From “uninvestable” to profitable: Learn how this CEO turned a struggling company around!

Monday: MicroBusiness and Marketing Marvels FROM THE DESK OF MILES EVERSON: Happy Monday, everyone! We hope everything is going well in both your personal life and work life. Let’s start the week with our “Marketing Marvels” where we talk about outstanding people in the fields of business and marketing. Every Monday, we highlight these people’s experiences, contributions, and insights in their respective fields. Today, we’ll talk about a business executive who turned her struggling company around. Keep reading to know more about this “Marvel” and what she can teach us about business and marketing. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

From “uninvestable” to profitable: Learn how this CEO turned a struggling company around! Lisa Su: CEO of AMD In 2012, Advanced Micro Devices (AMD), one of the world’s largest semiconductor companies, struggled to remain afloat. That year, it lost over USD 1 billion and had nearly USD 2.5 billion in debt. Additionally, its stock price plummeted to a historic low of less than USD 2. Because of these problems, a stock analyst declared the tech firm “uninvestable.” To make things worse, bankruptcy rumors started to circulate. Do you know what AMD and its leadership team did to address the situation? The executives of the tech giant decided to restructure the company. As part of this process, the company cut 15% of its global workforce in 2012 and after 2 years, a new Chief Executive Officer was appointed. The name of this executive is Lisa Su, who is also the current president of AMD. Prior to occupying these positions, she was the tech firm’s Senior Vice President and General Manager for its global business units. Su obtained her bachelor’s, master’s, and doctorate degrees from The Massachusetts Institute of Technology (MIT). Additionally, she has over 15 years of experience in the semiconductor industry, having occupied various engineering and management positions at Texas Instruments, Freescale Semiconductor, and International Business Machines (IBM). Turning a Struggling Semiconductor Company Around When Su was handed control of AMD, the tech firm was going through a challenging period. Aside from financial problems, the company was facing stiff competition from its rivals. In spaces such as computer and graphics processing, AMD lagged behind Intel Corporation and NVIDIA Corporation in both business and consumer markets. Due to her company’s situation, Su decided to focus the firm’s resources on designing powerful computer processors and graphics chips for gaming, artificial intelligence, and consumer and enterprise applications. As a result, the firm abandoned its plans to develop products for the mobile phone market and devices for the “internet of things.” [Internet of things - A system of interconnected devices facilitating data transmission without the need for human-to-human or human-to-machine interaction.] After years of development, AMD announced the “Ryzen” product line in 2016. This new brand of central processing units (CPUs) was designed for use with personal computers (PCs), servers, and workstations. In the same year, the firm also released a new generation of “Radeon” graphics processing units (GPUs). The reception to the new CPUs was positive. Gordon Mah Ung of PCWorld praised “Ryzen” for delivering great performance at relatively low prices. The next-gen “Radeon” GPUs received similar praises as well. Because of the pricing and performance of AMD’s products, the company’s offerings attracted lots of consumers throughout the years. This increase in popularity led to better financial performance as well. As of January 2023, the company’s stock is priced at USD 71, a massive increase from the less than USD 2 valuation in 2012. The Secret Behind the Turnaround AMD’s recent success and resurgence can be attributed to Su’s understanding of her company’s core competencies and target market. When asked about the reasoning behind her biggest decisions as CEO, Su said: “It is really important when you’re a technology company to decide what you are really, really good at because you have to be the best, number one or number two.” Once she knew what AMD was good at, she focused the company’s resources on those capabilities. Subsequently, she analyzed the unfulfilled need of the firm’s target market. What was this unmet need? The need for great performance at affordable prices. While Intel and NVIDIA were selling high-performance products at the time too, there were consumers who couldn’t afford them or were unwilling to buy those offerings because of the companies’ asking price. Su saw an opportunity to capture a significant chunk of its target market. As a result, building great products at affordable price points became the guiding principle in the design and creation of AMD’s compute and graphics solutions. — There are valuable insights you can learn from AMD’s successful turnaround: For you and your business to do well, you have to fulfill the unmet needs of your target market. Knowing what your customers need or want will allow you to create offerings that will cater to them. Once you’ve identified what your customers need, you have to come up with a suitable strategy in marketing and selling your products. After all, for consumers to buy your offerings, their attention—in one way or another—has to be captured. … but what if you’re having a hard time capturing your target market’s attention? Another way to attract customers is through pricing. More often than not, consumers will buy a more affordable product if the offering gives buyers what they need at a lower price. Overall, coming up with ways to capture a significant part of your target market can be challenging. So, if you haven't yet, consider integrating these insights in your own product development and sales strategies. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn.     Stay tuned for next Monday’s Marketing Marvels! What comes to your mind when you hear the words, “viral content?” Learn more about Jonah Berger and his STEPPS framework on next week’s Marketing Marvels!