Critique-2

Jeffrey S. Meyer

05 July 2018

Julian West

Strategic Plan Part II: SWOTT and Environmental Scan

One of the most fundamental requirements for any company to succeed is to understand its internal environment. Internal environment analysis is just one tenet of a company’s overall strategic plan, but vitally important. NXP Semi-conductors has become the premier Semiconductor and Chip Company in the World for understanding itself and the world around it and then, as necessary, modifying and adjusting its strategy. The best way to understand if a strategy is working or should it require change is to perform a SWOT analysis. It is only after understanding Strengths, Weaknesses, Opportunities and Threats can NXP understand the legal, government, competitive and technological forces in play to develop a new strategy or stick with the status quo.

Economic Regulatory and Legal Forces

It is important to understand NXP operates in a global environment and this subjects NXP Semiconductors to external pressures. Factors such as culture as well as economic and legal situations have subjected NXP Semiconductors to pressure. Laws and regulations in different countries have a direct impact on company performance. NXP is subject to quality regulations as well as accounting and business regulations (Elms & Low, 2013). It must follow the relevant laws if it is to maintain its business operations. Changes in these laws have a direct effect on NXP Semiconductors and it will directly impact business especially since there are environmental laws yhe company is expected to comply with directly affecting its operations of a new division. Economic factors will have a direct impact on the business and factors such as the recent global financial crisis have had a major impact on operations of the organization.

It is important to note that consumer behavior will change during recessions as they will have less money to due to decline in economic activity. Another issue that organizations will deal with is the rising labor as well as operational costs. The inflationary environment as well as reducing profitability will have a negative impact on NXP Semiconductors and its performance (NXP, 2016). Another issue of concern is the fact that many of the organization’s business practices will usually raise concern with activists as well as international advocacy groups. Autonomous Automotive Division should also ensure that it does not violate any laws and regulation in the home market as well as in other nations. Licensing regulations are another major issue that NXP Semiconductors is expected to consider in its operations. Stricter customs and trade regulations are yet another major issue that NXP Semiconductors is expected to deal with.

Adapting to Change

NXP also must consider its past heritage and used this as a motivation to move forward through the realization of a distinctive history which was rich with technology breakthroughs and innovation. NXP also realized the importance of hands on approach to innovation and it adopted this technique. It developed a stream of innovative products which enhanced the performance of at all levels. The company effectively used past knowledge to brand its future in ways which were effective by designing better ways of understanding the customer and was able to use technology to create product as well as service improvements.

Supply Chain

NXP Semiconductors will have to implement supply chain planning and this will help Autonomous Automotive Division to predict future requirements to balance supply as well as demand. Autonomous Automotive Division must be able to consider the available capacity of its network and this has included a consideration of an ability to react to demand signals as well as the supply chain risks (Global Industry Analysts, 2015). This division must also understand the need to building an integrated supply chain planning process ranging from long term planning, sales and operations planning as well as operational planning. Furthermore, Autonomous Automotive Division must also understand the importance of effective execution of planning processes as well as achieving the right demand and supply balance. The operational structure of NXP Semiconductors has enabled the direction which has been set by the business as well as the commercial strategy of the organization. The manufacturing as well as service model of NXP Semiconductors will be able to determine how Autonomous Automotive Division delivers on its strategic differentiators. The supply chain strategy of NXP Semiconductors has been able to synchronize all components of the supply chain effectively.

It has included the process of resource allocation as well as the uses of business units top successfully achieve its business goals. NXP has also implemented the use of a supply chain operating model and this has allowed for the right capabilities and ensured leadership alignment to support organizational change (Swayne, 2011). Yet another major development of NXP Semiconductors has been the strategic consideration in tax effectiveness of the supply chain. The supply chain transformation initiatives have reduced operational costs and increased profits of the organization. It has implemented a lean six sigma process which has ensured structural and proven performance of the organization.

Considerations for the Development of a Strategic Plan

Strategic planning is important at the organizational level because it ensures the identification of trends as well as issues which affect the organizational performance. It will also ensure the delivery of an overall planning process that will directly influence the work processes at organizational level. It would be important to gather all the information which would be needed, and this would help to identify issues as well as challenges and trends which affect NXP Semiconductors (Wheelan, Hunger, Hoffman& Bamford, 2017). Strategic planning would also involve gathering information concerning the target clients. The management would also have to consider the analysis of external as well as internal outputs and this would set the general direction for organizational achievement. NXP Semiconductors will also have to create objectives and use a strategy map and this will ensure that all the key issues facing the new division dealt with effectively. The use of visual tools may be helpful as this will enable the presentation of objectives in the strategy map of the organization. It will be important to ensure that the internal as well as external inputs have been collected and analyzed.

Another important aspect that NXP Semiconductors will have to consider is the choosing of effective performance measures. These measures should be relevant to the strategic objectives they should be used in the strategic review process (Strategic Management, 2017) Managing risk will also be important for as it will be important to ensure the effective identification as well as mitigation of risks by the organization. Developing a risk management approach will be necessary for the new Autonomous Division will ensure sufficient identification as well as prioritization, mitigation and monitoring of the organizational processes. Managing the strategy will also be important as this will ensure effective strategic management processes aimed at improving the performance of the organization.

Issues and Opportunities Faced by Autonomous Automotive Division

One major issue that NXP Semiconductors continues to face is competition, especially since the market is very competitive in the United States as well as around the globe. There are several prominent semiconductor and Chip making firms in the market the same range of products. Competition between the sellers to gain market share exists in various areas such as new technologies as well as product performance, price and service as well as design. Rapid changes in technology and consumer preferences have led to risk factors for NXP Semiconductors (Lipsey, 2006). Another major issue affecting NXP Semiconductors is the current market volatility especially since it is exposed to fluctuations. Autonomous Automotive Division has lacked sufficient mechanisms to lessen the impact of unfavorable exchange rates. It is also important to consider that the purchase price will directly affect the customer, and this will create natural competition between the manufacturers.

One major opportunity that NXP Semiconductors has is the emerging market segment across the globe. NXP continues to focus on future change and it aims at enhancing its brand image in such areas while it has successfully managed to build an effective distribution network and this has ensured success for the organization NXP has also successfully built a good reputation and brand loyalty through enhancing good customer relation with the auto industry, technology firms and cellular companies Furthermore, it has improved marketing practices and this has enabled expansion into the international market. Additionally, it has also managed to successfully analyze the current marketing trends and it has used the information to improve its business practices. Proper planning and management has enabled NXP Semiconductors to develop effective ways of managing its operations and this has been effective for the organization.

References CHRON. (2017, February 3). The Five Stages Of Strategic Management. Retrieved from CHRON: http://smallbusiness.chron.com/five-stages-strategic-management-process-18785.html Hitt, M., Ireland, R., & Hoskisson, R. (2015). Strategic Management: Competitiveness and Globalization (11th ed). Stamford, CT: Cengage. Strategic Management. (2017, February 4). Retrieved from Boundless.Com: https://www.boundless.com/management/textbooks/boundless-management-textbook/strategic-management-12/creating-strategy-common-approaches-89/strategic-management-430-882/ Strategic Management Process. (2017, February 4). Retrieved from MBASkool.com: http://www.mbaskool.com/business-concepts/marketing-and-strategy-terms/7247-strategic-management-process.html

Appendix A

IMPORTANCE IMPORTANCE

1Positive Future for Semiconductor business 1Underperforming business segment

2Robust Financial position and strength 2Comeptetive Maket Segment

3Strong market Position 3Most Business from Single Customer

4 Strong Portfolio for MicroChip Technology 4

5 Strong Portfolio for Autonomous Advanced Technology 5

6 Economies of Scale 6

IMPORTANCE IMPORTANCE

1Explosion of Autonomy in Auto 1Uncertainty of Global economy

2Growing Industry 2Competing Industry Giant: Intel

3Growth In Global Position 3Emergence of smaller chip makers

4Growth in Autonomous sytems 4Uncertainty of World Events

5Increased requirement for Information Gathering 5Renewed price increases in Materials

6 6Increased fuel anf oil prices

7 7

8 8

OPPORTUNITIES (+)

WEAKNESSES (–)

THREATS (–)

INTERNAL FACTORS

EXTERNAL FACTORS

STRENGTHS (+)