Introduction to Analog Devices Inc - Research Paper Example

?Introduction Analog Devices Inc. (ADI) was established in 1965. Its headquarters are near Boston, in Norwood, Massachusetts. Its common stock is listed on the New York Stock Exchange, or NYSE, under the symbol ADI, and it is included in the Standard & Poor’s 500 Index. It designs, manufactures, and markets a wide line of high-performance ICs that incorporate analog, mixed signal, and digital signal processing technologies (Analog, 2011, p.3). It sells its products all over the globe through a direct sales staff, third-party distributors, independent sales representatives, and its website (Analog, 2011, p.7). It operates in one kind of segment, which is made of two distinct groups: one on products and one on end markets (Analog, 2011, p.3). The product group is concentrated on “core technology development and leadership in converters, amplifiers and RF, MEMS, power management, and DSP” (Analog, 2011, p.3). The end market-focused organization is focused on understanding, choosing, and resourcing activities that are more customized to specific markets or applications (Analog, 2011, p.3). ADI has direct sales offices, sales representatives, and distributors in more than 40 countries that are located outside of North America (Analog, 2011, p.7). Its products are used by more than 60,000 customers around the world (Analog, 2011, p.2). Total revenues in 2011 were $2.993 billion with net income of $867.4 million (Analog, 2011, p.26). Gross margin % is 66.4%, compared to 65.2% in 2010 (Analog, 2011, p.27). It has a market capitalization of $10.91 billion. ADI’s main strategy is to apply the wide array of its broad “technology portfolio to more integrated and targeted product strategies for the industrial, automotive, consumer, and communications markets” (Analog, 2011, p.3). Vision, Mission, Goals, and Objectives The vision of ADI is to be the global leader in the industry. Its mission is “to be the world’s best signal processing company” (Analog, 2011, Letter from Jerald G. Fishman). Its primary goal is “to manage a growth business and a product portfolio that is essential to myriad applications, resulting in a long-term compounded annual growth rate (CAGR) for ADI that is greater than that of the overall semiconductor industry” (Analog, 2011, Letter from Fishman). Its research and development strategy concentrates on enhancing technical leadership in “core technologies of converters, amplifiers and RF, MEMS, power management, and DSP” (Analog, 2011, p.7). To support its research and development activities, ADI hires thousands of engineers, who are in charge of the product and manufacturing process development (Analog, 2011, p.7). ADI seeks to outpace the industry by enhancing how it targets markets, where its technology produces a competitive advantage for its customers (Analog, 2011, Letter from Fishman). To support this growth, it aims to generate excellent signal processing products through investing in research and development. It also seeks to optimize and to refine these investments to most successfully direct resources to opportunities that present ADI the strongest potential for differentiation, development, and profitability (Analog, 2011, Letter from Fishman). In addition, ADI focuses on protecting its standing as “one of the highest quality and most reliable vendors in our customers’ supply chains” (Analog, 2011, Letter from Fishman). It does this by maintaining short product delivery lead times and quickly scaling production levels to meet demand, as well as offering high quality levels of service that is responsive to customers’ needs (Analog, 2011, Letter from Fishman). It also upholds the goal of maintaining the company’s profitability, however cyclical the semiconductor industry might be (Analog, 2011, Letter from Fishman). Its operating model consists of major variable costs that assisted the company in attaining high margins, during both the economic downturn and upturn (Analog, 2011, Letter from Fishman). Competitive Analysis NVIDIA NVIDIA was incorporated in California in April 1993. Its headquarter facilities are in Santa Clara, California. NVIDIA has extensive sales and marketing channels that work with “industry's OEMs, original design manufacturers, or ODMs, system builders, motherboard manufacturers, add-in board manufacturers, or AIBs and industry trendsetters” (INVIDIA, 2011, p.7). It has three main financial reporting segments – “GPU Business; Professional Solutions Business, or PSB; and Consumer Products Business, or CPB” (INVIDIA, 2011, p.5). Revenue was posted at $4.00 billion for fiscal year 2012 and $3.54 billion for fiscal year 2011, an improvement of 12.8% (INVIDIA, 2011, p.45). Its gross margins were “51.4%, 39.8% and 35.4% for fiscal years 2012, 2011 and 2010, respectively” (INVIDIA, 2011, p.46). It has market capitalization of $ 8.935 billion. NVIDIA’s main strategy is to uphold technology and product leadership in visual computing, to press forward in mobile computing with high-quality ultra-low power system-on-chip processors, to transform high performance computing with Tesla and CUDA, and to utilize its intellectual property and resources to enter into license and development contracts (INVIDIA, 2011, pp.6-7). Altera Altera is founded in 1983. Its headquarters facility is located at 101 Innovation Drive, San Jose, California 95134. Its common stock trades on the NASDAQ Global Select Market under the symbol ALTR. Altera is a global semiconductor company that serves around 13,000 customers in the “Telecom and Wireless, Industrial Automation, Military and Automotive, Networking, Computer and Storage, and other vertical markets,” where the “vertical market includes sub-markets of broadcast, consumer, medical and test” (Altera, 2011, p.5). Revenues reached $2.064 billion in 2011, with net income of $770 million (Altera, 2011, p.28). Revenues jumped by 6% in 2011 from 2010 (Altera, 2011, p.33). Altera has market capitalization of $13.4 billion. Its strategy concerns the “displacement of ASICs and ASSPs in the development of next generation electronic systems” (Altera, 2011, p.8). It also frequently engages in a strategic review of its business to recover operations and financial returns. It is concentrated on optimizing return on invested capital by going after greater efficiencies in all avenues of its operations, while finding balance with its dedication to continued investment in advanced technology for the creation of new products. LSI Corp. LSI Corp. is incorporated in California on November 6, 1980 and reincorporated in Delaware on June 11, 1987. As of December 31, 2011, it had 4,588 full-time employees (LSI, 2011, p.8). LSI designs, develops and markets “complex, high-performance storage and networking semiconductors” (LSI, 2011, p.1). It offers a wide array of “capabilities including custom and standard product integrated circuits that are used in hard disk drives, solid state drives, high-speed communications systems, computer servers, storage systems and personal computers” (LSI, 2011, p.1). Total revenues increased from $1.8 billion in 2010 to $2.044 billion in 2011 (LSI, 2011, p.23). Gross profit as a proportion of revenues stayed flat in 2011 as compared to 2010, which is 47.1% (LSI, 2011, p.24). LSI has market capitalization of $3.5 billion. Its main strategy is to develop competitively priced products that offer “superior features, performance or levels of integration” (LSI, 2011, p.5). References Altera. (2011). Form 10-K. Retrieved from http://investor.altera.com/phoenix.zhtml?c=83265&p=irol-reportsAnnual Analog Devices. (2011). Form 10-K. Retrieved from http://files.shareholder.com/downloads/ADI/1959214609x0x552959/A8C3D0BD-161F-4C79-AE39-66E3F98FD511/AnnualReport2011.pdf LSI Corp. (2011). Form 10-K. Retrieved from http://www.lsi.com/about/investors/pages/sec.aspx NVIDIA. (2011). Form 10-K. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=116466&p=irol-sec Read More