Global megatrends 20jun14

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The Moment Is Now The Moment Is Now GLOBAL MEGATRENDS IMPLICATIONS TO STRATEGY FORMULATION & EXECUTION: A CONTEXT FOR TRANSFORMATION Dr. Fariborz Ghadar William A. Schreyer Chair of Global Management, Policies and Planning; and Founding Director, Center for Global Business Studies Pennsylvania State University Email: [email protected] Web Site: www.ghadar .com

description

Please view in slide show mode. Presentation given at an annual strategy conference for AMD's senior mgt. I was responsible for creating all of the graphics and animation but do not own the content. It demonstrates the proper use of PowerPoint in that, without the speaker, it won't make a lot of sense. PPT should be used as speaker support, not a stand alone document. You will notice the use of many design elements including: rule of 3, color coding, compare/contrast, adherence to brand guidelines, etc.

Transcript of Global megatrends 20jun14

Page 1: Global megatrends 20jun14

The Moment Is NowThe Moment Is NowThe Moment Is NowThe Moment Is Now

GLOBAL MEGATRENDS IMPLICATIONS TO STRATEGY FORMULATION & EXECUTION: A CONTEXT FOR TRANSFORMATION

Dr. Fariborz GhadarWilliam A. Schreyer Chair ofGlobal Management, Policies and Planning; andFounding Director, Center for Global Business StudiesPennsylvania State University

Email: [email protected] Site: www.ghadar .com

Page 2: Global megatrends 20jun14

2| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

International Product Life Cycle

High Engineering Content

Few Manufacturers/ Less Competition

Unique/ Non-Standard

R&D Sales >10%

Technical Advertising

Small Market

Small Export Market Price/Cost High

Manufactured in Triad

Phase IHigh Tech

Page 3: Global megatrends 20jun14

3| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Phase IHigh Tech

International Product Life Cycle

Phase IHigh Tech

High Engineering ContentR&D Sales > 10%Small export marketSmall marketFew Manufacturers/ Less CompetitionPrice/Cost highManufactured in TriadTechnical advertisingUnique/ Non-Standard

Process Engineering Emphasis

Mass Advertising

Growing Market

World Market Growth of

Export Market

More Standardized

R&D Drops

Rising Competition

International Manufacturing

Price/Cost Declines

Phase IIGrowth and

Internationalization

Page 4: Global megatrends 20jun14

4| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

International Product Life Cycle

Phase IHigh Tech

High Engineering ContentR&D Sales > 10%Small export marketSmall marketFew Manufacturers/ Less CompetitionPrice/Cost highManufactured in TriadTechnical advertisingUnique/ Non-Standard

Phase IIGrowth and

Internationalization

Phase IIGrowth and

InternationalizationMore StandardizedR&D DropsRising CompetitionInternational ManufacturingGrowth of export marketWorld marketPrice/cost declineMass advertisingGrowing MarketProcess Engineering Emphasis

Standard Product

No Engineering Emphasis

High Competition

Manufactured where factors of production are lowest

No R&D

World Market

No Advertising

Saturated Market

Price/ Cost 1.0

Phase IIIMaturing

Phase IIIMaturing

Manufactured where factors of production are lowestNo R&DStandard ProductWorld MarketNo engineering emphasisSaturated marketNo AdvertisingPrice/cost ~ 1.0High competition

Page 5: Global megatrends 20jun14

5| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Global Competitive Positioning

Unique/Non-Standard High Engineering

Content Few Manufacturers/

Less Competition Price/Cost High Manufactured in Triad R&D/Sales >10% Technical Advertising Small Market Small Export Market

Phase I: High Tech

More Standardized Process Engineering

Emphasis Rising Competition Price/Cost Declines International

Manufacturing R&D Drops Mass Advertising Growing Market World Market Growth of Export

Market

Phase II: Growth &Internationalization

Standard Product No Engineering

Emphasis High Competition Price/Cost 1.0 Manufactured where

factors of production are lowest

No R&D No Advertising Saturated Market World Market

Phase III: Maturing

Page 6: Global megatrends 20jun14

6| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

International Product Life Cycle

Phase I: High TechPhase II: Growth &Internationalization Phase III: Maturing

Page 7: Global megatrends 20jun14

7| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Factors Affecting Global Competitive Positioning

Employee Relations Cultural Sensitivity Marketing & Advertising International Trade Political Risk & Government Intervention Ownership Transfer Pricing, Management Fees, Royalty

Payments, Profit Repatriation Financing

Product Life Cycle

Page 8: Global megatrends 20jun14

8| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Where are our…

Markets?Markets?

CustomersCustomers

Competitors?Competitors?

Culture?Culture?

Where are we?Where are we?

Page 9: Global megatrends 20jun14

9| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Discussion at Tables

What are the implications of these trends to our firm?

What are the implications of these trends to our firm?

How are businesses attempting to respond to some of these global economic and social trends?

How are businesses attempting to respond to some of these global economic and social trends?

Page 10: Global megatrends 20jun14

10| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

International Product Life Cycle

Phase I: High TechPhase II: Growth &Internationalization Phase III: Maturing

Page 11: Global megatrends 20jun14

11| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

International Product Life Cycle

Phase I: High TechPhase II: Growth &Internationalization Phase III: Maturing

Page 12: Global megatrends 20jun14

12| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Does the Rule of Three Work?

?3

Page 13: Global megatrends 20jun14

13| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

The Rewards go to #1 or #2

Earnings

3 - 4 Years

3.) $0

1.) $100M1.) $100M

2.) $36M2.) $36M

3.) $03.) $0

4.) - $28M4.) - $28M

predevelopmentcost doubling reduces earnings to $96M

predevelopmentcost doubling reduces earnings to $96M

Page 14: Global megatrends 20jun14

14| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Market Share & Return on Investment

Return onInvestment

Market Share

Cost of Capital

Page 15: Global megatrends 20jun14

15| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Market Position

Inner CircleRule of ThreeFull LineMarket CoverageField ForcesSOA Tech R&DVertical IntegrationScale

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16| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Inner Circle Challenges

Monitor Outer Circle for “Breakouts”

Penetrate Niches Manage costs Convergence of other “Circles” Modernize/Recreate Industry Stabilize Inner Circle Cover Innovations Globalization

Inner CircleRule of ThreeFull LineMarket CoverageField ForcesSOA Tech R&DVertical IntegrationScale

Page 17: Global megatrends 20jun14

17| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Global Competitive Positioning

Phase I: High TechPhase II: Growth &Internationalization Phase III: Maturing

Product InnovativenessProduct capabilitiesProcess technologyInformation technologyR&D capability

ACustomer Intimacy

Brand franchiseDistribution systems

BMarket research

Competitive position

Operational ExcellenceEfficient operationsFinancial strengthLow cost

D

C

LeadershipOrganizational Capability

Shared mindset Reward system/metricsStructure

Page 18: Global megatrends 20jun14

18| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Innovation & Core Competencies

Customer Intimacy

Operational Excellence

Innovation

Page 19: Global megatrends 20jun14

19| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Recent Research Shows the Rise of the Niche Players

Reference:

Wall Street Journal Article

Financial Times Article

Harvard Business Review Article

Monitor Outer Circle for “Breakouts”

Cover Innovations

Convergence of other “Circles”

Modernize/Recreate Industry

Stabilize Inner Circle

Penetrate Niches

Globalization

Inner CircleRule of ThreeFull LineMarket CoverageField ForcesSOA Tech R&DVertical IntegrationScale

Manage costs

Page 20: Global megatrends 20jun14

20| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Create a Culture that Lives The Value Promise

EffectiveLeadership

Employee Enthusiasm

Customer Satisfaction

ImprovedProfits

Commit to creating a valuable, differentiated employee experience

Commit to creating a valuable, differentiated employee experience

Page 21: Global megatrends 20jun14

21| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

What Will it Take to Succeed?

Focused operations based on core competencies

Customer responsiveness

Relentless improvement

Innovative products &

services Value delivery

Reward for global focus

New. Quick. Global, “Good Deal”New. Quick. Global, “Good Deal”

Page 22: Global megatrends 20jun14

22| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Global Tectonics

Environmental Degradation

Economic Integration

Environmental Degradation

Economic Integration

Population

Urbanization

Disease & Globalization

Resource Management

Population

Urbanization

Disease & Globalization

Resource Management

Knowledge Dissemination

Information Technology

Biotechnology

Nanotechnology

Knowledge Dissemination

Information Technology

Biotechnology

Nanotechnology

Future Conflict

Governance

Future Conflict

Governance

Page 23: Global megatrends 20jun14

23| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

What To Do?

Empower the people to do the right thing

Core Competencies

Strategic Intent

LET’S DO IT!LET’S DO IT!

Page 24: Global megatrends 20jun14

24| AMD Executive Forum | January, 2010 © 2011 Fariborz Ghadar All Rights reserved - CONFIDENTIAL

Trademark Attribution

AMD, the AMD Arrow logo and combinations thereof are trademarks of Advanced Micro Devices, Inc. in the United States and/or other jurisdictions. Other names used in this presentation are for identification purposes only and may be trademarks of their respective owners.

©2010 Advanced Micro Devices, Inc. All rights reserved.