Analog Devices Case Study

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Analog Devices B Summary: Analog devices continued to use scorecard to evaluate the performance of the company. The main strategy of Analog devices was innovation. Analog had expanded the product mix over the period of time. The company witnessed a 78% growth rate in the year 2001. Analog devices started manufacturing components for ADSL switches, PC modems, mobile phone and wireless infrastructure equipment and PC accessories Q1 : How did ADI’s industry change between 1996 and 2001? Annlog’s industry underwent multiple changes between the period of 1996 and 2001 • Product Mix –The product mix was different in the year 2001 than what was in the 1996. The product mix included PC modems and asynchronous digital subscriber line (ADSL)…show more content…
• The company started outsourcing due to  operator of chip fabrication facility –the risk of investing in semicoductors equipment is very high and partnered with chip fabrication company  global component distributors and contract equipment manufacture • The product were developed more collaboratively due to shorter life cycle. For instance: in competition with TI, ADI won a contract from 3Com to deliver components for a new 56K modem. ADI’s proposal was viewed as superior because it integrated the function of multiple chips onto a single chip—one that handled analog to digital conversion, digital processing, and digital to analog conversion. In addition, ADI’s design promised decreased size, better performance, and a faster time. The above factors led to significant change in Analog device industry. Q2 : . How are targets set for the metrics on the scorecard? Who sets them? How rigorous does the method for setting goals need to be in order for the metric to be useful? Evaluate the goal setting process in light of the changing industry conditions as of…show more content…
Due to multiple change in the industry, Analog used two approaches to setting goals in instances where the half-life calculation was inappropriate :  Traditional Planning Process : Senior management would ask for business plans from each division, which were subsequently broken down by segment, channel, and region. The plans were then aggregated and reviewed by senior management—and these reviews would typically be followed by a negotiating process between senior and junior managers. Ultimately, each Product Line Director was accountable for meeting budgets and forecasts.  Scorecards were established top down by senior managers - The goals were set using a combination of analysis and experienced judgment. For example, competitors would be studied to determine best practices for various metrics. Then, managers judged how relevant that standard was in ADI’s unique business context and set goals over time for improvement These goals are set by senior management and requires cross functional collaboration. In order for metrics to be useful , the goal must be set with consensus of all the employees who would be held responsible and accountable for meeting the goals. If employees do not agree with the goals, it would not help the business to

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