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 transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Ability to lead change in Leadership & Managing People field
– Dresden Amd's 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 Dresden Amd's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Analytics focus
– Dresden Amd's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Willy Shih can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Dresden Amd's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dresden Amd's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Successful track record of launching new products
– Dresden Amd's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dresden Amd's 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.
Operational resilience
– The operational resilience strategy in the AMD Dresden: Copy Inexactly! 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.
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.
Ability to recruit top talent
– Dresden Amd's is one of the leading recruiters in the industry. Managers in the AMD Dresden: Copy Inexactly! are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Dresden Amd'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.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AMD Dresden: Copy Inexactly! 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 Dresden Amd's has relatively successful track record of launching new products.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Dresden Amd'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. Dresden Amd'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.
High bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih suggests that, Dresden Amd's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study AMD Dresden: Copy Inexactly! has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dresden Amd's 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Dresden Amd's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High 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 Dresden Amd's supply chain. Even after few cautionary changes mentioned in the HBR case study - AMD Dresden: Copy Inexactly!, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dresden Amd's vulnerable to further global disruptions in South East Asia.
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.
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 -
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.
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.
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 Dresden Amd'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.
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.
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.
Using analytics as competitive advantage
– Dresden Amd's 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 AMD Dresden: Copy Inexactly! - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dresden Amd's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Dresden Amd's to increase its market reach. Dresden Amd'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.
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.
Buying journey improvements
– Dresden Amd's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AMD Dresden: Copy Inexactly! 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.
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.
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 -
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.
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.
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.
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 .
Technology acceleration in Forth Industrial Revolution
– Dresden Amd's has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Dresden Amd's needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dresden Amd's in the Leadership & Managing People industry. The Leadership & Managing People 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dresden Amd's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
High dependence on third party suppliers
– Dresden Amd'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.
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.
