..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 in ...