of the most innovative firm in sector. Manager in Amyris Biotechnologies: Commercializing Biofuel Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Amyris Biotechnologies 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 Amyris Biotechnologies: Commercializing Biofuel HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Amyris Biotechnologies: Commercializing Biofuel 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.
Analytics focus
– Amyris Biotechnologies 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 Gary P. Pisano, Alison Berkley Wagonfeld 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.
Successful track record of launching new products
– Amyris Biotechnologies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amyris Biotechnologies 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.
Training and development
– Amyris Biotechnologies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies: Commercializing Biofuel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amyris Biotechnologies: Commercializing Biofuel are -
Capital Spending Reduction
– Even during the low interest decade, Amyris Biotechnologies 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies has relatively successful track record of launching new products.
Lack of clear differentiation of Amyris Biotechnologies products
– To increase the profitability and margins on the products, Amyris Biotechnologies needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Amyris Biotechnologies 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 - Amyris Biotechnologies: Commercializing Biofuel should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Amyris Biotechnologies 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 operating costs
– Compare to the competitors, firm in the HBR case study Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies 's lucrative customers.
Need for greater diversity
– Amyris Biotechnologies 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.
Low market penetration in new markets
– Outside its home market of Amyris Biotechnologies, firm in the HBR case study Amyris Biotechnologies: Commercializing Biofuel needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Amyris Biotechnologies: Commercializing Biofuel, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Gary P. Pisano, Alison Berkley Wagonfeld suggests that, Amyris Biotechnologies 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.
Skills based hiring
– The stress on hiring functional specialists at Amyris Biotechnologies 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.
Opportunities Amyris Biotechnologies: Commercializing Biofuel | 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 Amyris Biotechnologies: Commercializing Biofuel are -
Learning at scale
– Online learning technologies has now opened space for Amyris Biotechnologies 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amyris Biotechnologies is facing challenges because of the dominance of functional experts in the organization. Amyris Biotechnologies: Commercializing Biofuel 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Amyris Biotechnologies 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. Amyris Biotechnologies 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
– Amyris Biotechnologies 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amyris Biotechnologies can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Amyris Biotechnologies 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.
Creating value in data economy
– The success of analytics program of Amyris Biotechnologies has opened avenues for new revenue streams for the organization in the industry. This can help Amyris Biotechnologies to build a more holistic ecosystem as suggested in the Amyris Biotechnologies: Commercializing Biofuel case study. Amyris Biotechnologies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amyris Biotechnologies in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Amyris Biotechnologies 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 Technology & Operations segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amyris Biotechnologies 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Amyris Biotechnologies 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 Amyris Biotechnologies to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Amyris Biotechnologies can develop new processes and procedures in Technology & Operations 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, Amyris Biotechnologies can use these opportunities to build new business models that can help the communities that Amyris Biotechnologies operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Amyris Biotechnologies: Commercializing Biofuel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amyris Biotechnologies: Commercializing Biofuel are -
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 Amyris Biotechnologies business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Amyris Biotechnologies 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.
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 Amyris Biotechnologies.
Stagnating economy with rate increase
– Amyris Biotechnologies 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.
Environmental challenges
– Amyris Biotechnologies 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. Amyris Biotechnologies can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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. Amyris Biotechnologies 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Amyris Biotechnologies in the Technology & Operations industry. The Technology & Operations 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Amyris Biotechnologies: Commercializing Biofuel, Amyris Biotechnologies may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Regulatory challenges
– Amyris Biotechnologies 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 Technology & Operations industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amyris Biotechnologies 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 Amyris Biotechnologies: Commercializing Biofuel .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Amyris Biotechnologies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Amyris Biotechnologies in the Technology & Operations sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Amyris Biotechnologies has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Amyris Biotechnologies needs to keep up with the evolution of technology in the Technology & Operations 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.
Weighted SWOT Analysis of Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies: Commercializing Biofuel 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 Amyris Biotechnologies needs to make to build a sustainable competitive advantage.
