Case Study Description of AMD Dresden: Copy Inexactly!
To maximize their effectiveness, color cases should be printed in color.The establishment and growth of AMD's Dresden, Germany manufacturing site illustrates how processes develop in an organization, and how those processes get institutionalized into a unique culture. Located in the Free State of Saxony in the eastern part of Germany (the former GDR), AMD's investment in the region leverages a historic and rather unique skill base in engineering and the sciences, and catalyzes the rebirth and growth of one of the largest semiconductor clusters in Europe. Contrary to conventional wisdom in the semiconductor industry, the Dresden team only copied from its home corporate locations in the United States those processes and practices that it felt would work in Germany rather than follow a copy exactly strategy. Dresden becomes AMD's sole worldwide manufacturing location for microprocessors, but now the company is faced with the question of whether it can successfully transplant the highly successful culture to other global locations because of favorable investment incentives.
Swot Analysis of "AMD Dresden: Copy Inexactly!" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dresden Amd's facing as an external strategic factors. Some of the topics covered in AMD Dresden: Copy Inexactly! case study are - Strategic Management Strategies, Cross-cultural management, Growth strategy, Organizational culture, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the AMD Dresden: Copy Inexactly! casestudy better are - – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing commodity prices, there is increasing trade war between United States & China,
there is backlash against globalization, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of AMD Dresden: Copy Inexactly!
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AMD Dresden: Copy Inexactly! case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dresden Amd's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dresden Amd'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 AMD Dresden: Copy Inexactly! can be done for the following purposes –
1. Strategic planning using facts provided in AMD Dresden: Copy Inexactly! case study
2. Improving business portfolio management of Dresden Amd's
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 Dresden Amd's
Strengths AMD Dresden: Copy Inexactly! | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dresden Amd's in AMD Dresden: Copy Inexactly! Harvard Business Review case study are -
Effective Research and Development (R&D)
– Dresden Amd'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 AMD Dresden: Copy Inexactly! - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Dresden Amd's is one of the most innovative firm in sector. Manager in AMD Dresden: Copy Inexactly! Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Dresden Amd's in the sector have low bargaining power. AMD Dresden: Copy Inexactly! has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dresden Amd's to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Dresden Amd's is present in almost all the verticals within the industry. This has provided firm in AMD Dresden: Copy Inexactly! 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.
Learning organization
- Dresden Amd'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 Dresden Amd's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in AMD Dresden: Copy Inexactly! Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Dresden Amd'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.
High brand equity
– Dresden Amd's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dresden Amd's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Dresden Amd'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.
Training and development
– Dresden Amd's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AMD Dresden: Copy Inexactly! 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Dresden Amd's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dresden Amd's 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.
Superior customer experience
– The customer experience strategy of Dresden Amd's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Dresden Amd's 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 AMD Dresden: Copy Inexactly! HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses AMD Dresden: Copy Inexactly! | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AMD Dresden: Copy Inexactly! are -
No frontier risks strategy
– After analyzing the HBR case study AMD Dresden: Copy Inexactly!, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
High cash cycle compare to competitors
Dresden Amd's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Dresden Amd's, firm in the HBR case study AMD Dresden: Copy Inexactly! needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Dresden Amd's products
– To increase the profitability and margins on the products, Dresden Amd's needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Dresden Amd's 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.
Need for greater diversity
– Dresden Amd's 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.
Interest costs
– Compare to the competition, Dresden Amd'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.
Increasing silos among functional specialists
– The organizational structure of Dresden Amd's is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Dresden Amd's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dresden Amd's to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study AMD Dresden: Copy Inexactly!, it seems that the employees of Dresden Amd's 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.
Products dominated business model
– Even though Dresden Amd'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 - AMD Dresden: Copy Inexactly! should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dresden Amd's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study AMD Dresden: Copy Inexactly! can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities AMD Dresden: Copy Inexactly! | 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 AMD Dresden: Copy Inexactly! are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dresden Amd's 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. Dresden Amd's 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, Dresden Amd's is facing challenges because of the dominance of functional experts in the organization. AMD Dresden: Copy Inexactly! 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.
Manufacturing automation
– Dresden Amd's 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.
Building a culture of innovation
– managers at Dresden Amd'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 Leadership & Managing People segment.
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. Dresden Amd's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dresden Amd'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, AMD Dresden: Copy Inexactly!, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dresden Amd'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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dresden Amd's can use these opportunities to build new business models that can help the communities that Dresden Amd's operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Dresden Amd'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.
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 Dresden Amd's in the consumer business. Now Dresden Amd's can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Dresden Amd'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.
Creating value in data economy
– The success of analytics program of Dresden Amd's has opened avenues for new revenue streams for the organization in the industry. This can help Dresden Amd's to build a more holistic ecosystem as suggested in the AMD Dresden: Copy Inexactly! case study. Dresden Amd's can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Dresden Amd's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats AMD Dresden: Copy Inexactly! External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AMD Dresden: Copy Inexactly! 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. Dresden Amd'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.
Consumer confidence and its impact on Dresden Amd'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.
Regulatory challenges
– Dresden Amd'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 Leadership & Managing People industry regulations.
Shortening product life cycle
– it is one of the major threat that Dresden Amd's is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Dresden Amd's 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.
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. Dresden Amd's needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Dresden Amd's business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Dresden Amd's
– 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 Dresden Amd's.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AMD Dresden: Copy Inexactly!, Dresden Amd'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 Leadership & Managing People .
Environmental challenges
– Dresden Amd's 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. Dresden Amd's can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dresden Amd'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 AMD Dresden: Copy Inexactly! .
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 Dresden Amd's in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Dresden Amd's.
Weighted SWOT Analysis of AMD Dresden: Copy Inexactly! 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 AMD Dresden: Copy Inexactly! 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 AMD Dresden: Copy Inexactly! 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 AMD Dresden: Copy Inexactly! 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 AMD Dresden: Copy Inexactly! 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 Dresden Amd's needs to make to build a sustainable competitive advantage.