Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A)
While much of the work on outsourcing to China focuses on the low cost and its tradeoffs, this case examines in depth the interaction between human capital and a firm's cost and capabilities. Suitable for the MBA, EMBA, GEMBA, and executive education programs, the case presents a manufacturer of semiconductor assembly equipment looking to achieve growth in its wire bonding tools segment-in particular, capillaries and dicing saw blades-through geographic expansion. At the time, it manufactured capillaries in Yokneam, Israel, and blades in Santa Clara, California. In the A case the team is charged with designing and opening a new facility in Suzhou, China. Expanding operations to China meant cost savings, and it was where K&S's market had expanded. But it wasn't clear whether it made sense to move the capillary process, the dicing blade manufacturing, or both. And if K&S did move to China, should it keep the Israeli- and American-based factories open as well? And once those decisions were made, what exactly would the knowledge transfer look like?
Authors :: Gerry Yemen, Gal Raz, Martin N. Davidson
Swot Analysis of "Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A)" written by Gerry Yemen, Gal Raz, Martin N. Davidson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Capillaries Dicing facing as an external strategic factors. Some of the topics covered in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) case study are - Strategic Management Strategies, Knowledge management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) casestudy better are - – increasing energy prices, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
supply chains are disrupted by pandemic , increasing commodity prices, etc
Introduction to SWOT Analysis of Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Capillaries Dicing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Capillaries Dicing 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) can be done for the following purposes –
1. Strategic planning using facts provided in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) case study
2. Improving business portfolio management of Capillaries Dicing
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 Capillaries Dicing
Strengths Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Capillaries Dicing in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) Harvard Business Review case study are -
Effective Research and Development (R&D)
– Capillaries Dicing 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Technology & Operations industry
– Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) firm has clearly differentiated products in the market place. This has enabled Capillaries Dicing to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Capillaries Dicing to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Capillaries Dicing 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 Capillaries Dicing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Capillaries Dicing in the sector have low bargaining power. Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Capillaries Dicing to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Capillaries Dicing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Capillaries Dicing 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.
High brand equity
– Capillaries Dicing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Capillaries Dicing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Capillaries Dicing 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.
Diverse revenue streams
– Capillaries Dicing is present in almost all the verticals within the industry. This has provided firm in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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.
Organizational Resilience of Capillaries Dicing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Capillaries Dicing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Capillaries Dicing 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 Capillaries Dicing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Capillaries Dicing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Capillaries Dicing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) can leverage the sales team experience to cultivate customer relationships as Capillaries Dicing is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Capillaries Dicing 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.
No frontier risks strategy
– After analyzing the HBR case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A), 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.
Need for greater diversity
– Capillaries Dicing 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.
Slow decision making process
– As mentioned earlier in the report, Capillaries Dicing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Capillaries Dicing even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Workers concerns about automation
– As automation is fast increasing in the segment, Capillaries Dicing 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Capillaries Dicing 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A), in the dynamic environment Capillaries Dicing has struggled to respond to the nimble upstart competition. Capillaries Dicing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Capillaries Dicing has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) HBR case study mentions - Capillaries Dicing 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.
Opportunities Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) | 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) are -
Using analytics as competitive advantage
– Capillaries Dicing 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Capillaries Dicing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Capillaries Dicing in the consumer business. Now Capillaries Dicing can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Capillaries Dicing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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.
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 Capillaries Dicing 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.
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. Capillaries Dicing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Capillaries Dicing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Capillaries Dicing 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.
Leveraging digital technologies
– Capillaries Dicing 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, Capillaries Dicing 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, Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Capillaries Dicing 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. Capillaries Dicing 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.
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. Capillaries Dicing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Capillaries Dicing 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 Capillaries Dicing to increase its market reach. Capillaries Dicing will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) are -
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. Capillaries Dicing 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.
Environmental challenges
– Capillaries Dicing 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. Capillaries Dicing can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Capillaries Dicing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Capillaries Dicing 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.
High dependence on third party suppliers
– Capillaries Dicing 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.
Technology acceleration in Forth Industrial Revolution
– Capillaries Dicing has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Capillaries Dicing 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.
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. Capillaries Dicing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Capillaries Dicing business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A), Capillaries Dicing 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 .
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. Capillaries Dicing needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Capillaries Dicing 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.
Increasing wage structure of Capillaries Dicing
– 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 Capillaries Dicing.
Shortening product life cycle
– it is one of the major threat that Capillaries Dicing 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Kulicke and Soffa Industries Inc. in China: Transferring Knowledge (A) 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 Capillaries Dicing needs to make to build a sustainable competitive advantage.
