Hp vs Ti Differs in Strategies Essay

1202 Words Jun 24th, 2014 5 Pages
Chapter 1 3

Controls for Differentiated Strategies

597

Case 13-3

Texas Instruments and Hewlett-Packard
Texas Instruments (TI) and Hewlett-Packard (HP) developed, manufactured, and sold high-technology electric and electronic products. Texas Instruments had three main lines of business in 1984: components, which includ ed semi conductor integrated circuits, semiconductor subassemblies, and electronic control devices; digital products, which included minicomputers, personal com puters, scientific instruments, and calculators; and government electronics, which included radar systems, missile guidance and control system s, and in frared surveillance systems. The three businesses generated 46 percent, 19 percent, and 24 percent,
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Reprinted by permission of Steven C. Wheelright, “Strategy, Manag ement, and Strategic Planning Approaches,” Interfaces, January—February 1984, pp. 19—33. Copyright 1984 by the Operations Research Society of America and The Institute of Management Scienc es, 290 Westminster Street, Providence, Rhode Island 02903, USA.

598

Part Three

Variations in Management Control

EXHIBIT 2

Contrasting Strategies of TI and lIP Texas Instruments Business Strategy Competitive advantage for large, standard markets based on long-run cost position Competitive advantage for selected small markets based on unique, high-value/high-features products Functional Strategy Hewlett-Packard

Marketing: Manufacturing: R&D: Financial:

High volume/low price Rapid growth Standard products Scale economies and learning curve Vertical integration Large, low-cost locations Process and product Cost driven Design to cost Aggfessive Higher debt light ship

High value/high price Controlled growth Custom features Delivery and quality driven limited vertical integration Small, attractive locations Product only Features and quality driven Design to performance Conservative No debt Marg!n of safety (slack)

both Texas Instruments and Hewlett-Packard.

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