ST Microelectronics – Partnering for Profit By Tang Hung Kei & Tom Gleave

Abstract

The semiconductor industry was experiencing intense competition which had led to sustained downward pressure on prices and profit margins across many product categories. In the face of these pressures, ST Micro-electronics (formerly SGS-Thomson) had shifted its product mix towards higher value-added items. This in turn, was beginning to affect the company's relationship with its distributors.

To facilitate the shift in product focus, ST Microelectronics had developed a Roadmap business planning tool. The company hoped that by negotiating the targets and actions steps contained in the Roadmap with its distributors, it could build a common mindset with them. But first, the company would have to convince its distributors in adopting Roadmap as a planning tool.

Teaching Objectives

• To illustrate the level of cooperation that is required to successfully manage close, mutually-dependent relationships.
  
  
• To illustrate how TQM techniques can be applied to the business planning process.
  
  
• To illustrate the merits and drawbacks of several generic options that can be used to increase sales through distribution alliances.

Issues: Business Planning, Total Quality Management Techniques, Distributor Relationships

View case details in our E-catalog ››

About the Authors