Texas Instruments Case Analysis

923 Words 4 Pages
TI current strategy to focus in customer and involve earlier into customer’s product life cycle, differentiate itself with rivals.
TI sales grow faster than industry average. The firm’s image and reputation grows stronger, TI profit margin increase and better than industry. The net profit and return on investment grow stably. The overall financial strength improves. TI can create the premium value to customer by providing additional service to help customer to solve issue and delivery when customer need. The key measures of operating performance remained steady. All of above indicate the Texas Instruments overall performance well with a well-defined and well executed strategy.
4.0 Strategic Issues Analysis
4.1 Critical Challenges
The success
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The differentiation-based competitive advantage could be realized by deployed the valuable and rare resource into value chain for competitive advantage. Texas Instruments has strong research & development team to develop the new product to meet its client innovation. It might be better to outsource its logistic activities to professional companies since Texas Instruments have a lot of global business. Texas Instruments need to develop a strong government relationship team in countries that has business to respond for the challenge in complex law, regulation and policies.
4.3 Strengths or weaknesses analysis
Texas Instruments has strong R&D capabilities. The Apollo landed in moon with Texas Instruments provided product. It launches the new innovative solutions in last couple of years by consistent R&D investment. The company total R&D expense is 1.5 billion in 2013 and 1.9 billion in 2012. In 2013, the R&D expense accounts for 12. % of Texas Instruments’ revenue. TI also has robust manufacturing capability. Texas instruments own and operate large semiconductor manufacturing facilities all over the world. It has the strongest manufacturing capability in analog market.
Texas Instruments also operates design centers strategically. It provides design, engineering, product application and customer services close to customer. It allows the fast delivery and short the innovation life cycle.
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The company’s operating margin was 23.2% while the competitor Qualcomm’s operating margin is 29.1%. Lower margin will be constrain the TI’s R&D investment and further more impact its sales since it rely on R&D to catch the market share. A major weakness for Texas Instruments is the prices competition in the market. When semiconductor price are high, TI reports for sale under expectations due to fluctuations rate and weak demand in the market. However, the sensitivity of pricing to capacity utilization is different for different segments of the industry. The most sensitive segment is the memory segment since memory is a price-elastic

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