Business Model and Strategic Plan Essay Example for Free

Business Model and Strategic Plan EssayFor more than four decades, the semiconductor unit industry has imposing itself by the rapid pace of improvement in its products. Trends have resulted principally from the industrys ability to exponentially decrease the minimum acture sizes employ to fabricate structured circuits and other products. Of course, the most frequently cited trend is in integration direct, which is usually expressed as Moores Law (that is, the number of components per laid-backtail it doubles roughly every 24 months). The most signifi toleratet trend is the decreasing cost-per-function, which has led to signifi green goddesst improvements in stinting productivity and overall persona of life throughproliferation of computers, communication, and other industrial and consumer electronics. All of these improvement trends, sometimes called scaling trends, have been enabled by large RD investments. In the last three decades, the evolution size of the petitiond investments has motivated industry collaboration and spawned many RD partnerships, consortia, and other cooperative ventures. To help guide these RD programs, the semiconductor unit Industry Association (SIA) initiated The National applied science Roadmap for semiconducting materials (NTRS), which had 1992, 1994, and 1997 editions.In 1998, the SIA was joined by corresponding industry associations in Europe, Japan, Korea, and Taiwan to participate in a 1998 update of the Roadmap and to begin work toward the first transnational Technology Roadmap for semiconductor units (ITRS), published in 1999. Since then, the ITRS has been updated in even-numbered years and fully revised in odd-numbered years. The overall objective of the ITRS is to present industry-wide consensus on the best current hazard of the industrys question and development needs out to a 15-year horizon. As such, it provides a guide to the efforts of companies, universities, governments, and other research providers or funders. The ITRS has modify the tincture of RD investment decisions made at all levels and has helped channel research efforts to aras that most need research breakthroughs. It is forecasted that by the end of this next decade (2019) it go away be necessary to augment the capabilities of the CMOS handle by introducing multiple wise devices that leave hopefully realize some properties beyond the ones of CMOS devices.However, it is believed that most presumable these new devices go awaying not have all the properties of CMOS devices and therefore it is anticipated that heterogeneous integration either at the chip level or at the package level impart integrate these new capabilities around a CMOS core. The participation and continued consensus of semiconductor experts from Europe, Japan, Korea, Taiwan, and the U.S.A. ensure that the 2011 ITRS remains the definitive source of guidance for semiconductor research as we strive to extend the historical advancement of semicond uctor technology and the integrated circuit market. ON Semiconductor sess was formed in 1999 and acquired Cherry Semiconductor the next year. In the next six years, from 2005 to 2011, the caller-out opened seven Solution Engineering Centers in Korea, Oregon, Taiwan, and Germany, California, China, and Japan. In addition, the friendship also acquired tencompanies, to wit LSI Logic Gresham, Oregon Design Manufacturing Facility, ADI Voltage Regulation Thermal Management Group, AMI Semiconductor, Catalyst Semiconductor, PulseCore Semiconductor, California Micro Devices, Sound Design Technologies, Cypress Image demodulator Business Unit, and SANYO Semiconductor.The Application Products Group offers analog, mixed-signal, and advanced logic application particular integrated circuits (IC) power conversions and interfaces between AC and DC. The Standard Products Group offers discrete and integrated semiconductor products, such as power switching, signal conditioning and amplificatio n, circuit protection, and voltage reference. The SANYO Semiconductor Products Group offers microcontrollers, analog and digital tuners and signal processing, and memory semiconductors. In 2013, the company introduced the industrys highest resolution optical word picture stabilization (OIS) integrated circuit (IC) for smartphone camera modules.Strategic Plan Part I Conceptualizing in BusinessA solid strategic epitome is beneficial to shareholders, employees, customers, and decisions makers within a company. The core of an effective strategic plan contains a well-thought and informative mission statement. Using the ON Semiconductor corporationoration as a benchmark, a mission statement has been developed to differentiate the companys products from the competition. In addition, the visual sense statement as plays an burning(prenominal) exercise in communicating the ultimate goal of the companys strategic decisions. A driving force behind the mission and vision is the companys s et and ethical principles, which often dictate the choices made during strategic planning. When it is fully implemented, the strategic plan will allow ON Semiconductor Corporation to gain a strategic advantage over its indicateed competitors.Mission StatementWe will transform ON Semiconductor Corporation from a traditional broad-line semiconductor company to the leading supplier of programmable solutions in systems everywhere. Semiconductor consolidation is the recent trend of semiconductor companies collaborating in order to come to a practical synergy with the goal of being able to operate in a line of reasoning model that can sustain profitability. Newly established solutions will be able to supplylocal communities with quality products at private-enterprise(a) prices while simultaneously creating mensurate for shareholders.Vision StatementON Semiconductor Corporation will grow into the largest provider in emerging markets. The brand will have an established figurehead in As ia, South America, and Europe with locations being found within the top 10 major cities on these continents. By saturating the worlds most populous metropolitan cities, ON Semiconductor Corporation will be the most recognizable Corporation in the world.Guiding Principles, Values, and CultureON Semiconductor Corporation has several serious ethical principles that influence major decisions in the strategic planning process. First, the company is concern about making quality products available to the lowest income groups. Therefore, it is important to keep a wide endurance of low cost products available on the market. This becomes an especially important consideration as we expand in markets that experience high levels of economic struggle. Second, the company is committed to delivering exceptional customer advantage to its patrons. Customer patrioticty is a driving factor towards the long success of the brand. helplessness to deliver exceptional customer service could seriousl y hinder the ability to grow into new markets. In order for employees to express ON Semiconductor Corporations guiding principles, it is essential to become a corporeal culture that reflects these principles.Providing ample opportunity for advancement within management hierarchy and the ability to participate in supplemental training will keep employee motivation high. As a result, employees will be eager to follow the ethical values set forth in the strategic plan. It is likely that the company will need to make slight modifications to organization culture to meet the preferences of various world cultures.Impact on Strategic DirectionThe mission, vision, and values of ON Semiconductor Corporation serve as the foundation for strategic decision making while the company gears up for expansion. When an unexpected variable causes a change in direction, the company will continue to use its mission as a guide for future choices. The primary mission is always to maximize shareholder prof its, hardly the valuesdetermine the approach the company will take to achieve this goal. Overall, this will help the company build a corporate culture in these new markets that gains the respect of the community. If the company is considered to be helping the local community, the chances of creating an effective strategic plan are highly unlikely.Addressing Customer demandExpanding into emerging markets presents a unique challenge to address customers needs. Every country exhibits its own unique culture and it is essential to pander to the preferences of distributively individual culture. A system that works in the United States is not likely to see the same level of success in Bangladesh, unless serious modifications are made to the business model. To overcome this challenge, the company will conduct independent research and use paid consultants to determine how to tailor the brands image for success in vastly different cultures. As time progresses, the company will be able to a ssess strengths and weaknesses by testing different models in each regional area. Gaining insightful knowledge about each countrys cultural preferences will allow the company to attain a competitive advantage.The nature of strategic management today is seen in the environment-driven strategies of successful firms competing in a diverse market. We must understand that faulty assumptions and false information can result in the formulation of poor or even disastrous plans, and change is constant and continuous that yesterdays good plan may not be relevant or of any value today (Pearce Robinson, 2009). We have to realize that we live in a changing world and business organizations, governmental units and other entities, just like people, have to adjust and adapt to survive.Strategic Plan Part II SWOTT depth psychologySWOTT analysis of ON Semiconductor Corporation is one of the most important components. By providing quality products and prices, the corporation has established a world wide presence. This SWOTT analysis shows the various strengths, weaknesses, opportunities, threats, and trends that will impact the company in the future. With promising growth prospects in emerging markets, the company has implemented an aggressive plan to be establishedthroughout the world. This schema poses several important risks and opportunities that shape the contents of the SWOTT analysis.Economic TrendsEconomic trends play a major role in the strategic decisions. The brand has an ambitions global growth plan that is unsanded to economic changes. For example, the company reports that China and India are its main targets for new locations and expects to see remarkable growth as economic conditions improve. As income levels rise in these countries, it is expected that new owners will be eager to implement proven concepts into the local community. In addition, high incomes will provide greater opportunity for a loyal customer base. However, if economic conditions start on a downward trend then an aggressive expansion could be threatened by lean demand for their product. If franchise owners are not finding the locations profitable, it could create irreparable damage to the companys image abroad and force the closure of new locations.Legal and Regulatory ForcesEach new emerging market presents a unique mix of regulatory and legal challenges. For example, the company must adhere to specific prescripts. Any major violations could create a major backlash to the brand to that could prevent future growth in the country.Supply stove OperationsMaintaining a consistent product is key to building customer loyalty for ONs. Customers expect to purchase an identical product each time they make transactions with their company. In order to make this possible, the company has a sophisticated supply chain network in place to ensure every location has products available. This feat is achieved by utilizing regional distribution networks that supply owners with the pr oper equipment. Building a distribution network in overseas markets is significantly more risky than the United. unsung distributer and freight companies must be chosen by the company to handle these important operative tasks. In the future, ONs will be able to establish a strong supply network to minimize the threatsfaced in international supply chain operations.Opportunities Based on SWOTT AnalysisThe greatest opportunities for ONs can be achieved by differentiating the brand from its main competitors. Primary competitors to ONs market share include Intel Corp, Texas Instruments, Altera Corp and Xilinx Inc., which have established a dominating presence in international markets over the last several decades. ONs has the ability to demonstrate value to their customers by delivering a product that is completely unique from most other companies. A marketing plan that outlines their unique experience that ONs offers will help penetrate markets that are already occupied by competing c ompanies. ONs also has a great opportunity to achieve new innovations that can reduce labor costs.By implementing technology that can automate the duties of employees, the company can increase its operational efficiency. The company can also reduce operational costs within the supply chain by drawing on experiences in the US market. Building a new supply chain in an emerging market will allow the company to design it in the most cost effective manner. Each of these opportunities will play an important role in strategic success of the brand.SWOTT Table External FactorsFactorStrengthsWeaknessesOpportunitiesThreatsTrendsGlobalONs has an established image in overseas marketsSupply Chain management requires additional investment to establish in global marketsMassive new markets in Asia, especially China and IndiaPolitical unrest in African and Middle East MarketsGrowing markets overseas will provide exception growth opportunities Economic meliorated economic conditions will provide suita ble owners.greater disposable income will prompt some acquires to seek more expensive alternatives. Commercial real estate recovery will provide more eating placelocations domestically. Economic collapse and rising materials costs could impact prices. Global economic recovery is remaining consistentLegal and RegulatoryStrong safety learnNew global markets present new regulatory challengesEstablish strong relationships with foreign business partners Legal costs for breaking foreign regulations adjoind regulation in the the States could raise labor costs.EnvironmentalStrong history of supporting clean environment practicesIncreasing public disapproval in the USAShow a commitment to environmental friendly initiativesEnvironmental infractions could create media backlashConsumers place greater importance on environmental initiatives. Competitive AnalysisONs unique product line separates it from the competition Stronger brands, such as NXP have more overseas locationsDifferentiate from competing brandsClosely related brands establishing locations in emerging markets. Most major brands and expanding globallySWOTT Table Internal FactorsFactorStrengthsWeaknessesOpportunitiesThreatsTrendsStrategyAggressive strategy will provide rapid growth fast growth could cause investment in new innovations to lag behindContinue to build presence in emerging markets.Aggressive strategy may be rejected by some culturesAsian countries are showing increasing demand for electronicsTechnologiesOptimized efficiency for product processingTechnology still requires significant human capitalAutomation to cut down on manual labor needsCompetitors may develop tech at a high-velocity paceTechnology is decreasing in cost overallInnovationsSocial media marketing in place to build customer loyaltyCompetitors are whirl items that appeal to higher qualityAutomate payment processing for rapid orderingNegative media coverage could spread on social mediaCustomers prefer products that efficientIntel lectual PropertyONs brand is recognizable worldwideBrand is associated with low quality budget oriented products Increase awareness of high quality itemsUse of IP by foreign competitors without legal recourseInternet makes it possible to market the product rapidlySummaryONs faces a complex set of challenges as they conduct their aggressive expansion into emerging markets. Ahead of all, the global economic climate poses the greatest risk to the company, as major changes could have a significant impact on the strategys effectiveness. However, competitive pressure dictates that ONs must establish its presence in overseas markets as soon as possible. If the company waits to establish new locations, it many lose the opportunities provided by the current trend of global economic growth. The SWOTT analysis above provides insight that will help the brand mitigate risk as it continues to move forward with the strategy.Strategic Plan Part ternion Balanced ScorecardAs a method of further anal yzing the strategic goals of ON Semiconductor Corporation, the balanced scorecard provides valuable insight into vision, mission, and values of the company. An analysis from the perspective of shareholders, customer, managers, and employees allows the company to gain astronger understanding of how strategic initiatives will affect these relationships. Each strategic initiative can have a differing impact, depending on the relationship a person has with the company. A strategic initiative aimed at lower costs might be beneficial to shareholders in the short term, but could have a negative impact on customer and employee values. The balanced scorecard attempts to organize strategic objectives based on their specific relationship to ON Semiconductor Corporation.Shareholder Value or Financial PerspectiveObjectivesTargetsMeasuresRisk MitigationIncrease customer base by expanding product varietyIncrease domestic revenue by 10% with a new product line over 5 years A trend of 0.5% growth in domestic sales per quarter.Test new items in a limited number of locations to determine nationwide viability. Decrease international supply chain costs. get off supply chain costs in international markets by 5% over 2 years This objective should also result in higher operating margins Invest in long-term solutions to supply chain management.Improve price-to-earnings ratio.The current PEG ratio sis 9.05 (NASDAQ 2014) and should be increased to 1.50 A every quarter trend of improvement should be seen in the PEG ratio. Expand into international markets that present the highest overall value.Customer Value PerspectiveObjectivesTargetsMeasuresRisk MitigationImprove company image by marketing new productsIncrease customer recognition of new product offerings.Growth of new product sales of 10% relative to traditional products. Conduct custom surveys to gain insight into new product reception. Improveoverall customer serviceIncrease positive feedback from loyal customersImprove customer fe edback by 25% over 1 year.Implement an employee training program focused on customer service Implement delivery to large marketsMake ONs products available with rapid delivery.Implement ONs delivery in at least 5 US citiesTest the delivery system in limited markets before mainstream launchProcess or Internal Operations PerspectiveObjectivesTargetsMeasuresRisk Mitigation contour payments with mobile devicesAllow customers to pay with mobile devicesEnable mobile POS systems at 25% of locationsSurvey customer preferences for mobile paymentsIncrease ordering speed with improved automation.Eliminate need for full time staff by automating production. Reduce total labor costs by 5% over 2 years. jibe long term ROI of investment in automationLearning and Growth (Employee) PerspectiveObjectivesTargetsMeasuresRisk MitigationOffer new opportunities for advancement within the companyPromote more internal employees to middle manager positionsTrack the progression tenured of employees within the management hierarchy. Implement a training program for employees who proneness management positions Improve corporate culture with social mediaAllow greater communication at all levels of company25% employee participation on ONs blog conversationsMonitor and track system to ensure conversations are beneficialSummaryStrategic initiatives are always associated with a certain level of risk. As an internationally recognized brand, it is essential for ON Semiconductor Corporation to make an effort to safeguard its image with any new strategic choice. Failing to maintain the image that has been developed could lead to a decreased ability to move forward with international growth of the brand. In addition, many of the strategic goals require a significant financial investment. Any large financial investment should show promise of delivering long-term value to shareholders. This is especially important in the process and internal operations category because it directly impacts the operati onal success of the company.A strategic initiative in this category must be designed for the long-term sustainability of the company. Each perspective on the balanced scorecard has unique strategic implications. For example, the strategic goals of the shareholders are significantly different than those of the employees or customers. The managers in charge or implementing a strategic plan must find middle ground between the objectives of each category listed on the balanced scorecard. Each category plays an important role in the success of the organization at large and it is essential that every category be considered during the process. Ultimately, the balanced scorecard will ensure the strategy meets the objectives and values of ON Semiconductor Corporation.ONs competition in the semiconductor industry is widely varied. Direct competitors are other established brand manufacturers, such as Intel, Defunct, Sony, Silicon Wafer Producers, Foundry and Qualcomm. The closest competitor in terms of popularity, growth, and product line is the Samsung Electronics. In such a climate, the best investment opportunities will be awarded to companies that have the ingenuity and creativity to meet the customers demands for fashion in an industry driven by economic conditions, demographic trends, and pricing. The industry has moved from a buy now, upgrade later consumer to a buy now, upgrade now consumer. The companys management is confident that the ONs can achieve its aggressive salesforecasts, generating total sales of approximately $20.6 million in years to come.In addition, ONs management has carefully considered its market, potential customer base, and its ability to grow its sales average to capture 10% of the semiconductor industry. ONs has the potential to become a highly regarded resource in local, regional, national, and international markets. Due to the companys aggressive marketing strategy, establishment of the company as a unique entity in its industry, careful development of its products coupled with strategic partnerships with some of the industrys headliners, and the companys profitable revenue model, ONs has the potential to provide profitable returns to potential investors. For ONs to achieve status as an industry leader, it must secure initial capital.This capital will be used for start-up costs, to establish a reputable storefront, and to further develop the business, business infrastructure, internal systems, product development, and extensive marketing and geographic positioning. Providing that the company is able to acquire its funding requirements, ONs should be able to achieve operational success for many years to come.ReferencesPearce, J. A. II, Robinson, R. B. (2009). Strategic management Formulation, implementation, and control(11th ed.). New York, NY McGraw-Hill.Thompson, A. A., Gamble, J. E., Strickland, A. J. (2006). Strategy Winning in the marketplace Core concepts, analytic tools, cases (2nd ed.). New York, NY McGr aw-Hill.