ARM holdings 1

ARM HOLDINGS' STRATEGIC BUSINESS CONTEXT ANALYSIS AND

RECOMMENDATIONS

Name

Course

Professor

University

State

Date
 ARM holdings 2

ARM Holdings is a microprocessor manufacturer headquartered in Britain. The

organization aims to develop effective and efficient microprocessors that would assist in the

reduction of the technology on energy resources. According to the 2014 strategic report, ARM is

the global dominant semiconductor IP Company. The organization develops and licenses state of

the art technology used in the manufacturing most electronic digital devices sold globally. The

microprocessor technology is assisting to enhance comfort in the current world through creating

connections amongst people, with their friends, family and communities. Due to the global

presence, the company has been able to improve its revenue and growth in performance over

time. However, one of the concerns with the company is how the company will continue to

remain in the growth path considering the many years of growth it has experienced over time

(Laasch & Conaway, 2015).

The firm has a strong operating margin that runs beyond 49 percent. This high margin

underlies the resilience of the business in the dynamic and fast-paced world (Chan et al., 2013).

Moreover, ARM continually records a strong balance sheet with an equivalent of a year’s

turnover in cash. However, despite the strong growth trend over periods, the company is likely to

face a reduction in revenues in the coming periods. The rate of competition in the industry is

escalating rapidly and the fact that ARM Holdings focus on a narrow market segment compared

to its competitors such as Intel puts the company at a potential competitive disadvantage. To

attain and remain competitive in the technology space requires a firm to consistently invest huge

amount of funds in developing better and cutting-edge technologies compared to its peers (Phills,

Deiglmeier & Miller, 2008). Research studies also indicate that staying on top of the game in

such a competitive industry requires a company to continually invest in research and

development initiatives. The rising competitive trend in the industry has made companies to
 ARM holdings 3

continue outsourcing manufacturing operations in an attempt to minimize capital expenditures.

Since its incorporation, ARM Holdings has had its own manufacturing facilities with numerous

technological innovations at its disposal. However, analysts predict that if the organization fails

to begin outsourcing some of the services and processes that are not central to the business, then

it would start to experience decline in business growth and consequently dwindling investment

value (Week, 2000).

To address these changing trends, the company needs to focus on altering its business

information technology. The company has capital equipments like all other microprocessor

manufacturers, which often led the organization to incur high costs in the production of

semiconductors (Swanson, 2014). The costs of acquiring and operating fabrication equipments

are often fixed. This combined with the seasonal nature of the industry in which ARM operates

raises market volatility thus espousing the business to other numerous risks that may lead to

collapse or poor performance. Additionally, the company needs to consider adopting modern

state of the art information technology techniques that would assist it to address the problem of

the shorter life cycles of its products. The demand among consumers for applications with latest

features is consistently growing (Need, 2006). Continuous innovation may assist the company to

partially meet the demand of the customers although this often leads to the increasing problem of

shorter product life cycles. Contrarily, the needs of customers often keep on shifting, resulting

into a difficulty to accurately predict demand. Therefore, in most occasions, then the business

has just received business to ICs and integrated circuits, the interests of the customers shift or

something arises that makes the sale of these products obsolete. Therefore, the short product life

cycle shown in the chart below show that changing consumer preferences and high lead times for
 ARM holdings 4

raw materials has a negative influence on the ability of the ARM Holdings to develop

competitive advantage through creating products with longer life cycles.

According to an article published in the Fortune Magazine in November, 2012 shows that

mobile phones have been evolving from simple devices for making phone calls to become

central tools that heavily influence digital life in this age. We live in the world where business

uncertainty and transitions are paramount (Buhr, 2011). New technologies, transparency, and

globalization have combined to make the CEOs unease in their lines of duty. This continuing

uncertainty is the fundamental tool that makes business decisions and strategies to be sensitive

and crucial. A sustainable business model should be efficient in its strategic, tactical and

operational levels. At the strategic level, organizations should merge their vision and mission

needs, their underlying stakeholder concerns and consequently ensure that their development

arena is perfect and in good state (Need, 2006).

Information system

ARM Holdings should improve on its information system to enhance its competitiveness

(Wood, 2010). An information system is essentially any organized system that necessitates
 ARM holdings 5

collection, organization, storage and consequently communication of information. In that regard,

it is fundamentally the study of various complementary networks that organizations and people

utilize in the collection, filtration, processing, creation and finally the distribution of data. In

addition to that, computer information can also be described as systems that are composed of

computers and individuals whose primary role is to process or interpret different pieces of

information. The term can also be used to strictly refer to the computer software that has been

designed to run particular computer database or system (Swanson, 2014).

How ARM Holdings should be structured

With the current competition in the industry, ARM Holdings should be structured basing

on strategic, tactical and consequently operational management (Thong & Yap, 2015). The core

purpose of creating a sustainable business model is to develop an enduring and a competitive

market advantage by creating smart market positioning. Besides, that ensuring that right

capabilities and general competencies have been addressed is also an important aspect of

ensuring that the company remains a sustainable business (Lawrence & Lorsch, 2016). The

company should be in a position to identify its problems and issues at the tactical level before

coming up with long-term integrated mission and vision that should serve into the future. In

addition to that, evaluation and learning should also be put into consideration for full operational

ability. At the evaluation platform, ARM Holdings should be able to analyze and compare its

strengths and weaknesses with that of their competitors before coming up with strategies that

would allow them to operate with their full capabilities (Chan et al., 2013).

Importantly, intelligent positioning will consequently empower ARM Holdings to climb

from one level of success year in year out (Davenport, 2013). Strategic position is important in
 ARM holdings 6

the sense that it will provide the company with remarkable platforms for overseeing the areas

where particular industries and activities end before paving the way for others that are improved

and more efficient (Week, 2000). Traditional market forecasting should be conducted in

situations where the market is entirely unpredictable to ensure that sustainability is maintained.

The managers of the firm should also assume the responsibility of harnessing information for the

greater good of their companies in case of change. On the contrary, the planning cycle should be

readjusted with urgency and precision if the change in the market is somehow rapid and

consequently advanced. (Phills, Deiglmeier & Miller, 2008).

Tactical management business unit managers/self-directed teams

Tactical decision structure can be described as the sets of short range plans that are

designed to emphasize on the current operations of various aspects of the organization (Figge et

al., 2002). In that regard, it is imperatively logical to state that tactical decision is characterized

by the abilities of the ARM Holdings to come up with tactics that could be used to address

arising issues and situations that come in due course of their corporate operations at the expense

of sitting back and relying on standardized procedure (Melville, 2010). As far as the firm needs

goals and agendas to follow in their various undertakings, tactical decisions are the corner posts

of elaborating the step by step procedures that could be used for the achievement of their

objectives (Christensen, 2007). Thus, it is also reasonable to state that tactics are fundamentally

the steps that are required for the implementation of its designated strategies. Tactical decision

structures are mostly employed in situations where the corporate managers of the firm are

obliged to come up with tactics that should use to extend the success of their firms into the future

(Buhr, 2011).
 ARM holdings 7

Management information system

ARM Holdings should improve its approach in the management of its information

system. Management information system can be described as the study of technology,

organizations, and people (Claudio, 2016). It should be primarily employed in situations where

the firm is compelled to utilize the information that they have to make decisions that are likely to

boost their productivity. In addition to that, information management system is also necessary for

creating efficiency amongst the various organizational stakeholders such as the staff, the

customers and consequently the managers. Individuals who specialize in management

information systems of the company are supposed to understand how to create systems that can

be used to find and store data alongside learning more about the operational abilities of various

computer databases that are available in ARM Holdings (Zahra & George, 2002). It should be

noted that firms are fundamentally run by plans and stakeholders who play significant roles in

ensuring that sustainability is achieved. Apparently, it is hard to attain any form of success

without the efficient utilization of information management system. Management information

systems empower companies to learn more about the technological innovations that are available

in the market alongside describing how they could be employed for the better good of the

organization at hand. As if not enough, it is also the right tool that can be applied to elaborate

how various organizational stakeholders should relate and operate at different organizational

levels leave alone providing companies with platforms for coming up with their operational

agendas (Figge et al., 2002).

Examples of information systems

 ARM holdings 8

There are various groups/types of information systems that ARM Holdings should use to

enhance their competiveness (Linger et al., 2013). For example, customer relationship systems

should be designed to manage issues that are related to the customers such as the inquiries that

they make, purchasing trends, the products that they prefer and even product defects. The

information system ensures that the needs of the customers are addressed creating a good relation

and winning their trust in the long run (Thong & Yap, 2015). In addition to that, customer

relationship systems are crucial tools for ensuring that the clients are allowed to interact with

ARM Holdings for services, problem resolutions and product feedback. Apart from that,

business intelligence systems should be fundamentally used to summarize current costs, future

sale patterns, and forecast revenues of the firm. Finally, knowledge management systems should

be used to organize, analyze and share knowledge with organizational stakeholders for

innovation and consequently improved performance in the future (Lawrence & Lorsch, 2016).

How ARM Holdings should improve customer relationship systems

Various possible ways could be used to improve customer relationship systems in ARM

Holdings (Davenport, 2013). Consequently, the company should come up with system software

that can be used easily by both the employees and the customers. In that regard, ARM Holdings

should research the different needs of their various departments and ensure that they have been

fully integrated into the final system software. Apart from that, all the employees should be

trained on various aspects and operations that should be conducted by a given customer

relationship system. ARM Holdings should also track the underlying behaviors of the clients in

different cycles of sales. All the data should be updated, and finally, the system should be

integrated with social media platforms (Christensen, 2007).

 ARM holdings 9

How ARM Holdings should improve its business intelligence systems

Business intelligence systems can be improved by customizing user interfaces to serve

different organizational roles (Zahra & George, 2002). In addition to that, the system can also be

enhanced by integrating data across all the underlying corporate departments and consequently

applications. ARM Holdings should support cultures that are characterized by data-driven

decision making to improve their business intelligence systems. In retrospect to that,

implementation of processes for continuous improvement of the company’s data quality will also

be a great measure that would play a significant role in improving the business intelligence

systems of the firm. Finally, the firm should also demonstrate a high degree of planning in its

operations and outcomes (Wood, 2010).

How ARM Holdings should improve its knowledge management systems

Knowledge management systems can be enhanced by ensuring that there is a clear

understanding of the flow of knowledge in the company (Claudio, 2016). A clear vision is

characterized by determining the critical knowledge, mapping out key business activities and

consequently identifying and isolating business blockages. Apart from that, ARM Holdings can

also improve its underlying knowledge management systems by understanding that their

underlying knowledge management technology is fundamentally one technique that involves

various components including people, culture, processes and other practices. Finally, knowledge

management systems can be improved by understanding and consequently address the critical

success factors that affect the operational activities of the firm (Linger et al., 2013).

The role of marketing professionals in the supply chain decisions

 ARM holdings 10

Marketing professionals are unquestionably crucial personnel that should be used to

boost the marketing prowess of ARM Holdings (Buhr, 2011). Marketing professionals care about

and consequently participate in the supply chain decisions because they provide a remarkable

platform for navigating through the various marketing details with high visionary levels. For

example, marketing professionals are crucial in the sense that they provide strategic planning

thus defining their positions in the decision-making platform of their respective firms.

Additionally, marketing professionals are also skilled with a high degree of competence that can

be utilized to create a framework that can connect the vendors to the customers (Christensen,

2007). The fact that marketing professionals are experienced in various aspect of marketing also

means that ARM Holdings should allow them to participate in the commercialization decisions

by enlightening the management about workable rationales that can be used to reach the

customers. They will also provide the firm with the foundational platform for amplifying the

scope of their supply chain agendas. Finally, marketing professionals should also assist in supply

chain decisions because they provide the management with the technique in which they can

heighten their financial contribution to necessitate their activities (Laasch & Conaway, 2015).

Ethics in marketing

Ethics are important components that will prove pivotal in the establishment of ARM

Holdings to reach the global markets (Reynolds, 2011). Notably, the market system is primarily

designed to relate to the need of upholding ethics in business contexts to ensure that people who

price goods, as well as the ones who are negotiating to purchase those goods, are subjected to

fair and just treatments. This essence is distinguished from the law because of the fact that the

law requires that business people conduct their business activities under particular mandatory

regulations that are primarily developed from the basis of equity and justice. The concept of
 ARM holdings 11

ethics is also distinguished from morality because there different perspectives that are

substantially considered as moral. Additionally, ethics can also be regarded as respect to justice

and fairness. Thus, ARM Holdings should consider the relevance of upholding marketing ethics

to prove standout at the global level (Reynolds, 2011).

Understanding networking

Networking has significant implications for the success of any business and ARM

Holdings should not be an exception. For instance, it is through networking that the firm will get

a platform for creating and fostering relationships with the other competitors in the market.

Besides that, networking is also important because it enables business set ups to stand out despite

the competition that is there. It is also through networking that ARM Holdings will be able to tell

their story to the clients and the customers thus retaining and winning them on end. Networking

is also essential to business success because it makes companies unique and strategically

prepared in their undertakings. Clearly, ARM Holdings should focus on improving their

networking approaches to marking their positions at the global level (Christensen, 2007).

Product adaptation and distribution functions

Dominating the market is the core objective of all business organizations and individuals.

ARM Holdings should design their products to fit the local market by conducting customer

research (Davenport, 2013). They should consider adjusting their products to meet the features

that will suit the needs of the customers. Also, they should also compare the market opportunities

that are there in with the specifications of the products that are required by the customers. The

company should also create an online social platform like Facebook and Twitter to capture the
 ARM holdings 12

needs and recommendations of the customers directly and develop the necessary adaptations to

their products to help them capture as many customers as possible (Buhr, 2011).

Apart from that, ARM Holdings should also conduct research on the market competition

and use the information for product adaptation purposes. Understanding market competition is

perhaps the fundamental step of achieving success in business. Accordingly, they should analyze

their products and establish how competitive it is in the market (Davenport, 2013). By so doing it

will be typically easy to develop a competitive advantage over other potential competitors in the

market by developing unique and outstanding brands that are likely to compete favorably with

other players in the market. Contrary to that, ARM Holdings should also analyze product

specification of other companies in the market before adapting their products into a superb

choice (Laasch & Conaway, 2015).

ARM Holdings should also modify their products to fit the market by setting priorities.

They should balance both the market and customer needs together with the cost of developing

the product and the likely returns. By so doing, it will be inherently easier to customize the local

market targets and increase profits by minimizing the cost of production as much as possible.

Additionally, setting priorities will enable the firm to accelerate the readjustment of the current

products alongside the introduction of new products in the market thereby extending their selling

proficiency to the global platform.

Conclusion

In conclusion, it is imperatively evident that information systems and business decision

structures are crucial aspects of organizational success that ARM Holdings requires (Melville,

2010). A sustainable competitive advantage is primarily cultivated from the establishment of

 ARM holdings 13

consistency that is substantially redirected towards particular direction by laying down “second-

order” organizational sustainability that is not static but rather fast adapting. Therefore, at the

operational levels, ARM Holdings should be in a position to identify its key stakeholders and

participating parties such as the members of the community before developing transition agendas

and experimental platforms for determining whether their underlying business techniques are

useful or not. Nonetheless, it is imperatively reasonable to understand that despite the current

market uncertainty that is dominating the industry, corporations that have lived to thrive are the

ones that can read and utilize the signals of change. Besides, business sustainability is no longer

about focusing on product success but rather the capabilities of establishing strategies and using

them through proper management of skills and other sets of organizational strengths (Laasch &

Conaway, 2015).
 ARM holdings 14

References

Buhr, N., 2011. Social And Environmental Accountability Journal.

Chan, Y.E., Huff, S.L., Barclay, D.W. and Copeland, D.G., 2013. Business strategic orientation,

information systems strategic orientation, and strategic alignment. Information systems

research, 8(2), pp.125-150.

Christensen, L.J., Peirce, E., Hartman, L.P., Hoffman, W.M. and Carrier, J., 2007. Ethics, CSR,

and sustainability education in the Financial Times top 50 global business schools:

Baseline data and future research directions. Journal of Business Ethics, 73(4), pp.347-

368.

Claudio U. Ciborra, 2016. Teams, markets and systems: business innovation and information

technology. Cambridge university press.

Davenport, T.H., 2013. Process innovation: reengineering work through information technology.

Harvard Business Press.

Figge, F., Hahn, T., Schaltegger, S. and Wagner, M., 2002. The sustainability balanced

scorecard–linking sustainability management to business strategy. Business strategy and

the Environment, 11(5), pp.269-284.

Laasch, O. and Conaway, R.N., 2015. Principles of responsible management: Glocal

sustainability, responsibility, and ethics. Nelson Education.

Lawrence, P.R. and Lorsch, J.W., 2016. Organization and environment: managing differentiation

and integration (Harvard Business School Classics).

 ARM holdings 15

Linger, H., Fisher, J., Barnden, A., Barry, C., Lang, M. and Schneider, C., 2013. Building

Sustainable Information Systems. Springer US.

Melville, N.P., 2010. Information systems innovation for environmental sustainability. Mis

Quarterly, 34(1), pp.1-21.

Need, W.C.D.H.P., 2006. Human resource management: Gaining a competitive advantage.

Phills, J.A., Deiglmeier, K. and Miller, D.T., 2008. Rediscovering social innovation. Stanford

Social Innovation Review, 6(4), pp.34-43.

Reynolds, G., 2011. Ethics in information technology. Cengage learning.

Swanson, E.B., 2014. Information systems innovation among organizations. Management

science, 40(9), pp.1069-1092.

Thong, J.Y. and Yap, C.S., 2015. CEO characteristics, organizational characteristics and

information technology adoption in small businesses. Omega, 23(4), pp.429-442.

Week, B., 2000. Knowledge management and new organization forms: a framework for business

model innovation. Knowledge management and virtual organizations, 2.

Wood, D.J., 2010. Business and society. Glenview, IL: Scott, Foresman/Little, Brown Higher

Education.

Zahra, S.A. and George, G., 2002. The net-enabled business innovation cycle and the evolution

of dynamic capabilities. Information Systems Research, 13(2), pp.147-150.