13-3: Texas Instruments and Hewlett-Packard
Texas Instrument (TI) and Hewlett Packard (HP) are two companies famous for introducing Electric and electronic products. Although competing in similar industries, their strategies are very much different.
Given the differences in strategy between two firms, what would you expect would be the differences between TI & HP in their planning and control system; strategic planning systems; budgeting systems; reporting systems; performance evaluation systems and incentive compensations systems.
Inferred from the case, we expect some differences in planning and control system between ...view middle of the document...
g.: digital products line acts as consumers for component business line and suppliers for the government electronics business line). The same condition may be applied in HP. .
Deployment of resources will be explained in the later sections. .
Budgeting Systems: .
Budgeting systems deal with how the financial resources are deployed in the company. The budgeting system covers the corporate levels, functional levels and business levels. The case does not mention anything about each company organizational structure, or the competition environment in business level; therefore we focus only on functional levels and business levels. In term of functional levels systems, we evaluate marketing, manufacturing, R&D and financial functions.
Texas Instruments: .
TI with its cost driven strategy which may requires these functions to operate as efficient as possible. Its objective of being first to entry, high volume production and dominant market share will impose the marketing budget to be varied according to products' life-cycles. Higher budget will be needed in introduction stage and mature stage (to defend the market leadership position).
For R&D function, budget will be focused for researching and developing new process of manufacturing instead of inventing new products.
■ Texas Instrument (TI) and Hewlett Packard (HP) are two companies famous for introducing electric and electronic products. Although competing in similar industries, their strategies and management control are very much different.
Problem Definition in brief
■ Given the differences in strategy between the two firms, what would you expect would be the differences between TI and HP in their planning and control systems; strategic planning systems; budgeting systems; reporting systems; performance evaluation systems; and incentive compensations systems?
■ What are the management controls that benefit each company’s strategies?
Framework for Analysis
■ Identify and contrast the business and functional strategies of each firm
■ Identify and discuss each firm’s “tendencies” in terms of:
□ Planning and control systems
□ Strategic planning systems
□ Budgeting systems
□ Reporting systems
□ Performance evaluation systems
□ Incentive compensation systems
Framework for Analysis
■ Compare the expected “tendencies” to the actual controls used by each firm during the time period 1980 – 1985
■ Formulate conclusion and recommendation
Analysis: Business Strategy and Functional Strategy of TI & HP: [pic]
Figure: Business Strategy and Functional Strategy of TI & HP illustrating ‘Low cost’ and ‘Differentiation’ respectively