Renesas Electronics and the Automotive Microcontroller Supply Chain (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Renesas Electronics and the Automotive Microcontroller Supply Chain (A)
To maximize their effectiveness, color cases should be printed in color.The magnitude 9.0 earthquake that struck Japan in March, 2011 caused extensive damage to Renesas Electronics wafer fabrication facility, a critical link in the global automotive supply chain. Many OEMs sole-sourced customized microprocessors from the fab so its shutdown forced the "Big Three" of Detroit and Japan to shutdown production as well. Data from two automotive customers in particular, allowing the instructor to look at issues of delayed differentiation, sole-sourcing decisions, and/or Renesas' market position as a producer of low-volume customized components, in the context of supply chain disaster recovery. The two OEM's had different strategies with respect to cross-utilization of components between product lines. Therefore, a simple numerical assignment will show students the power of delayed differentiation in components. The OEM with higher cross-utilization (lower customization of components between product lines) had more flexibility in which vehicles they stopped producing during the shortage. Similarly, students can look at the impact of delayed differentiation at the product level by looking at the production process within the fab itself. Here Renesas's customization causes early differentiation. Again numbers are provided to work examples. Finally, broader questions around the viability of Renesas's market position can be discussed. How should they respond to the disaster in the short term? How can they assure customers they can handle future disruptions differently? And from the OEMs' perspective, do they need to change their product design to allow for the incorporation of alternative parts? Such parts have downsides of their own. The findings in the two numerical examples can be used to drive this discussion, or a general strategy framework may be applied.
Swot Analysis of "Renesas Electronics and the Automotive Microcontroller Supply Chain (A)" written by Willy Shih, Margaret Pierson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Renesas Differentiation facing as an external strategic factors. Some of the topics covered in Renesas Electronics and the Automotive Microcontroller Supply Chain (A) case study are - Strategic Management Strategies, Risk management, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Renesas Electronics and the Automotive Microcontroller Supply Chain (A) casestudy better are - – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, wage bills are increasing, increasing commodity prices, technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, there is backlash against globalization, etc
Introduction to SWOT Analysis of Renesas Electronics and the Automotive Microcontroller Supply Chain (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Renesas Electronics and the Automotive Microcontroller Supply Chain (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Renesas Differentiation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Renesas Differentiation 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 Renesas Electronics and the Automotive Microcontroller Supply Chain (A) can be done for the following purposes –
1. Strategic planning using facts provided in Renesas Electronics and the Automotive Microcontroller Supply Chain (A) case study
2. Improving business portfolio management of Renesas Differentiation
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Renesas Differentiation
Strengths Renesas Electronics and the Automotive Microcontroller Supply Chain (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Renesas Differentiation in Renesas Electronics and the Automotive Microcontroller Supply Chain (A) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Renesas Differentiation in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Renesas Differentiation in the sector have low bargaining power. Renesas Electronics and the Automotive Microcontroller Supply Chain (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Renesas Differentiation to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Renesas Differentiation 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 Renesas Electronics and the Automotive Microcontroller Supply Chain (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Renesas Differentiation 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 lead change in Leadership & Managing People field
– Renesas Differentiation 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 Renesas Differentiation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Leadership & Managing People industry
– Renesas Electronics and the Automotive Microcontroller Supply Chain (A) firm has clearly differentiated products in the market place. This has enabled Renesas Differentiation to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Renesas Differentiation to invest into research and development (R&D) and innovation.
Training and development
– Renesas Differentiation has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Renesas Electronics and the Automotive Microcontroller Supply Chain (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.
Diverse revenue streams
– Renesas Differentiation is present in almost all the verticals within the industry. This has provided firm in Renesas Electronics and the Automotive Microcontroller Supply Chain (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.
Effective Research and Development (R&D)
– Renesas Differentiation 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 Renesas Electronics and the Automotive Microcontroller Supply Chain (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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Renesas Differentiation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Renesas Differentiation has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Renesas Differentiation is one of the most innovative firm in sector. Manager in Renesas Electronics and the Automotive Microcontroller Supply Chain (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Renesas Differentiation 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.
Weaknesses Renesas Electronics and the Automotive Microcontroller Supply Chain (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Renesas Electronics and the Automotive Microcontroller Supply Chain (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Renesas Differentiation is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Renesas Electronics and the Automotive Microcontroller Supply Chain (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.
Low market penetration in new markets
– Outside its home market of Renesas Differentiation, firm in the HBR case study Renesas Electronics and the Automotive Microcontroller Supply Chain (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (A) can leverage the sales team experience to cultivate customer relationships as Renesas Differentiation is planning to shift buying processes online.
Products dominated business model
– Even though Renesas Differentiation 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 - Renesas Electronics and the Automotive Microcontroller Supply Chain (A) should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Renesas Differentiation has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Renesas Electronics and the Automotive Microcontroller Supply Chain (A), it seems that the employees of Renesas Differentiation 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.
Capital Spending Reduction
– Even during the low interest decade, Renesas Differentiation 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Renesas Differentiation 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Renesas Electronics and the Automotive Microcontroller Supply Chain (A), in the dynamic environment Renesas Differentiation has struggled to respond to the nimble upstart competition. Renesas Differentiation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Renesas Differentiation is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Renesas Differentiation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Renesas Differentiation 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 Renesas Differentiation supply chain. Even after few cautionary changes mentioned in the HBR case study - Renesas Electronics and the Automotive Microcontroller Supply Chain (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Renesas Differentiation vulnerable to further global disruptions in South East Asia.
Opportunities Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (A) are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Renesas Differentiation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Buying journey improvements
– Renesas Differentiation can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Renesas Electronics and the Automotive Microcontroller Supply Chain (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.
Learning at scale
– Online learning technologies has now opened space for Renesas Differentiation 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.
Leveraging digital technologies
– Renesas Differentiation 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Renesas Differentiation 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.
Better consumer reach
– The expansion of the 5G network will help Renesas Differentiation to increase its market reach. Renesas Differentiation will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Renesas Differentiation can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Renesas Differentiation is facing challenges because of the dominance of functional experts in the organization. Renesas Electronics and the Automotive Microcontroller Supply Chain (A) 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.
Building a culture of innovation
– managers at Renesas Differentiation 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 Leadership & Managing People segment.
Creating value in data economy
– The success of analytics program of Renesas Differentiation has opened avenues for new revenue streams for the organization in the industry. This can help Renesas Differentiation to build a more holistic ecosystem as suggested in the Renesas Electronics and the Automotive Microcontroller Supply Chain (A) case study. Renesas Differentiation can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Renesas Differentiation 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 Renesas Electronics and the Automotive Microcontroller Supply Chain (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Renesas Differentiation 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 Renesas Differentiation in the consumer business. Now Renesas Differentiation can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Renesas Differentiation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Renesas Electronics and the Automotive Microcontroller Supply Chain (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Renesas Electronics and the Automotive Microcontroller Supply Chain (A) are -
Environmental challenges
– Renesas Differentiation 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. Renesas Differentiation can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Renesas Differentiation in the Leadership & Managing People sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Renesas Electronics and the Automotive Microcontroller Supply Chain (A), Renesas Differentiation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
High dependence on third party suppliers
– Renesas Differentiation 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
– Renesas Differentiation 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 Leadership & Managing People industry regulations.
Increasing wage structure of Renesas Differentiation
– 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 Renesas Differentiation.
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. Renesas Differentiation 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.
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.
Consumer confidence and its impact on Renesas Differentiation 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 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. Renesas Differentiation needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Renesas Differentiation.
Stagnating economy with rate increase
– Renesas Differentiation 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Renesas Differentiation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Electronics and the Automotive Microcontroller Supply Chain (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 Renesas Differentiation needs to make to build a sustainable competitive advantage.