SWOT Analysis / TOWS Matrix for Semiconductor Manufacturing (United States)
Based on various researches at Oak Spring University , Semiconductor Manufacturing is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, etc
Introduction to SWOT Analysis of Semiconductor Manufacturing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Semiconductor Manufacturing can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Semiconductor Manufacturing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Semiconductor Manufacturing 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 Semiconductor Manufacturing can be done for the following purposes –
1. Strategic planning of Semiconductor Manufacturing
2. Improving business portfolio management of Semiconductor Manufacturing
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 Semiconductor Manufacturing
Strengths of Semiconductor Manufacturing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Semiconductor Manufacturing are -
Learning organization
- Semiconductor Manufacturing 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 Semiconductor Manufacturing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Semiconductor Manufacturing emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Semiconductor Manufacturing in Semiconductors industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Semiconductor Manufacturing is one of the most innovative firm in Semiconductors sector.
Cross disciplinary teams
– Horizontal connected teams at the Semiconductor Manufacturing 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.
Sustainable margins compare to other players in Semiconductors industry
– Semiconductor Manufacturing has clearly differentiated products in the market place. This has enabled Semiconductor Manufacturing to fetch slight price premium compare to the competitors in the Semiconductors industry. The sustainable margins have also helped Semiconductor Manufacturing to invest into research and development (R&D) and innovation.
Training and development
– Semiconductor Manufacturing has one of the best training and development program in Technology industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Semiconductor Manufacturing 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.
Organizational Resilience of Semiconductor Manufacturing
– The covid-19 pandemic has put organizational resilience at the centre of everthing Semiconductor Manufacturing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Semiconductor Manufacturing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Semiconductor Manufacturing 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.
Ability to recruit top talent
– Semiconductor Manufacturing 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.
High switching costs
– The high switching costs that Semiconductor Manufacturing 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.
Low bargaining power of suppliers
– Suppliers of Semiconductor Manufacturing in the Technology sector have low bargaining power. Semiconductor Manufacturing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Semiconductor Manufacturing to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Semiconductor Manufacturing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Semiconductor Manufacturing are -
Lack of clear differentiation of Semiconductor Manufacturing products
– To increase the profitability and margins on the products, Semiconductor Manufacturing needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Semiconductor Manufacturing, in the dynamic environment of Semiconductors industry it has struggled to respond to the nimble upstart competition. Semiconductor Manufacturing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Semiconductors industry
– because of the regulatory requirements in United States, Semiconductor Manufacturing 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.
Skills based hiring in Semiconductors industry
– The stress on hiring functional specialists at Semiconductor Manufacturing 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.
Slow to strategic competitive environment developments
– As Semiconductor Manufacturing 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.
High operating costs
– Compare to the competitors, Semiconductor Manufacturing 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 Semiconductor Manufacturing lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Semiconductor Manufacturing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Semiconductors industry over the last five years. Semiconductor Manufacturing 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.
Workers concerns about automation
– As automation is fast increasing in the Semiconductors industry, Semiconductor Manufacturing 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 Semiconductor Manufacturing ‘s star products
– The top 2 products and services of Semiconductor Manufacturing 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 Semiconductor Manufacturing has relatively successful track record of launching new products.
High cash cycle compare to competitors
Semiconductor Manufacturing 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Semiconductor Manufacturing is slow explore the new channels of communication. These new channels of communication can help Semiconductor Manufacturing to provide better information regarding Semiconductors products and services. It can also build an online community to further reach out to potential customers.
Semiconductor Manufacturing Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Semiconductor Manufacturing are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Semiconductor Manufacturing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Semiconductor Manufacturing in the Semiconductors industry. Now Semiconductor Manufacturing can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Semiconductors industry, but it has also influenced the consumer preferences. Semiconductor Manufacturing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Semiconductor Manufacturing 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.
Buying journey improvements
– Semiconductor Manufacturing 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.
Using analytics as competitive advantage
– Semiconductor Manufacturing 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 Semiconductor Manufacturing to build a competitive advantage using analytics. The analytics driven competitive advantage can help Semiconductor Manufacturing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Semiconductor Manufacturing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Semiconductor Manufacturing 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.
Better consumer reach
– The expansion of the 5G network will help Semiconductor Manufacturing to increase its market reach. Semiconductor Manufacturing 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.
Loyalty marketing
– Semiconductor Manufacturing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Semiconductor Manufacturing is facing challenges because of the dominance of functional experts in the organization. Semiconductor Manufacturing can utilize new technology in the field of Semiconductors industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Semiconductor Manufacturing has opened avenues for new revenue streams for the organization in Semiconductors industry. This can help Semiconductor Manufacturing to build a more holistic ecosystem for Semiconductor Manufacturing products in the Semiconductors industry by providing – 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. Semiconductor Manufacturing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Semiconductor Manufacturing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Semiconductor Manufacturing are -
Regulatory challenges
– Semiconductor Manufacturing 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.
Shortening product life cycle
– it is one of the major threat that Semiconductor Manufacturing is facing in Semiconductors sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Semiconductor Manufacturing has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, Semiconductor Manufacturing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Semiconductor Manufacturing 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.
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 Semiconductor Manufacturing business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Semiconductor Manufacturing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Semiconductor Manufacturing 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 Semiconductor Manufacturing prominent markets.
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. Semiconductor Manufacturing 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Semiconductor Manufacturing 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.
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 Semiconductor Manufacturing.
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. Semiconductor Manufacturing needs to understand the core reasons impacting the Semiconductors industry. This will help it in building a better workplace.
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 Semiconductor Manufacturing in the Semiconductors sector and impact the bottomline of the organization.
Environmental challenges
– Semiconductor Manufacturing 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. Semiconductor Manufacturing can take advantage of this fund but it will also bring new competitors in the Semiconductors industry.
Weighted SWOT Analysis of Semiconductor Manufacturing Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Semiconductor Manufacturing 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing 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 Semiconductor Manufacturing needs to make to build a sustainable competitive advantage.