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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, there is backlash against globalization,
increasing commodity prices, technology disruption, 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 -
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Amyris Biotechnologies in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the 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.
High brand equity
– Amyris Biotechnologies has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amyris Biotechnologies to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Learning organization
- Amyris Biotechnologies 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 Amyris Biotechnologies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Amyris Biotechnologies: Commercializing Biofuel Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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 -
Slow to strategic competitive environment developments
– As Amyris Biotechnologies: Commercializing Biofuel HBR case study mentions - Amyris Biotechnologies 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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amyris Biotechnologies supply chain. Even after few cautionary changes mentioned in the HBR case study - Amyris Biotechnologies: Commercializing Biofuel, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amyris Biotechnologies vulnerable to further global disruptions in South East Asia.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amyris Biotechnologies: Commercializing Biofuel, it seems that the employees of Amyris Biotechnologies 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.
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.
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 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.
Increasing silos among functional specialists
– The organizational structure of Amyris Biotechnologies is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Amyris Biotechnologies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amyris Biotechnologies to focus more on services rather than just following the product oriented approach.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Amyris Biotechnologies: Commercializing Biofuel, in the dynamic environment Amyris Biotechnologies has struggled to respond to the nimble upstart competition. Amyris Biotechnologies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Amyris Biotechnologies 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.
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 -
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.
Better consumer reach
– The expansion of the 5G network will help Amyris Biotechnologies to increase its market reach. Amyris Biotechnologies 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.
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 Amyris Biotechnologies in the consumer business. Now Amyris Biotechnologies can target international markets with far fewer capital restrictions requirements than the existing system.
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. Amyris Biotechnologies can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Amyris Biotechnologies 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 Amyris Biotechnologies: Commercializing Biofuel - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amyris Biotechnologies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Amyris Biotechnologies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amyris Biotechnologies: Commercializing Biofuel 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Amyris Biotechnologies can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amyris Biotechnologies 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, Amyris Biotechnologies: Commercializing Biofuel, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 Amyris Biotechnologies 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.
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 -
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. Amyris Biotechnologies needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
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.
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.
Consumer confidence and its impact on Amyris Biotechnologies 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
– 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.
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.
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.
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.