Case Study Description of AIC Netbooks: Optimizing Product Assembly
AIC Systems, located in Taichung, Taiwan, is a manufacturer of printed circuit boards, primarily for motherboards and video cards for personal computers. The firm is considered an original design manufacturer (ODM) and takes an active role in innovating and designing each new generation of components. By doing in-house design and development, the company has been able to foster exclusive, long-term relationships with its customers. The firm decides to diversify its portfolio to include consumer electronics with a particular focus on mobile technology. The goal is to move from manufacturing components for other computer companies to developing the firm's own line of branded consumer electronics. The new "netbook" market provides an opportunity for AIC Systems to design and manufacture a branded product in the mobile electronics industry. The production manager has created an assembly line for producing the new netbooks, and after three months of production he must consider ways to improve efficiency and reduce production costs. Students must perform a quantitative analysis of the existing assembly-line system and make recommendations to reach optimal efficiency.
Swot Analysis of "AIC Netbooks: Optimizing Product Assembly" written by Steven C. Wheelwright, Sunru Yong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Aic Netbooks facing as an external strategic factors. Some of the topics covered in AIC Netbooks: Optimizing Product Assembly case study are - Strategic Management Strategies, Assessing performance, Developing employees, Manufacturing, Risk management and Technology & Operations.
Some of the macro environment factors that can be used to understand the AIC Netbooks: Optimizing Product Assembly casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of AIC Netbooks: Optimizing Product Assembly
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AIC Netbooks: Optimizing Product Assembly case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aic Netbooks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aic Netbooks 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 AIC Netbooks: Optimizing Product Assembly can be done for the following purposes –
1. Strategic planning using facts provided in AIC Netbooks: Optimizing Product Assembly case study
2. Improving business portfolio management of Aic Netbooks
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 Aic Netbooks
Strengths AIC Netbooks: Optimizing Product Assembly | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aic Netbooks in AIC Netbooks: Optimizing Product Assembly Harvard Business Review case study are -
Training and development
– Aic Netbooks has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AIC Netbooks: Optimizing Product Assembly 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.
Operational resilience
– The operational resilience strategy in the AIC Netbooks: Optimizing Product Assembly 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.
Learning organization
- Aic Netbooks 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 Aic Netbooks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AIC Netbooks: Optimizing Product Assembly Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Aic Netbooks is one of the leading recruiters in the industry. Managers in the AIC Netbooks: Optimizing Product Assembly are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Aic Netbooks 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Aic Netbooks digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aic Netbooks has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to lead change in Technology & Operations field
– Aic Netbooks 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 Aic Netbooks in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Aic Netbooks in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Aic Netbooks 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 Steven C. Wheelwright, Sunru Yong 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.
Effective Research and Development (R&D)
– Aic Netbooks 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 AIC Netbooks: Optimizing Product Assembly - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Aic Netbooks 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 AIC Netbooks: Optimizing Product Assembly HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– AIC Netbooks: Optimizing Product Assembly firm has clearly differentiated products in the market place. This has enabled Aic Netbooks to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Aic Netbooks to invest into research and development (R&D) and innovation.
Weaknesses AIC Netbooks: Optimizing Product Assembly | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AIC Netbooks: Optimizing Product Assembly are -
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 Aic Netbooks supply chain. Even after few cautionary changes mentioned in the HBR case study - AIC Netbooks: Optimizing Product Assembly, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aic Netbooks vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Aic Netbooks 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.
Interest costs
– Compare to the competition, Aic Netbooks 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AIC Netbooks: Optimizing Product Assembly, it seems that the employees of Aic Netbooks 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the AIC Netbooks: Optimizing Product Assembly 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 Aic Netbooks has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study AIC Netbooks: Optimizing Product Assembly 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 Aic Netbooks 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study AIC Netbooks: Optimizing Product Assembly, in the dynamic environment Aic Netbooks has struggled to respond to the nimble upstart competition. Aic Netbooks has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study AIC Netbooks: Optimizing Product Assembly 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 AIC Netbooks: Optimizing Product Assembly can leverage the sales team experience to cultivate customer relationships as Aic Netbooks is planning to shift buying processes online.
High cash cycle compare to competitors
Aic Netbooks 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.
No frontier risks strategy
– After analyzing the HBR case study AIC Netbooks: Optimizing Product Assembly, 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.
Low market penetration in new markets
– Outside its home market of Aic Netbooks, firm in the HBR case study AIC Netbooks: Optimizing Product Assembly needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities AIC Netbooks: Optimizing Product Assembly | 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 AIC Netbooks: Optimizing Product Assembly are -
Learning at scale
– Online learning technologies has now opened space for Aic Netbooks 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.
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 Aic Netbooks in the consumer business. Now Aic Netbooks can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Aic Netbooks 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.
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 Aic Netbooks 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aic Netbooks 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, AIC Netbooks: Optimizing Product Assembly, 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
– Aic Netbooks 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.
Using analytics as competitive advantage
– Aic Netbooks 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 AIC Netbooks: Optimizing Product Assembly - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aic Netbooks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Aic Netbooks is facing challenges because of the dominance of functional experts in the organization. AIC Netbooks: Optimizing Product Assembly 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 Aic Netbooks has opened avenues for new revenue streams for the organization in the industry. This can help Aic Netbooks to build a more holistic ecosystem as suggested in the AIC Netbooks: Optimizing Product Assembly case study. Aic Netbooks can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Aic Netbooks can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AIC Netbooks: Optimizing Product Assembly 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aic Netbooks 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.
Better consumer reach
– The expansion of the 5G network will help Aic Netbooks to increase its market reach. Aic Netbooks 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.
Manufacturing automation
– Aic Netbooks can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Threats AIC Netbooks: Optimizing Product Assembly External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AIC Netbooks: Optimizing Product Assembly are -
Regulatory challenges
– Aic Netbooks 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 Aic Netbooks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Aic Netbooks needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Aic Netbooks.
Environmental challenges
– Aic Netbooks 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. Aic Netbooks can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology acceleration in Forth Industrial Revolution
– Aic Netbooks has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Aic Netbooks 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AIC Netbooks: Optimizing Product Assembly, Aic Netbooks 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 .
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 Aic Netbooks business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aic Netbooks 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 AIC Netbooks: Optimizing Product Assembly .
High dependence on third party suppliers
– Aic Netbooks high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Aic Netbooks 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.
Shortening product life cycle
– it is one of the major threat that Aic Netbooks is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of AIC Netbooks: Optimizing Product Assembly 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 AIC Netbooks: Optimizing Product Assembly 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 AIC Netbooks: Optimizing Product Assembly 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 AIC Netbooks: Optimizing Product Assembly 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 AIC Netbooks: Optimizing Product Assembly 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 Aic Netbooks needs to make to build a sustainable competitive advantage.