SWOT Analysis / TOWS Matrix for Nordic Semiconductor (United States)
Based on various researches at Oak Spring University , Nordic Semiconductor is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing commodity prices, increasing energy prices, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Nordic Semiconductor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nordic Semiconductor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nordic Semiconductor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nordic Semiconductor 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 Nordic Semiconductor can be done for the following purposes –
1. Strategic planning of Nordic Semiconductor
2. Improving business portfolio management of Nordic Semiconductor
3. Assessing feasibility of the new initiative in United States
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nordic Semiconductor
Strengths of Nordic Semiconductor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nordic Semiconductor are -
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For Nordic Semiconductor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nordic Semiconductor 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.
High switching costs
– The high switching costs that Nordic Semiconductor 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.
Ability to recruit top talent
– Nordic Semiconductor is one of the leading players in the Semiconductors industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Nordic Semiconductor
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nordic Semiconductor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Nordic Semiconductor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nordic Semiconductor 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.
Analytics focus
– Nordic Semiconductor 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 United States 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.
Low bargaining power of suppliers
– Suppliers of Nordic Semiconductor in the Technology sector have low bargaining power. Nordic Semiconductor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nordic Semiconductor to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Nordic Semiconductor 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 Nordic Semiconductor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nordic Semiconductor emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Nordic Semiconductor comprises – understanding the underlying the factors in the Semiconductors 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)
– Nordic Semiconductor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nordic Semiconductor staying ahead in the Semiconductors industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Semiconductors industry
– Nordic Semiconductor is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Nordic Semiconductor 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 Nordic Semiconductor have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Nordic Semiconductor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nordic Semiconductor are -
Skills based hiring in Semiconductors industry
– The stress on hiring functional specialists at Nordic Semiconductor 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.
Aligning sales with marketing
– From the outside it seems that Nordic Semiconductor needs to have more collaboration between its sales team and marketing team. Sales professionals in the Semiconductors industry have deep experience in developing customer relationships. Marketing department at Nordic Semiconductor can leverage the sales team experience to cultivate customer relationships as Nordic Semiconductor is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Nordic Semiconductor is one of the leading players in the Semiconductors industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Semiconductors industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Nordic Semiconductor, it seems that company is thinking out the frontier risks that can impact Semiconductors industry. 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 bargaining power of channel partners in Semiconductors industry
– because of the regulatory requirements in United States, Nordic Semiconductor 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 Semiconductors industry.
Ability to respond to the competition
– As the decision making is very deliberative at Nordic Semiconductor, in the dynamic environment of Semiconductors industry it has struggled to respond to the nimble upstart competition. Nordic Semiconductor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Nordic Semiconductor supply chain. Even after few cautionary changes, Nordic Semiconductor is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nordic Semiconductor vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Nordic Semiconductor products
– To increase the profitability and margins on the products, Nordic Semiconductor needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Semiconductors industry, Nordic Semiconductor 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.
Low market penetration in new markets
– Outside its home market of United States, Nordic Semiconductor needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Nordic Semiconductor 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.
Nordic Semiconductor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nordic Semiconductor are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nordic Semiconductor 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 Nordic Semiconductor to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Nordic Semiconductor 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nordic Semiconductor 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.
Creating value in data economy
– The success of analytics program of Nordic Semiconductor has opened avenues for new revenue streams for the organization in Semiconductors industry. This can help Nordic Semiconductor to build a more holistic ecosystem for Nordic Semiconductor products in the Semiconductors industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Nordic Semiconductor to increase its market reach. Nordic Semiconductor 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.
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 Nordic Semiconductor in the Semiconductors industry. Now Nordic Semiconductor can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Nordic Semiconductor 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 Semiconductors industry.
Learning at scale
– Online learning technologies has now opened space for Nordic Semiconductor 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
– Nordic Semiconductor 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.
Developing new processes and practices
– Nordic Semiconductor 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.
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. Nordic Semiconductor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Nordic Semiconductor 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 Nordic Semiconductor to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nordic Semiconductor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nordic Semiconductor can use these opportunities to build new business models that can help the communities that Nordic Semiconductor operates in. Secondly it can use opportunities from government spending in Semiconductors sector.
Threats Nordic Semiconductor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nordic Semiconductor are -
Environmental challenges
– Nordic Semiconductor 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. Nordic Semiconductor can take advantage of this fund but it will also bring new competitors in the Semiconductors industry.
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 Nordic Semiconductor business can come under increasing regulations regarding data privacy, data security, etc.
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. Nordic Semiconductor needs to understand the core reasons impacting the Semiconductors industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nordic Semiconductor 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.
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 Nordic Semiconductor.
Technology acceleration in Forth Industrial Revolution
– Nordic Semiconductor has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, Nordic Semiconductor 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Semiconductors industry are lowering. It can presents Nordic Semiconductor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Semiconductors sector.
Increasing wage structure of Nordic Semiconductor
– 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 Nordic Semiconductor.
Stagnating economy with rate increase
– Nordic Semiconductor 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 Semiconductors industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nordic Semiconductor in Semiconductors industry. The Semiconductors 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.
Regulatory challenges
– Nordic Semiconductor 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.
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. Nordic Semiconductor 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.
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 Nordic Semiconductor in the Semiconductors sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Nordic Semiconductor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor 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 Nordic Semiconductor needs to make to build a sustainable competitive advantage.
