Topic:ARM Case Study
Objective:To analyze the key growth drivers for ARM.
Thesis:R&D is the key determinants of ARM’s growth.
ARM is a microprocessor IP company
ARMutilizes its innovation business model to develop new technologiesthat are then licensed to partners. This means that ARM does not useits innovations to develop different products, but licenses othercompanies to use its technologies in manufacturing (Business CaseStudies LLP, n.d.). The company generates revenue by charging somefee on all chips that contain its technology.
Developing and licensing new technology
ARMengages in extensive research and develop, which results in thediscovery of new technologies. The anticipated increase in the numberof chip enabled devices provides an opportunity for ARM to grow bydeveloping and licensing new technology that will be integrated inthese electronic devices (Business Case Studies LLP, n.d.). Assigning the research and development tasks to experienced staff andensuring successful transfer of technology to partners will help ARMkeep on growing.
Increasing value for every smart device
Theexponential growth of demand for smart chips provides a growthopportunity for ARM. It is estimated that more than 1 billion peopleare using smart devices (such as mobile phones) and this number isexpected to double by 2015 (Srivastava, 2014). This means that thedemand for smart chips developed by ARM will continue increasing.
Increasing market penetration
AlthoughARM ranks as the world leading microprocessor IP Company, it stillhas the capacity to expand its market share by increase its marketpenetration (ARM Holdings, 2013). ARM has focused on chips used inmobile devices, which accounts for about 95 % of its total licenses(Business Case Studies LLP, n.d.). This means that ARM will expandits market share by venturing in non-mobile chips, which are about 5billion of the total chips sold globally.
ARMis a microprocessor IP company that relies on research anddevelopment. Its growth drivers include developing and licensing newtechnology, increasing value for every smart device, and increasingmarket penetration.
ARMHoldings (2013). The architecture for digital world: Companystrategy. ARMHoldings.Retrieved September 20, 2014, fromhttp://ir.arm.com/phoenix.zhtml?c=197211&p=irol-strategy
BusinessCase Studies LLP (n.d.). ARM. BusinessCase Studies.Retrieved September 20, 2014, from http://businesscasestudies.co.uk
Srivastava,A. (2014). 2billion Smartphone users 2015: 83 % of internet usage from mobiles.New York: Dazeinfor, Incorporation.