Texas Instrument Case Analysis
..Problem Statement:
How can Texas Instruments maintain market share and profitability while other companies are conforming to global pricing systems?
Company Assessment:
Financial Assessment:
Throughout the 1980’s, Texas Instruments was the leader in sales for the semiconductor manufacturing industry. In 1980, TI recorded sales of $1.453 million. However, by 1985 competition became more intense and Motorola (along with NEC) became the industry leaders in the semiconductor market. By 1992, as a result of the intense competition, Texas Instruments had fallen from an industry leading first, to a middle of the pack sixth. However, sales and profits were increasing each year. Their income statements show that sales have nearly double in a five year span (1990-94). Working capital has more than doubled while long-term debt rose slightly.
In 1994, Texas Instruments reported record breaking sales of $10.3 billion, a 21% increase from the previous year. The split was among components ($6.8 billion), defense electronics ($1.7 billion), digital products ($1.66 billion), and metallurgical materials ($177 million). Components, alone, made a profit of $1.1 billion, while defense electronics recorded a profit of $172 million. 1994’s performance was record breaking for Texas Instruments and it marked the first time the company exceeded sales of $10 billion and over $1 billion in profit. From a financial point of view, Texas Instruments is in good position to make the necessary changes in order to accommodate their recent problems with distributors.
Company Background:
Texas Instruments (TI) is considered to be the pioneer of the American electronics industry. TI was first established, in 1951 as an electronics company serving the American defense industry. In 1958, TI developed the first semiconductor integrated circuit. After receiving market attention with its development of such innovative consumer products as the pocket calculator and the electronic wrist
How can Texas Instruments maintain market share and profitability while other companies are conforming to global pricing systems?
Company Assessment:
Financial Assessment:
Throughout the 1980’s, Texas Instruments was the leader in sales for the semiconductor manufacturing industry. In 1980, TI recorded sales of $1.453 million. However, by 1985 competition became more intense and Motorola (along with NEC) became the industry leaders in the semiconductor market. By 1992, as a result of the intense competition, Texas Instruments had fallen from an industry leading first, to a middle of the pack sixth. However, sales and profits were increasing each year. Their income statements show that sales have nearly double in a five year span (1990-94). Working capital has more than doubled while long-term debt rose slightly.
In 1994, Texas Instruments reported record breaking sales of $10.3 billion, a 21% increase from the previous year. The split was among components ($6.8 billion), defense electronics ($1.7 billion), digital products ($1.66 billion), and metallurgical materials ($177 million). Components, alone, made a profit of $1.1 billion, while defense electronics recorded a profit of $172 million. 1994’s performance was record breaking for Texas Instruments and it marked the first time the company exceeded sales of $10 billion and over $1 billion in profit. From a financial point of view, Texas Instruments is in good position to make the necessary changes in order to accommodate their recent problems with distributors.
Company Background:
Texas Instruments (TI) is considered to be the pioneer of the American electronics industry. TI was first established, in 1951 as an electronics company serving the American defense industry. In 1958, TI developed the first semiconductor integrated circuit. After receiving market attention with its development of such innovative consumer products as the pocket calculator and the electronic wrist