texas instruments and hewlett packard
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Om Sri Sai Ram
04/08/2023 Hewlett Packard and Texas Instruments Harish
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An offering at His Lotus Feet
Hewlett Packard and Texas Instruments
Harish Ramachandran09507
Company Background
Texas Instruments• Founded in
1935 by Bill Hewlett and Dave Packard
• Went public in 1947
Hewlett Packard• Founded by Cecil
H. Green, J. Erik Jonsson, Eugene McDermott, and Patrick E. Haggerty in 1947
Levels of strategy
• In which businesses one wants to be.• Allocating resources to the business to create value
Corporate level strategy
• Clarifying the boundaries of the business to be served• Selecting the competitive advantage to be pursued
Business level strategy
• Determining the basis one which the functions will serve the business unit objectives
• Integrating and coordinating these functions
Unit level strategy
Texas Instruments- Business Lines
Components
•Semi conductor integrated circuits•Semiconductor subassemblies•Electronic control devices
Digital Products
•Minicomputers•Personal computers•Scientific Instruments•Calculators
Government Electronics
•Radar systems•Missile guidance and control systems•Infrared surveillance systems
Hewlett Packard- Business Lines
Computer Products
•Factory automation•Engineering workstations•Data terminals•Personal computers•calculators
Electronic test and measurement
systems
•Minicomputers•Personal computers•Scientific Instruments•Calculators
Softwares, Systems and Peripherals
•PDAs•Servers•Networking services•Enterprise softwares
Business level strategy
Cost Leadership Differentiation
Functional Strategies: Texas Instruments
•High volume low price
•Rapid growth
•Standard products
marketing
•Economies of scale
•Vertical integration
•Learning curve
Manufacturing
•Process and product
•Cost driven
•Design to cost
R&D
•Aggressive
•Full utilization of debt
•No slack
Financial
•Competetive personnel
•Individual incentives
•layoffs
Human Resources
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Functional Strategies: Hewlett-Packard• High value-high price• Controlled growth• Custom features
Marketing
• Limited vertical integration• Small attractive locationsManufacturing
• Product only• Quality driven• Design to performanceR&D• Conservative• No or low debt• Margin of safetyFinancial• Cooperative• Company wide group incentives• No layoffs
Human Resources
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Why this difference??
Approaches to Strategic Planning
2 Main Approaches
Portfolio based Content Approach
•Rational and analytical•Portfolio positioning is the key•CEO is the strategist•unique business and functional strategies•changes are competitor and opportunity driven
Value based incremental
Approach•Logical and incremental•Management beliefs are the key•CEO sets the values•Generic business and functional strategies•Changes based on practicality and acceptability to the organization
Eg. Texas Instruments Eg. Hewlett-Packard
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Product life cycle
Early entry and market leader Create new markets and harvest
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Costs and prices
Continuous cost reduction and price penetration
Price skimming
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Product/Process Matrix
Capital intensive and cost effective production Lean production and customization
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Positioning and Resource movement
Invest in ‘question marks’ build in ‘stars’ and harvest in ‘cash cows’ Identify and create ‘stars’
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Management control systems
Performance evaluation
systems
Incentive compensation systems
Strategic planning systems
Reporting systems
Budgeting systems
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Strategic planning systems
Texas Instruments
•Top down approach•External:Competitive status•Internal: Organizational innovativeness •Top management as strategists.
Hewlett -Packard
•Bottom up approach•External: Technical superiority•Internal: Organizational Health•People Involvement
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Strategic planning systems
Texas Instruments
•Pricing strategy: Market-Penetration• Resource Allocation: towards manufacturing
Hewlett -Packard
•Pricing strategy: Market- Skimming•Resource Allocation: towards marketing and R&D
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Budgeting systems•Manufacturing•Engineering in products and processes•Cost reduction management•Cost savings
Texas Instrumen
ts
•New product development•Marketing•Research and Development
Hewlett -Packard
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Reporting Systems•Integrated divisions•Control and coordination among divisions•Corporate level staff
Texas Instruments
•Autonomous divisions•Authority to the divisions w.r.t resource usage•Division level staff
Hewlett -Packard
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Performance Measurement and incentive compensation Systems
Texas Instruments
• Based on cost reduction achievement• Marketing: Based on amount of sales and profit
Hewlett -Packard
• Based on the inventiveness of every component• Marketing: based on amount of sales and profit
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Performance Measurement and incentive compensation Systems
Texas Instruments
• Individual evaluation• Internally competitive• Incentives :
• Bonuses on achieving a certain of sales target or cost reduction target
Hewlett -Packard
• Team evaluation• Internally cooperative• Incentives:
• A portion of the resultant sales from the ideas generated and implemented
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Thank you
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