Essay On ADI Strategy In Mid-80's

2342 Words 10 Pages

ADI is one of the top IC manufacturers. During the period 1981-1996, ADI experienced growth and stagnation, both record profits and sales with its first loss ever experience. ADI introduced many different management tools to implement change in order to comply with the changing market. One such tool was its corporate scorecard, concept of half-life, TQM (Total Quality Management), QIP (Quality Improvement Program).


Q1. What was ADI’s strategy in the second half of 1980s?
The major challenges faced by ADI in mid-80’s are:
• Decline in sales of Analog IC’s by about 5 %.
• Profits declined by 38 %
• Schedule overrun- The company missed 40 % of its delivery dates
• Defect level of the Product was more than
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• QIP measures were not given considerable importance as these are mere possibilities to achieve greater financial measures. Goals of the QIP were not reflected in the financial system (FS) and FS can’t be used to measure the QIP results.
• The QIP measures the defects level, which isn’t shown in the financial system. FS numerical values should be believed because they would be used publicly and they measure the company’s overall performance.
• In reality, the QIP measures and the financial system could be reconciled. For example, warranty costs, returns on defect, or penalty for not satisfying customers’ needs can be added to the financial statements to reflect the QIP measures.

Q.4. Critically assess the usefulness of the information contained in the corporate scorecard in Exhibit 3 as a way to implement Analog Devices' strategy. What role does each set of measures play in strategy execution? What should be the relative importance of financial versus nonfinancial measures? What additional information would you like to see included in the

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