The vice president and general manager of Mitel's semiconductor division is faced with a rapidly growing market for the company's business communication chips, but has limited capacity at the semiconductor plant. There is little industry capacity to outsource production. He must determine how to pursue the growing market and how to secure additional capacity. Options include modifications to the current facility, construction of a new facility, or the acquisition of a plant from another company.
Authors :: Mark Vandenbosch, David Large, Gavin Liddy
Swot Analysis of "Mitel Semiconductor" written by Mark Vandenbosch, David Large, Gavin Liddy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Semiconductor Capacity facing as an external strategic factors. Some of the topics covered in Mitel Semiconductor case study are - Strategic Management Strategies, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Mitel Semiconductor casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Mitel Semiconductor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mitel Semiconductor case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Semiconductor Capacity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Semiconductor Capacity 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 Mitel Semiconductor can be done for the following purposes –
1. Strategic planning using facts provided in Mitel Semiconductor case study
2. Improving business portfolio management of Semiconductor Capacity
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 Semiconductor Capacity
Strengths Mitel Semiconductor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Semiconductor Capacity in Mitel Semiconductor Harvard Business Review case study are -
Successful track record of launching new products
– Semiconductor Capacity has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Semiconductor Capacity 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
– Semiconductor Capacity 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 Mark Vandenbosch, David Large, Gavin Liddy 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.
Sustainable margins compare to other players in Technology & Operations industry
– Mitel Semiconductor firm has clearly differentiated products in the market place. This has enabled Semiconductor Capacity to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Semiconductor Capacity to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Mitel Semiconductor 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.
Strong track record of project management
– Semiconductor Capacity 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 recruit top talent
– Semiconductor Capacity is one of the leading recruiters in the industry. Managers in the Mitel Semiconductor are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Semiconductor Capacity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Semiconductor Capacity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Semiconductor Capacity in the sector have low bargaining power. Mitel Semiconductor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Semiconductor Capacity to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Semiconductor Capacity 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.
Organizational Resilience of Semiconductor Capacity
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Semiconductor Capacity does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Semiconductor Capacity 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.
Training and development
– Semiconductor Capacity has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mitel Semiconductor 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 Mitel Semiconductor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mitel Semiconductor are -
Lack of clear differentiation of Semiconductor Capacity products
– To increase the profitability and margins on the products, Semiconductor Capacity needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Semiconductor Capacity supply chain. Even after few cautionary changes mentioned in the HBR case study - Mitel Semiconductor, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Semiconductor Capacity vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark Vandenbosch, David Large, Gavin Liddy suggests that, Semiconductor Capacity 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Semiconductor Capacity needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Semiconductor Capacity 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.
Products dominated business model
– Even though Semiconductor Capacity 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 - Mitel Semiconductor should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Mitel Semiconductor 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 Mitel Semiconductor can leverage the sales team experience to cultivate customer relationships as Semiconductor Capacity is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mitel Semiconductor, in the dynamic environment Semiconductor Capacity has struggled to respond to the nimble upstart competition. Semiconductor Capacity has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Mitel Semiconductor 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 Semiconductor Capacity 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Semiconductor Capacity is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mitel Semiconductor can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Semiconductor Capacity 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 Mitel Semiconductor | 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 Mitel Semiconductor are -
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. Semiconductor Capacity can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Semiconductor Capacity can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Semiconductor Capacity can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mitel Semiconductor 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, Semiconductor Capacity 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.
Loyalty marketing
– Semiconductor Capacity 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.
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 Semiconductor Capacity in the consumer business. Now Semiconductor Capacity can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Semiconductor Capacity 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 Mitel Semiconductor - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Semiconductor Capacity to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Semiconductor Capacity 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 Semiconductor Capacity to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Semiconductor Capacity can use these opportunities to build new business models that can help the communities that Semiconductor Capacity operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Semiconductor Capacity 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.
Building a culture of innovation
– managers at Semiconductor Capacity 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.
Creating value in data economy
– The success of analytics program of Semiconductor Capacity has opened avenues for new revenue streams for the organization in the industry. This can help Semiconductor Capacity to build a more holistic ecosystem as suggested in the Mitel Semiconductor case study. Semiconductor Capacity can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Semiconductor Capacity 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, Mitel Semiconductor, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Mitel Semiconductor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mitel Semiconductor 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. Semiconductor Capacity needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Semiconductor Capacity has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Semiconductor Capacity 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.
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 Semiconductor Capacity.
Increasing wage structure of Semiconductor Capacity
– 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 Semiconductor Capacity.
Shortening product life cycle
– it is one of the major threat that Semiconductor Capacity is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Semiconductor Capacity 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 Mitel Semiconductor .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Semiconductor Capacity 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.
High dependence on third party suppliers
– Semiconductor Capacity 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Semiconductor Capacity 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
– Semiconductor Capacity 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. Semiconductor Capacity can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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 Semiconductor Capacity in the Technology & Operations sector and impact the bottomline of the organization.
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 Semiconductor Capacity business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Mitel Semiconductor 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 Mitel Semiconductor 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 Mitel Semiconductor 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 Mitel Semiconductor 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 Mitel Semiconductor 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 Semiconductor Capacity needs to make to build a sustainable competitive advantage.
