Case Study Description of Global Semiconductor Industry--1987
In 1987, the global semiconductor industry was coming out of the deepest recession in its 40 year history. The note examines the competitive dynamics of this industry over time, the nature of its technology, and the sources of competitive advantage. The role of buyer power and competitive interaction are explored in some depth.
Swot Analysis of "Global Semiconductor Industry--1987" written by David B. Yoffie, Alvin G. Wint includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Semiconductor 1987 facing as an external strategic factors. Some of the topics covered in Global Semiconductor Industry--1987 case study are - Strategic Management Strategies, Competitive strategy, Crisis management, Customers, Globalization, Recession, Technology and Global Business.
Some of the macro environment factors that can be used to understand the Global Semiconductor Industry--1987 casestudy better are - – increasing commodity prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, there is backlash against globalization, etc
Introduction to SWOT Analysis of Global Semiconductor Industry--1987
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Global Semiconductor Industry--1987 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Semiconductor 1987, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Semiconductor 1987 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 Global Semiconductor Industry--1987 can be done for the following purposes –
1. Strategic planning using facts provided in Global Semiconductor Industry--1987 case study
2. Improving business portfolio management of Semiconductor 1987
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Semiconductor 1987
Strengths Global Semiconductor Industry--1987 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Semiconductor 1987 in Global Semiconductor Industry--1987 Harvard Business Review case study are -
Effective Research and Development (R&D)
– Semiconductor 1987 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 Global Semiconductor Industry--1987 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Semiconductor 1987 in the sector have low bargaining power. Global Semiconductor Industry--1987 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Semiconductor 1987 to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Semiconductor 1987 is present in almost all the verticals within the industry. This has provided firm in Global Semiconductor Industry--1987 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.
Cross disciplinary teams
– Horizontal connected teams at the Semiconductor 1987 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.
Training and development
– Semiconductor 1987 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Global Semiconductor Industry--1987 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.
Successful track record of launching new products
– Semiconductor 1987 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Semiconductor 1987 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.
Innovation driven organization
– Semiconductor 1987 is one of the most innovative firm in sector. Manager in Global Semiconductor Industry--1987 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Semiconductor 1987 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 Global Semiconductor Industry--1987 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Semiconductor 1987 is one of the leading recruiters in the industry. Managers in the Global Semiconductor Industry--1987 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 1987 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Semiconductor 1987 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Semiconductor 1987 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Global Business industry
– Global Semiconductor Industry--1987 firm has clearly differentiated products in the market place. This has enabled Semiconductor 1987 to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Semiconductor 1987 to invest into research and development (R&D) and innovation.
Weaknesses Global Semiconductor Industry--1987 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Global Semiconductor Industry--1987 are -
No frontier risks strategy
– After analyzing the HBR case study Global Semiconductor Industry--1987, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow decision making process
– As mentioned earlier in the report, Semiconductor 1987 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. Semiconductor 1987 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.
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 1987 supply chain. Even after few cautionary changes mentioned in the HBR case study - Global Semiconductor Industry--1987, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Semiconductor 1987 vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Semiconductor 1987 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.
Low market penetration in new markets
– Outside its home market of Semiconductor 1987, firm in the HBR case study Global Semiconductor Industry--1987 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Semiconductor 1987 is dominated by functional specialists. It is not different from other players in the Global Business segment. Semiconductor 1987 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Semiconductor 1987 to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Semiconductor 1987 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Global Semiconductor Industry--1987 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Global Semiconductor Industry--1987, it seems that the employees of Semiconductor 1987 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 Global Semiconductor Industry--1987 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 Semiconductor 1987 has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Global Semiconductor Industry--1987 HBR case study mentions - Semiconductor 1987 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.
Capital Spending Reduction
– Even during the low interest decade, Semiconductor 1987 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.
Opportunities Global Semiconductor Industry--1987 | 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 Global Semiconductor Industry--1987 are -
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 1987 can use these opportunities to build new business models that can help the communities that Semiconductor 1987 operates in. Secondly it can use opportunities from government spending in Global Business sector.
Developing new processes and practices
– Semiconductor 1987 can develop new processes and procedures in Global Business 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
– Semiconductor 1987 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 Global Semiconductor Industry--1987 - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Semiconductor 1987 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Semiconductor 1987 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.
Manufacturing automation
– Semiconductor 1987 can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Semiconductor 1987 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. Semiconductor 1987 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Semiconductor 1987 is facing challenges because of the dominance of functional experts in the organization. Global Semiconductor Industry--1987 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Semiconductor 1987 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Semiconductor 1987 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, Global Semiconductor Industry--1987, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Semiconductor 1987 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Global Semiconductor Industry--1987 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Semiconductor 1987 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 1987 to hire the very best people irrespective of their geographical location.
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 1987 in the consumer business. Now Semiconductor 1987 can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Semiconductor 1987 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.
Threats Global Semiconductor Industry--1987 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Global Semiconductor Industry--1987 are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Semiconductor 1987 in the Global Business industry. The Global Business 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.
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 1987 business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Semiconductor 1987 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.
Regulatory challenges
– Semiconductor 1987 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 Global Business industry regulations.
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 1987.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Semiconductor 1987 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Semiconductor 1987 is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 dependence on third party suppliers
– Semiconductor 1987 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.
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.
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 1987 needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of Semiconductor 1987
– 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 1987.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Semiconductor 1987 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 Global Semiconductor Industry--1987 .
Weighted SWOT Analysis of Global Semiconductor Industry--1987 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 Global Semiconductor Industry--1987 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 Global Semiconductor Industry--1987 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 Global Semiconductor Industry--1987 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 Global Semiconductor Industry--1987 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 1987 needs to make to build a sustainable competitive advantage.
