Cypress Semiconductor: A Federation of Entrepreneurs SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Cypress Semiconductor: A Federation of Entrepreneurs
In 2011, Cypress Semiconductor was doing well. Their 2010 revenues had grown 32 percent to $884 million, and coupled with diligent cost reduction efforts, their profits before taxes were up nearly 23 percent. In the preceding two years Cypress had eliminated its debt and built up a large cash position. But the semiconductor business was a brutal one demanding both continual cost reductions and innovation. Cypress was a comparatively small player, competing with firms like Samsung that was more than 40 times its size. Cypress founder and CEO, T.J. Rodgers reflected on the challenge of fighting large competitors in a tough environment by saying, "It's all about execution because if you haven't done what you said you were going to do it doesn't matter if you have a good plan or not." In Rodgers' view this meant that to be successful Cypress had to continue to be relentless in driving out costs and be able to generate a stream of new innovations. His solution was to manage Cypress as "a federation of entrepreneurs." This case details the history of the firm and its philosophy and practices that it uses to encourage innovation within its organization. The case gives a comprehensive account of Cypress's approach, people management including hiring and compensation procedures, and information systems. The focus is on Cypress's strategy and practices to stimulate innovation and launch successful new ventures.
Swot Analysis of "Cypress Semiconductor: A Federation of Entrepreneurs" written by David Caldwell, Charles A. O'Reilly includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cypress Cypress's facing as an external strategic factors. Some of the topics covered in Cypress Semiconductor: A Federation of Entrepreneurs case study are - Strategic Management Strategies, Entrepreneurship, Human resource management, Innovation, Motivating people, Organizational culture, Organizational structure, Strategic planning and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Cypress Semiconductor: A Federation of Entrepreneurs casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Cypress Semiconductor: A Federation of Entrepreneurs
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cypress Semiconductor: A Federation of Entrepreneurs case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cypress Cypress's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cypress Cypress's 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 Cypress Semiconductor: A Federation of Entrepreneurs can be done for the following purposes –
1. Strategic planning using facts provided in Cypress Semiconductor: A Federation of Entrepreneurs case study
2. Improving business portfolio management of Cypress Cypress's
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cypress Cypress's
Strengths Cypress Semiconductor: A Federation of Entrepreneurs | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cypress Cypress's in Cypress Semiconductor: A Federation of Entrepreneurs Harvard Business Review case study are -
Ability to recruit top talent
– Cypress Cypress's is one of the leading recruiters in the industry. Managers in the Cypress Semiconductor: A Federation of Entrepreneurs are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Cypress Semiconductor: A Federation of Entrepreneurs 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.
Cross disciplinary teams
– Horizontal connected teams at the Cypress Cypress's 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.
Superior customer experience
– The customer experience strategy of Cypress Cypress's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Cypress Cypress's 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 Cypress Cypress's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cypress Semiconductor: A Federation of Entrepreneurs Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Cypress Semiconductor: A Federation of Entrepreneurs firm has clearly differentiated products in the market place. This has enabled Cypress Cypress's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Cypress Cypress's to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Cypress Cypress's 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.
Strong track record of project management
– Cypress Cypress's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Cypress Cypress's in the sector have low bargaining power. Cypress Semiconductor: A Federation of Entrepreneurs has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cypress Cypress's to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Cypress Cypress's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cypress Semiconductor: A Federation of Entrepreneurs 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.
Effective Research and Development (R&D)
– Cypress Cypress's 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 Cypress Semiconductor: A Federation of Entrepreneurs - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cypress Cypress's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cypress Cypress's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Cypress Semiconductor: A Federation of Entrepreneurs | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cypress Semiconductor: A Federation of Entrepreneurs are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cypress Semiconductor: A Federation of Entrepreneurs, is just above the industry average. Cypress Cypress's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cypress Semiconductor: A Federation of Entrepreneurs, in the dynamic environment Cypress Cypress's has struggled to respond to the nimble upstart competition. Cypress Cypress's 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 Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Semiconductor: A Federation of Entrepreneurs can leverage the sales team experience to cultivate customer relationships as Cypress Cypress's is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Cypress Cypress's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Cypress Cypress's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cypress Cypress's to focus more on services rather than just following the product oriented approach.
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 Cypress Cypress's supply chain. Even after few cautionary changes mentioned in the HBR case study - Cypress Semiconductor: A Federation of Entrepreneurs, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cypress Cypress's vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Cypress Cypress's 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.
Low market penetration in new markets
– Outside its home market of Cypress Cypress's, firm in the HBR case study Cypress Semiconductor: A Federation of Entrepreneurs needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Cypress Semiconductor: A Federation of Entrepreneurs, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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, Cypress Cypress's 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. Cypress Cypress's 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.
Slow to strategic competitive environment developments
– As Cypress Semiconductor: A Federation of Entrepreneurs HBR case study mentions - Cypress Cypress's 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.
Products dominated business model
– Even though Cypress Cypress's 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 - Cypress Semiconductor: A Federation of Entrepreneurs should strive to include more intangible value offerings along with its core products and services.
Opportunities Cypress Semiconductor: A Federation of Entrepreneurs | 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 Cypress Semiconductor: A Federation of Entrepreneurs are -
Building a culture of innovation
– managers at Cypress Cypress's 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 Innovation & Entrepreneurship segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cypress Cypress's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Cypress Cypress's 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.
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 Cypress Cypress's 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.
Loyalty marketing
– Cypress Cypress's 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.
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. Cypress Cypress's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Cypress Cypress's to increase its market reach. Cypress Cypress's 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Cypress Cypress's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cypress Cypress's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cypress Cypress's 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 Cypress Cypress's to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Cypress Cypress's 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, Cypress Cypress's 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, Cypress Semiconductor: A Federation of Entrepreneurs, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Cypress Cypress's has opened avenues for new revenue streams for the organization in the industry. This can help Cypress Cypress's to build a more holistic ecosystem as suggested in the Cypress Semiconductor: A Federation of Entrepreneurs case study. Cypress Cypress's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Cypress Semiconductor: A Federation of Entrepreneurs External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cypress Semiconductor: A Federation of Entrepreneurs are -
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
– Cypress Cypress's 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.
Regulatory challenges
– Cypress Cypress's 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 Innovation & Entrepreneurship industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cypress Semiconductor: A Federation of Entrepreneurs, Cypress Cypress's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Shortening product life cycle
– it is one of the major threat that Cypress Cypress's is facing in Innovation & Entrepreneurship 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, Cypress Cypress's 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 Cypress Semiconductor: A Federation of Entrepreneurs .
Consumer confidence and its impact on Cypress Cypress's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cypress Cypress's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cypress Cypress's in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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 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. Cypress Cypress's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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. Cypress Cypress's 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.
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 Cypress Cypress's.
Weighted SWOT Analysis of Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Semiconductor: A Federation of Entrepreneurs 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 Cypress Cypress's needs to make to build a sustainable competitive advantage.
