Title: Ambarella, Inc.: Positioning Strategy for CV2 Vision Processing Chip
Subject Area: Positioning strategy, competitive strategy
Region: United States
Industry: Image Processing Industry
Company: Ambarella, Inc.
Challenge: Ambarella, Inc. is a fabless semiconductor design company with a focus on low-power HD video compression, image processing, and computer vision processing chips. They are headquartered in Santa Clara, California at the heart of Silicon Valley, where many of the nation’s leading technology firms are also based. For this consulting report, we assessed the positioning challenge that Ambarella faced with its new product: the CV2 vision processing chip. CEO Fermi Wang debuted this new product at the annual Consumers Electronics Show (CES) in 2020. The technology industry in which Ambarella competes is dynamic and constantly evolving, making it difficult for companies to gain and sustain a competitive advantage. In our report, we have provided our recommended approach for Ambarella to position this product for success in this complex industry.
Investing in Personal Capital: Elucidating the Professional Core
Our team consists of five members of the D’Amore-McKim Business School at Northeastern University. We leveraged our diverse specialties in various areas of business, combined with our knowledge from experiences during co-op (a work-study program), to create a comprehensive and interdisciplinary analysis of this case for our client.
Investing in Social Capital: Embedding in Industry
Our data was entirely derived from secondary sources. We used publicly available data about Ambarella from statements published in their Annual Report, 10K and Schedule K-1 forms, and transcripts from earnings calls. We supplemented these with external industry reports from analysts published online. We used these sources in conjunction with frameworks derived from our Strategy in Action course to form our recommendation. These strategic frameworks include: SWOT, PESTLE, Porter’s Five Forces, Porter’s Generic Strategies, VRIO analysis, and analysis of the Industry Life Cycle.
Investing in Professional Capital: Solution and Findings
Our goal was to determine a niche market within the technology industry for Ambarella to market and position their new product. Currently, the company markets its product for the automated vehicle and drone industries, which have become crowded with competitors in recent years. Through our analysis, we found that the medical and healthcare industry is in a stage of rapid growth, which will allow Ambarella to pursue a blue ocean strategy for the CV2 chip.
Specifically, we recommend that they market this product for surgical robotics via long-term licensing contracts with leading firms producing these systems.
Robotics-assisted surgical systems is an emerging market and the companies that create these systems will require high-capability vision processing chips like the CV2. We believe that advancements in these surgical systems run in parallel with the advancements that Ambarella has made in the technology industry with their disruptive innovation: the CV2 chip.