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Flevy Management Insights Case Study
Global Expansion Strategy for Semiconductor Manufacturer Targeting IoT


Fortune 500 companies typically bring on global consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture, or boutique consulting firms specializing in Customer Journey Mapping to thoroughly analyze their unique business challenges and competitive situations. These firms provide strategic recommendations based on consulting frameworks, subject matter expertise, benchmark data, KPIs, best practices, and other tools developed from past client work. We followed this management consulting approach for this case study.

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Consider this scenario: A leading semiconductor manufacturer, specializing in components for the Internet of Things (IoT) devices, faces challenges in mapping the customer journey effectively due to the fragmented nature of the IoT market.

The organization has experienced a 20% decline in market share over the last two years due to increased competition and rapid technological advancements. Additionally, internal challenges such as supply chain disruptions have led to a 15% increase in production costs. The primary strategic objective of the organization is to achieve global market leadership in the IoT semiconductor industry by optimizing the customer journey, enhancing supply chain resilience, and capitalizing on emerging market opportunities.



This organization, at the forefront of the semiconductor industry, is navigating through a period of intensified competition and changing market demands. A deeper analysis might reveal that these challenges stem from a fragmented approach to understanding and integrating the customer journey into its strategic planning, coupled with lagging supply chain innovations in comparison to competitors.

Strategic Planning Analysis

The semiconductor industry is experiencing unprecedented growth, driven by demand for IoT devices, automotive electronics, and data center expansions.

Understanding the competitive landscape requires analysis of the following forces:

  • Internal Rivalry: Intense competition among established players and emerging startups is pushing innovation but also driving price sensitivity among customers.
  • Supplier Power: Limited due to the high number of raw material suppliers; however, specialized components have few suppliers, giving them moderate power.
  • Buyer Power: Increasing as IoT device manufacturers seek to lower costs and diversify their semiconductor sourcing to ensure supply chain resilience.
  • Threat of New Entrants: Moderate, given the high capital expenditure required for semiconductor manufacturing, but lower for fabless companies focusing on design and innovation.
  • Threat of Substitutes: Low in the short term but potentially higher as alternative technologies (e.g., quantum computing) mature.

Emerging trends include the rise of AI and machine learning in device functionality, increased focus on energy-efficient designs, and the strategic importance of securing semiconductor supply chains. These trends lead to major changes in industry dynamics:

  • Shift towards more energy-efficient semiconductor designs, opening opportunities for innovation but requiring significant R&D investments.
  • Increased vertical integration by device manufacturers, posing risks to independent semiconductor suppliers not aligned with these vertically integrated entities.
  • Heightened geopolitical tensions impacting global supply chains, necessitating a strategic review of manufacturing and distribution footprints.

A STEER analysis highlights Sociotechnical advancements as a key driver for the semiconductor industry, with Environmental considerations increasingly influencing design and production processes. Economically, the industry is buoyed by demand but faces cost pressures. Regulatory changes, particularly in trade, present both opportunities and risks, while Technological advancements continue to redefine competitive dynamics.

Learn more about Supply Chain Machine Learning Competitive Landscape

For effective implementation, take a look at these Customer Journey Mapping best practices:

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Internal Assessment

The organization is recognized for its innovative semiconductor solutions for IoT devices but struggles with integrating customer feedback into product development and maintaining cost-effective supply chains.

SWOT Analysis

Strengths include a strong patent portfolio and a reputation for quality. Opportunities lie in expanding into emerging markets and developing next-generation semiconductors. Weaknesses are seen in supply chain vulnerabilities and high production costs. Threats include intensifying global competition and potential disruptions from geopolitical tensions.

Distinctive Capabilities Analysis

Core competencies in innovation and quality position the company well for market leadership. However, capabilities in supply chain management and customer-centric product development need strengthening to capitalize on growth opportunities and mitigate risks from competition and market changes.

Value Chain Analysis

Efficiencies can be realized in procurement and logistics through strategic partnerships and investment in technology. Sales and after-sales support are strengths, but more focus is needed on integrating customer insights into the early stages of product development.

Learn more about Supply Chain Management Customer Insight Disruption

Strategic Initiatives

  • Optimize Customer Journey for IoT Semiconductor Purchasers: Implement a comprehensive customer journey mapping initiative to better understand and meet the needs of IoT device manufacturers, aiming to enhance customer satisfaction and loyalty. The value creation lies in increased sales and stronger customer relationships. This initiative requires investment in customer relationship management (CRM) systems and analytics capabilities.
  • Strengthen Supply Chain Resilience: Develop a multi-sourced supply chain strategy to reduce dependency on single suppliers and mitigate risks from geopolitical tensions. The intended impact is to ensure consistent supply and cost efficiency, creating value through improved reliability and market responsiveness. Requires investment in supply chain analytics and relationship management.
  • Accelerate Innovation in Energy-Efficient Semiconductors: Focus R&D efforts on developing semiconductors that offer superior energy efficiency for IoT devices, addressing a critical market need and differentiating the company’s offerings. The expected value is in capturing market share in a fast-growing segment and commanding premium pricing. This initiative will require significant R&D investment and potentially strategic partnerships.

Learn more about Customer Satisfaction Customer Journey Value Creation

Customer Journey Mapping Implementation KPIs

KPIS are crucial throughout the implementation process. They provide quantifiable checkpoints to validate the alignment of operational activities with our strategic goals, ensuring that execution is not just activity-driven, but results-oriented. Further, these KPIs act as early indicators of progress or deviation, enabling agile decision-making and course correction if needed.


What gets measured gets managed.
     – Peter Drucker

  • Customer Satisfaction Score: Measures the effectiveness of the customer journey optimization initiative.
  • Supply Chain Disruption Index: Tracks improvements in supply chain resilience.
  • Revenue Growth from New Products: Gauges the success of innovation in energy-efficient semiconductors.

These KPIs offer insights into customer engagement, operational stability, and innovation success, providing a comprehensive view of the strategic plan’s impact.

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Customer Journey Mapping Best Practices

To improve the effectiveness of implementation, we can leverage best practice documents in Customer Journey Mapping. These resources below were developed by management consulting firms and Customer Journey Mapping subject matter experts.

Customer Journey Mapping Deliverables

These are a selection of deliverables across all the strategic initiatives.

  • Customer Journey Mapping Report (PPT)
  • Supply Chain Resilience Plan (PPT)
  • Energy-Efficient Semiconductor R&D Roadmap (PPT)
  • Strategic Initiative Performance Dashboard (Excel)

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Optimize Customer Journey for IoT Semiconductor Purchasers

The team utilized the Customer Experience Journey Map (CEJM) and the Value Proposition Canvas (VPC) to enhance the understanding and optimization of the semiconductor purchasing journey for IoT device manufacturers. The CEJM was instrumental in visualizing the end-to-end customer experience, identifying touchpoints, and highlighting areas for improvement. This framework proved invaluable for comprehensively understanding the customer journey, from awareness to purchase and beyond. Following this analysis:

  • Conducted in-depth interviews and surveys with current and potential IoT device manufacturer customers to gather data on their experiences at each touchpoint.
  • Mapped the current state of the customer journey, identifying pain points and moments of truth that significantly impacted customer satisfaction and decision-making.
  • Developed targeted initiatives to enhance the customer experience at critical touchpoints, prioritizing those with the highest impact on customer satisfaction and loyalty.

The VPC complemented the CEJM by focusing on aligning the company’s products with customer needs and wants. This framework helped in refining the value proposition of the semiconductors for IoT devices, making them more attractive to the target market. The implementation process included:

  • Identifying the jobs to be done, pains, and gains of IoT device manufacturers through workshops and market research.
  • Aligning the company’s semiconductor offerings with the identified customer jobs, pains, and gains to enhance the value proposition.
  • Adjusting marketing and sales strategies to communicate the refined value proposition more effectively to the target market.

The deployment of the CEJM and VPC frameworks led to a more nuanced understanding of the IoT device manufacturers’ journey and needs. As a result, the organization successfully optimized its customer journey, evidenced by a 15% increase in customer satisfaction scores and a noticeable improvement in customer retention rates within the first year of implementation.

Learn more about Customer Experience Value Proposition Market Research

Strengthen Supply Chain Resilience

For this strategic initiative, the organization applied the Demand-Driven Supply Chain (DDSC) model and the Supply Chain Operations Reference (SCOR) model. The DDSC model was chosen for its focus on creating supply chains that are responsive to market demands, a critical aspect in the volatile semiconductor industry. This approach was beneficial in making the supply chain more agile and capable of responding to sudden changes in demand or supply disruptions. The team implemented the framework through the following steps:

  • Assessed current supply chain operations to identify bottlenecks and inefficiencies that hinder responsiveness to market changes.
  • Developed a demand-driven planning process that incorporated real-time market data and customer feedback into supply chain decisions.
  • Implemented advanced analytics tools to improve forecast accuracy and supply chain visibility, enabling proactive adjustments to operations.

The SCOR model provided a comprehensive framework for measuring, managing, and improving supply chain performance across five key dimensions: Plan, Source, Make, Deliver, and Return. This model was instrumental in identifying performance gaps and areas for improvement. The implementation process involved:

  • Mapping the existing supply chain processes according to the SCOR model’s framework to benchmark performance against industry standards.
  • Identifying specific areas within the Plan, Source, Make, Deliver, and Return processes that required optimization to enhance resilience and efficiency.
  • Developing and executing targeted improvement projects for each identified area, leveraging best practices and technological solutions.

The application of the DDSC and SCOR models significantly enhanced the organization's supply chain resilience. The strategic initiative led to a 20% reduction in lead times and a 25% improvement in on-time delivery rates, demonstrating the effectiveness of the frameworks in strengthening supply chain operations and responsiveness.

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Accelerate Innovation in Energy-Efficient Semiconductors

To drive innovation in energy-efficient semiconductors, the organization employed the Kano Model and the Three Horizons of Growth framework. The Kano Model was utilized to categorize customer preferences into must-haves, performance attributes, and delighters. This insight was crucial for prioritizing R&D efforts towards features that would significantly enhance customer satisfaction. The implementation steps included:

  • Conducting comprehensive market research and customer interviews to identify and categorize the desired features of energy-efficient semiconductors.
  • Applying the Kano analysis to prioritize R&D projects based on their potential to meet customer expectations and differentiate the product in the market.
  • Adjusting the product development roadmap to focus on high-impact projects, ensuring alignment with customer desires and market trends.

The Three Horizons of Growth framework guided the strategic planning for long-term innovation, ensuring a balanced investment across immediate, medium-term, and future growth opportunities. This was achieved by:

  • Mapping current and potential R&D projects across the three horizons to ensure a balanced portfolio that addresses short-term improvements, medium-term growth opportunities, and long-term transformative innovations.
  • Allocating resources and establishing dedicated teams for each horizon, with clear goals and metrics to drive focused innovation efforts.
  • Creating a culture of continuous innovation by encouraging cross-functional collaboration and leveraging insights from the Kano Model to inform the innovation pipeline.

The strategic application of the Kano Model and the Three Horizons of Growth framework successfully accelerated the company’s innovation in energy-efficient semiconductors. This initiative resulted in the launch of three new semiconductor lines within two years, each exceeding market expectations for energy efficiency, and contributing to a 30% growth in revenue from new products.

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Key Findings and Results

Here is a summary of the key results of this case study:

  • Increased customer satisfaction scores by 15% following the optimization of the customer journey for IoT semiconductor purchasers.
  • Achieved a 20% reduction in lead times and a 25% improvement in on-time delivery rates by strengthening supply chain resilience.
  • Launched three new semiconductor lines, exceeding market expectations for energy efficiency, contributing to a 30% growth in revenue from new products.
  • Identified and implemented targeted improvements across Plan, Source, Make, Deliver, and Return processes, enhancing supply chain efficiency and resilience.
  • Improved customer retention rates noticeably within the first year of implementing customer journey optimization initiatives.

The strategic initiatives undertaken by the organization to optimize the customer journey, strengthen supply chain resilience, and accelerate innovation in energy-efficient semiconductors have yielded significant results. The 15% increase in customer satisfaction and noticeable improvement in customer retention rates are clear indicators of success in understanding and meeting the needs of IoT device manufacturers. The 20% reduction in lead times and 25% improvement in on-time delivery rates demonstrate the effectiveness of the supply chain resilience strategy. Furthermore, the launch of three new semiconductor lines and the resulting 30% growth in revenue from new products underscore the success of the innovation initiative. However, the report does not detail the impact of these initiatives on the overall market share or address whether the increased production costs have been mitigated. The absence of this information suggests that while the initiatives have been successful in specific areas, there may be underlying challenges that remain unaddressed.

Given the successes and areas for improvement identified, it is recommended that the organization continues to invest in customer journey optimization and supply chain resilience while also focusing on cost reduction strategies to address the increase in production costs. Further analysis should be conducted to understand the impact of these initiatives on market share. Additionally, exploring strategic partnerships or acquisitions could enhance supply chain capabilities and access to emerging markets. Finally, continuing to foster a culture of innovation, particularly in areas such as AI and machine learning, could further differentiate the company's offerings in the competitive IoT semiconductor market.

Source: Global Expansion Strategy for Semiconductor Manufacturer Targeting IoT, Flevy Management Insights, 2024

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