Strategic Management and

Strategic Competitiveness

Group 6
242222002 Mochammad Amin Hidayat
242222005 Muchlis Adi Kusuma
242222024 Irwansyah
242222026 Kevin Yosua Tahapary
242222027 Hammad Akram

Ch 1
 Ch 1

Strategic Management and Strategic Competitiveness

● Strategic competitiveness is achieved when a firm successfully formulates and
implements a value creating strategy.
● A firm has a competitive advantage when it implements a strategy that creates superior
value for customers and that competitors are unable to duplicate or find it too costly to try
to imitate.
● Basis for competitive advantage in the semiconductor industry is the company have to
compete with subsystem distributors and Original Equipment Manufacturer collaborative
design alliances. And, when they reorganize their portfolios to position themselves in
profitable areas, portfolio shapers will need to pay close attention to clients' needs within
their country. Not one company can specialize in everything. Each country specializes in
different fields when it comes to producing semiconductors.
 Ch 1

The Global
Economy
Competitive
Landscape Technology Diffusion and
Disruptive Technologies

Technology and
Technological The Information Age
Change
Increasing Knowledge
Intensity
Ch 1

The I / O M odel of
Above-Average
Returns
The industrial organization (I/O)
model of above-average returns
explains the external
environment’s dominant influence
on a firm’s strategic actions.
 Ch 1
The Resource-Based
M odel of Above-Average
Returns
Assumption: each organization is a
collection of unique resources and
capabilities.
 Ch 1
Vision and Purpose → to inform stakeholders of what the firm is,

Mission what it seeks to accomplish, and who it seeks to serve.

Vision Mission

❑ A picture of what the firm wants to be ❑ A mission specifies the businesses in

and what it wants to ultimately achieve. which the firm intends to compete and
the customers it intends to serve.
❑ An effective vision stretches and
challenges people as well. ❑ Creating a mission often involves more
people because it deals more directly
❑ A vision should be clearly tied to the
with product markets and customers.
conditions in the firm’s external and
internal environment .
 The individuals, groups, and
organizations that can affect the firm’s Ch 1
Stakeholders vision and mission, are affected by the
strategic outcomes achieved, and have
enforceable claims on the firm’s
performance.
 Ch 1

Strategic Leaders Strategic Management Process

❑ People at various levels of the company

who determine strategic actions to
help the company achieve its vision
and fulfill its mission.
❑ A rational approach firms use to achieve
strategic competitiveness and earn above-
average returns.
● A-S-P process:

❑ Strategic leaders need to:

• Analyses for developing strategies
▪ have a strong strategic orientation
• Strategies to implement
▪ become an innovative thinker to
• Performance of the firm in taking a
be able to embrace dynamic
rational approach.
change
▪ have a global mindset.
General Environment
and Industry Analysis
Group 6
242222002 Mochammad Amin Hidayat
242222005 Muchlis Adi Kusuma
242222024 Irwansyah
242222026 Kevin Yosua Tahapary
242222027 Hammad Akram

Ch 2
The General, Industry, and
Competitor Environments
Ch 2

Firm CompetitiveEnvironment

General Industry

Competitor
Ch 2
 Ch 2

The General
Environment

Segments &
Elements
External Environmental Analysis Ch 2

Parts of the External Environment Analysis:

Opportunity
Scanning Forecasting

Threat Monitoring Assessing

The Industry
Environment
Analysis
Interpreting Industry Analyses Ch 2

In fact, in general, entering international markets enhances the chances

of success for new ventures as well as more established firms

Effective industry analyses are products of careful study and

interpretation of data and information from multiple sources.

Lack of threat of competition from substitute products, and competition

relatively moderate.
 Strategic Groups Ch 2

A strategic group is a group of companies emphasizing similar strategic

dimensions to employ similar strategies.

Strategic groups can be useful for analyzing the competitive structure of

an industry. S uch an analysis can assist in diagnosing a company's
competition, positioning, and profitability in an industry.

High mobility,competition high, and the resources are low

 Ch 2

Competitor
Analysis
Ethical Considerations Ch 2

Firms must follow relevant laws and regulations

Practicesconsidered both legal and ethicalinclude :

Attending trade fairs and shows to

Obtaining publicly obtain competitors’brochures, view
available information their exhibits, and listen to discussions
about their products.
Semiconductor
Group 1
242222002 Mochammad Amin Hidayat
242222005 Muchlis Adi Kusuma
242222024 Irwansyah
242222026 Kevin Yosua Tahapary
242222027 Hammad Akram

Case
1. Mengapa Semiconductor Industry disebut Case
sebagai global ecosystem?
Untuk mengubah material atau bahan baku menjadi chip semikonduktor banyak material teknologi
subsegment yang diperlukan. Membuat chip semikonduktor mencakup banyak industri, negara, dan
wilayah. Setiap segmen rantai nilai semikonduktor rata-rata memiliki 25 negara yang terlibat dalam rantai
pasokan langsung dan 23 negara terlibat dalam mendukung fungsi pasar. Sebuah produk semikonduktor
perlu melintasi beberapa perbatasan internasional sebelum akhirnya sampai ke konsumen akhir. Tidak ada
negara yang memiliki kemampuan end-to-end yang lengkap untuk desain dan manufaktur semikonduktor,
sehingga prosesnya tersebar di berbagai negara:
- Desain → Kanada, negara-negara Eropa, dan AS
- Pemasok peralatan dan bahan baku → Jepang, AS, dan beberapa negara Eropa
- Menufaktur, perakitan, pengujian pengemasan → Cina, Taiwan, Malaysia, dan negara-negara Asia
lainnya.
- Pusat utama R&D → Kanada, Cina, Jerman, India, Israel, Singapura, Korea Selatan, Inggris, dan AS.
2. Apa yang menyebabkan Semiconductor
Case
merupakan industri global?
Saat ini chip yang merupakan otak alat elektronik merupakan kebutuhan global karena manusia
tidak lepas dari alat elektronik, baik ponsel pintar, laptop, televisi dan lain sebagainya, sehingga
membuat industri semikonduktor sebagai penghasil chip menjadi industri global yang memainkan
peran penting dalam bisnis. Besarnya permintaan pasar membuat demand semikonduktor naik
setiap harinya membuat industri ini semakin kompetitif. Agar mampu survive, para pelaku industri
semikonduktor ini terus melakukan inovasi agar dapat menjadi market leader. Namun, bukan
berarti industri ini dapat bertahan di tengah persaingan bisnis. Tingginya permintaan dan
minimnya bahan baku sempat membuat terjadinya kelangkaan chip global sehingga menghambat
produksi alat elektronik dan membuat harga jualnya meningkat.
3. Segmen General Environment manakah yang menjadikan
industri semiconductor menjadi industri global? Case

Segmen Global dan Teknologi.

Industri semikonduktor memiliki rantai nilai yang kompleks dan tersebar secara geografis.
Membuat chip semikonduktor membutuhkan ribuan orang dengan pengetahuan khusus yang
mencakup banyak industri, negara, dan wilayah. Tidak ada negara yang memiliki kemampuan
end-to-end yang lengkap untuk desain dan manufaktur semikonduktor.
4. Mengapa intel punya fasilitas manufactures bukan hanya
di negara asalnya tapi juga di China bahkan Malaysia dan Case
Vietnam ?
Intel mempunyai beberapa perusahaan yang berada diluar negara asalnya (seperti
Vietnam, Malaysia) dikarenakan mereka ingin memanfaatkan sumberdaya yang relatif
lebih terjangkau dibandingkan dengan negara asalnya (baik dari segi biaya tenaga kerja,
Transportasi, maupun bahan baku). Selain itu juga karena pangsa pasar di negara
berkembang terbilang cukup menjanjikan sehingga pihak intel merasa tepat untuk
mendirikan perusahaan di beberapa negara berkembang.
5. Industri semiconductor terkemuka
dalam Satu dekade yang akan datang
Case

Dalam lima hingga sepuluh tahun ke depan industri semikonduktor akan terus tumbuh lebih
banyak dalam teknologi AI. Seperti disebutkan dalam artikel, “pertumbuhan AI, dengan beberapa
prediksi bahwa pertumbuhan dapat mencapai tingkat tahunan 50% untuk aplikasi inovatif. AI juga
dapat mengarah pada kemajuan dalam cara pembuatan semikonduktor”. Selain itu faktor skill
karyawan pada industri semikonduktor juga sangat berpengaruh bagi pertumbuhan industri
semikonduktor ini kedepannya, jika semua karyawan pada industri ini diberikan pelatihan untuk
mengasah skill mereka kemungkinan besar mereka bisa semakin berinovasi dalam bidang industri
semikonduktor kedepannya.
Brief Review Case

Definition
the brain of modern electronics that connects the physical world to
the digital world, sometimes called integrated circuits (ICs),
microprocessors, microchips, or simply chips.

Classification
● Based on function → memory chips, microprocessors,
standard chips, and complex system-on-a-chips (SoCs).
● Based on IC type → analog or logic device.
 Brief Review Case

Bell Labs invented the transistor

(an integral component in the specialized manufacturers of Intel releases its first
manufacture of radios, TV, and other semiconductor manufacturing microprocessor (4004)
electronics products. equipment were formed. containing 2300 transistors

1940 1950 1960 1971

Texas Instruments and Fairchild Semiconductor vertical specialization is increasingly

become leaders in producing silicon transistors, becoming more complex and global
→ the invention of the IC → the modern
semiconductor industry is born.
 Brief Review Case

Industry
● Intense competition → new products and competitors often
emerge that outperform existing products.
● Unstable demand → increase in innovative new end
products and economic downturns, product obsolescence,
and trade actions such as sanctions or tariffs.
● Main activities → design (fabless firms) and manufacturing
(foundries). No country has complete end-to-end capabilities
for semiconductor design and manufacturing.
● Some major semiconductor companies → Intel, NVIDIA,
Samsung, TSMC, ASML.
 Problem
The US is taking various trade actions about China's
semiconductor policies and investments:
● Several Chinese company acquisition proposals
were blocked by the US government.
● TSMC suspended processing new orders from
Huawei to comply with US export regulations.
● The Dutch government prevented ASML from
shipping EUV machines to China.
Case
● TSMC is operated under contract and does not
sell devices of its own design.
● US government restrictions barring US and
foreign companies from shipping chips to Huawei
without a US government license → the company
must obtain an export license to be able to avoid
export restrictions.
 Problem

● Decline in market share in the 1980s was overtaken

by competitors in Japan and Korea → exited the
memory (DRAM) sector and shifted its focus to
microprocessors for the personal computer (PC)
industry.
● In 2020 acquired Arm Holdings (a subsidiary of
● Development and manufacturing issues in 2018
Japanese technology conglomerate Softbank) →
→ one year behind schedule in the development of
raises concerns in the smartphone industry as it is 10 and 7nm chips.
under US regulatory review.
● Its competitors (Samsung Foundry and TSMC) in
2020 produced 5nm chips for Apple, Marvell, Huawei
and Qualcomm.
 Analytical Concept (1) – Intel
Competitive advantage is a firm possesses a competitive advantage over its direct competitors
when it earns (or has the potential to earn) a persistently higher rate of profit (Grant, 2016).

What Why How

• Exiting the DRAM (memory) sector.
Intel shifted its focus to
microprocessors for the growing
personal computer (PC) industry.
• The memory business had become
commoditized, and competitors in
Japan and South Korea were
winning the battle.
• More focus on product design and
less emphasis on cost and
manufacturing productivity and
microprocessor sector become
Intel’s core business

When Where For Whom

• Dominant supplier of chips to PC
industry and had a 64% market
share in 2020
• 9 manufacturing sites- 6 wafer
fabrication and 3 assembly/test
facilities in the US, China, Ireland,
Israel, Malaysia and Vietnam.
• Intel allocated $16 billion to capital
expenditures and $13 billion to R&D
in 2019 and xpanding in various
areas, including advanced graphics,
AI, 5G networking and autonomous
driving.
 Analytical Concept (2) – NVIDIA
Distinctive competence is an enduring firm specific ability that leads to above average
economic performance. (Makadok, 2000).

What Why How

• Introduced a variety of new products
and transformed from a niche player in
graphics chips to a major force in three
of the fastest growing semiconductor
areas: Al, gaming, and data-science
computing.
• NVIDIA was a leading company in the
gaming industry, and its platforms could
transform everyday PCs into powerful
gaming machines.
• NVIDIA announced that it would
acquire Arm Holdings for $40 billion.
Arm, a subsidiary of the Japanese
technology conglomerate Softbank,
designed microprocessors that powered
most of the world's smartphones.

When Where For Whom

• In 2020 • Arm was based in the U.K. and had • This combination has tremendous
more than 500 licensees for its benefits for both companies, our
technology customers, and the industry. For Arm's
ecosystem, the combination will
turbocharge Arm's R&D capacity and
expand its IP portfolio with NVIDIA's
world-leading GPU and Al technology
Analytical Concept (3) – Samsung Semiconductor
Distinctive competence is an enduring firm specific ability that leads to above average
economic performance (Makadok, 2000).
What
• Take the lead in fostering the country’s
competitiveness in the non-memory market
When
• In 2017 when spun off from Samsung
Semiconductor as separate subsidiary under
Samsung Electronics
Why How
• The second largest semiconductor firm in • Actively supporting small fabless and
sales, became the world leader in DRAM design-house business
memory in 1993 and continued to occupy
that position, also the leader in NAND
memory with a 30% share. NAND memory
chips were used in storage for smartphones,
computers, and other products.
Where For Whom
• separate subsidiary under Samsung • To compete with TSMC and other foundries
Electronics
Analytical Concept (4) – TSMC
Focus Strategy is when the enterprise focuses the limited resource and ability on a special
Object, so they can served the special market much better than his opponents, and then
establish the comparative competitive advantage (Mingran et al.)

What Why How

• Pure play foundry • TSMC is world’s largest and • 21 fabs and an annual capex
most important foundry budget of about $15 billion

When Where For Whom

• TSMC operated on a contract
basis and did not sell devices
of its own design.
• 18 fabs in Taiwan, two in
China, one in the United
States
• SMC supplied chips to Apple,
Qualcomm, NVIDIA, and many
other firms. Apple was TSMC's
largest client, accounting for
one-fifth of revenue.
Analytical Concept (5) – ASML
Focus Strategy is when the enterprise focuses the limited resource and ability on a special
Object, so they can served the special market much better than his opponents, and then
establish the comparative competitive advantage (Mingran et al.)

What Why How

• ASML was the world’s only • The company continued to • Using EUV technologies that
manufacturer of lithography improve its technology. were used to produce the
machines most advanced chipss

When Where For Whom

• In 2010, ASML shipped the first • Asian market • In 2020, ASML expected to
prototype Extreme Ultraviolet ship about 35 systems, which
(EUV) lithography system to an would make up about half of
Asian chipmaker the company's sale
Analytical Concept (6) – China
Distinctive competence is an enduring firm specific ability that leads to above average
economic performance. (Makadok, 2000).

What Why How

• Chinese government published an • Establishing a world-leading • "Made in China 2025" industrial
ambitious plan, Guidelines to semiconductor industry in all plan (MIC 2025) of China-seeks to
Promote National Integrated areas of the integrated circuit boost China's economic
Circuit Industry Development supply chain by 2030 competitiveness

When Where For Whom

• In 2025 • Advancing China's position in the • Global semiconductor industry
global manufacturing value chain,
leapfrogging into emerging
technologies, and reducing
reliance on foreign firms.
Problem
Analysis

Analysis based on the

General Environment and
Industry Environment

(Michael A. Hitt)
The General Environment Analysis

Demographic ● Some companies build factories in developing countries to

Segment obtain cheap labor
● High market demand in developing countries is also a major
factor in establishing factories in these countries

Economic Segment ● Intel changed its commodity products, which initially focused
on memory and chips, to become a microprocessor company
for portable computers.
● Samsung group split the samsung foundry into a company
under samsung electronics in order to compete with TSMC and
other companies.

Political/Legal ● The Chinese government publishes an ambitious “Made in

Segment China” plan.
● In August 2020, the Chinese government updated its
semiconductor policy.
Sociocultural ● Society that cannot be separated from technology
Segment
Technological ● Rapid technological changes
Segment ● Introduction of new products incorporating semiconductors
● Semiconductor needs are getting higher with smaller sizes and
higher technology

Global Segment ● Manufacturing semiconductor chips requires thousands of

people with specialized knowledge spanning many industries,
countries and regions.
● No country has complete end-to-end capabilities for
semiconductor design and manufacturing

Sustainable ● Materials needed to make semiconductor chips include silicon,

Physical photoresist, and rare metals
Environment ● Electricity consumption became a low priority in the early days
Segment of the semiconductor industry