Case 11-2 Analog Devices, Inc.

Management Control Systems

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Leading manufacturer of circuits that would convert between data analog and digital 81-96 – growth and stagnation (record profits and first loss ever) Management tools were introduced – corporate scorecard o ADI’s corporate scorecard received an award for its use but ADI still didn’t think it knew how to make best use of it (ie- how fast to change it and how best to use it to focus management attention in the future). Background Company operated in one segment – the design manufacture, and marketing of a broad line of high performance linear, mixed-signal, and digital integrated circuits (“IC’s”) that addressed a wide range of real-world signal processing applications. Principle products: 1. General purpose (SLICs) – Largest segment (65% of sales) 2. Standard mixed signal (SPLICs) 3. Digital signal processing (DSP ICs) 4. Assembled products All the company’s products were used in a range of equip and systems for communications, computer, industrial, military/aerospace, et. al. In ’96 one-half of its sales was from outside the US Industry Analog sensors can detect and measure information like temp., pressure, sound, images, speed, positions o These signals can be converted to digital form for microprocessor input Dig. Signal processing – technology that further processes the input Real-world signal processing- this occurs when digital signals are converted to analog form to provide signals for display, sound, or control functions Semiconductor technology advances have led to increases in IC performance and function (this is where Analog Devices, Inc. comes in) Company Strategy Wanted to be first-to-market with new products that had superior performance features Analog was one of the world’s largest suppliers of SLIC products 90-96 – it sought to balance its SLIC market domination with growth potentials: A couple other two processing apps. o Company exploited its ability to develop special purposes process circuits and was able to tailor to “specific high-volume applications in target markets” (SPLICs and DCP ICs) o These addressed emerging demands of the market for high-performance levels in communications, computers, etc. The 96 strategy
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Case 11-2 Analog Devices, Inc. - Leading manufacturer of...

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