MIC Electronics Ltd (MELC) SWOT Analysis / TOWS Matrix / MBA Resources
Semiconductors
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for MIC Electronics Ltd (India)
Based on various researches at Oak Spring University , MIC Electronics Ltd is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of MIC Electronics Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MIC Electronics Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MIC Electronics Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MIC Electronics Ltd 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 MIC Electronics Ltd can be done for the following purposes –
1. Strategic planning of MIC Electronics Ltd
2. Improving business portfolio management of MIC Electronics Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MIC Electronics Ltd
Strengths of MIC Electronics Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MIC Electronics Ltd are -
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For MIC Electronics Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MIC Electronics Ltd 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.
Highly skilled collaborators
– MIC Electronics Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Semiconductors industry. Secondly the value chain collaborators of MIC Electronics Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of MIC Electronics Ltd in the Technology sector have low bargaining power. MIC Electronics Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MIC Electronics Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of MIC Electronics Ltd in Semiconductors industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the MIC Electronics Ltd 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.
Analytics focus
– MIC Electronics Ltd 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 Semiconductors industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Semiconductors industry
– MIC Electronics Ltd has clearly differentiated products in the market place. This has enabled MIC Electronics Ltd to fetch slight price premium compare to the competitors in the Semiconductors industry. The sustainable margins have also helped MIC Electronics Ltd to invest into research and development (R&D) and innovation.
Innovation driven organization
– MIC Electronics Ltd is one of the most innovative firm in Semiconductors sector.
Strong track record of project management in the Semiconductors industry
– MIC Electronics Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of MIC Electronics Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing MIC Electronics Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that MIC Electronics Ltd 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.
Diverse revenue streams
– MIC Electronics Ltd is present in almost all the verticals within the Semiconductors industry. This has provided MIC Electronics Ltd 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.
Weaknesses of MIC Electronics Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MIC Electronics Ltd are -
Need for greater diversity
– MIC Electronics Ltd 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.
Lack of clear differentiation of MIC Electronics Ltd products
– To increase the profitability and margins on the products, MIC Electronics Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of MIC Electronics Ltd is just above the Semiconductors industry average. It 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.
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 MIC Electronics Ltd supply chain. Even after few cautionary changes, MIC Electronics Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left MIC Electronics Ltd vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, MIC Electronics Ltd 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 Semiconductors industry using digital technology.
High operating costs
– Compare to the competitors, MIC Electronics Ltd has high operating costs in the Semiconductors industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract MIC Electronics Ltd lucrative customers.
High cash cycle compare to competitors
MIC Electronics Ltd has a high cash cycle compare to other players in the Semiconductors industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of MIC Electronics Ltd is dominated by functional specialists. It is not different from other players in the Semiconductors industry, but MIC Electronics Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help MIC Electronics Ltd to focus more on services in the Semiconductors industry rather than just following the product oriented approach.
High dependence on MIC Electronics Ltd ‘s star products
– The top 2 products and services of MIC Electronics Ltd still accounts for major business revenue. This dependence on star products in Semiconductors industry has resulted into insufficient focus on developing new products, even though MIC Electronics Ltd has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MIC Electronics Ltd is slow explore the new channels of communication. These new channels of communication can help MIC Electronics Ltd to provide better information regarding Semiconductors 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 India, MIC Electronics Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
MIC Electronics Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MIC Electronics Ltd are -
Using analytics as competitive advantage
– MIC Electronics Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Semiconductors sector. This continuous investment in analytics has enabled MIC Electronics Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help MIC Electronics Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for MIC Electronics Ltd 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.
Use of Bitcoin and other crypto currencies for transactions in Semiconductors industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for MIC Electronics Ltd in the Semiconductors industry. Now MIC Electronics Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
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. MIC Electronics Ltd 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 MIC Electronics Ltd to increase its market reach. MIC Electronics Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for MIC Electronics Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Semiconductors industry, and it will provide faster access to the consumers.
Buying journey improvements
– MIC Electronics Ltd can improve the customer journey of consumers in the Semiconductors industry by using analytics and artificial intelligence. It 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Semiconductors industry, but it has also influenced the consumer preferences. MIC Electronics Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of MIC Electronics Ltd has opened avenues for new revenue streams for the organization in Semiconductors industry. This can help MIC Electronics Ltd to build a more holistic ecosystem for MIC Electronics Ltd products in the Semiconductors industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– MIC Electronics Ltd can develop new processes and procedures in Semiconductors industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– MIC Electronics Ltd can use the latest technology developments to improve its manufacturing and designing process in Semiconductors sector. 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.
Loyalty marketing
– MIC Electronics Ltd 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, MIC Electronics Ltd can use these opportunities to build new business models that can help the communities that MIC Electronics Ltd operates in. Secondly it can use opportunities from government spending in Semiconductors sector.
Threats MIC Electronics Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MIC Electronics Ltd are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, MIC Electronics Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Semiconductors sector.
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.
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 MIC Electronics Ltd in the Semiconductors sector and impact the bottomline of the organization.
Environmental challenges
– MIC Electronics Ltd 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. MIC Electronics Ltd can take advantage of this fund but it will also bring new competitors in the Semiconductors industry.
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. MIC Electronics Ltd needs to understand the core reasons impacting the Semiconductors industry. This will help it in building a better workplace.
Increasing wage structure of MIC Electronics Ltd
– 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 MIC Electronics Ltd.
Regulatory challenges
– MIC Electronics Ltd 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 Semiconductors industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, MIC Electronics Ltd 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 MIC Electronics Ltd prominent markets.
Technology acceleration in Forth Industrial Revolution
– MIC Electronics Ltd has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, MIC Electronics Ltd needs to keep up with the evolution of technology in the Semiconductors 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.
Consumer confidence and its impact on MIC Electronics Ltd 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 Semiconductors industry and other sectors.
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. MIC Electronics Ltd 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 MIC Electronics Ltd.
Weighted SWOT Analysis of MIC Electronics Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MIC Electronics Ltd 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 MIC Electronics Ltd 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 MIC Electronics Ltd 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 MIC Electronics Ltd 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 MIC Electronics Ltd needs to make to build a sustainable competitive advantage.