Full essay for all 6 case group assignments in the course Corporate Strategy and Growth, part of the MSc Strategic Management at the Rotterdam School of Management.
Includes a case about:
1) ARM
2) GE
3) Renault
4) Danone
5) Pixar
6) HP-Compaq
Contents
Case 1: ARM......................................................................................................................................................2
Case 2: GE.........................................................................................................................................................3
Case 3: Renault.................................................................................................................................................4
Case 4: Danone.................................................................................................................................................5
Case 5: Pixar.....................................................................................................................................................6
Case 6: HP-Compaq..........................................................................................................................................8
Case 1: ARM...................................................................................................................2
Case 2: GE......................................................................................................................3
Case 3: Renault..............................................................................................................4
Case 4: Danone..............................................................................................................5
Case 5: Pixar..................................................................................................................6
Case 6: HP-Compaq.......................................................................................................7
, Case 1: ARM
Synergies ARM created: ARM became the worldwide market leader though their many
collaborations in which they mainly created the first 3 types of synergies. Consolidation synergies
have a similar resources and high level of modification and therefore are enhancing cost reduction
and realizing high competitive potential. Customization synergies have dissimilar resources and
high level of modification and therefore are enhancing revenue and realizing high competitive
potential. Combination synergies mean that two parties have the similar components but acquire
these components from different suppliers. When the two parties team up, they can achieve greater
bargaining power against suppliers which can lead to lower costs for both parties. Connection
synergies have dissimilar resources and low level of modification and therefore are enhancing
revenue but low synergy, which are not widely used by ARM in the examples of the case.
ARM’s Dynamic Capabilities: Reconfiguration is transforming and recombining resources by
consolidation of support activities and by achieving economies of scale in core processes across
business units. Leveraging is extending the scope of resources into other business units. Learning is
encouraging creation of new resources (supporting innovation, allowing exploration, introducing
new knowledge) and provoking resource creation through controls. Integration is integrating
resources by pooling resources of different business units and by encouraging cross - business unit
collaboration.
How ARM’s Dynamic Capabilities Contributed to Those Synergies:
Ex 1: ARM created synergies within their alliance with Intrinsity who are specialized in making fast
chips. This is an example of synergies between consolidation and combination depending on the
level of modification needed. Through both ARM’s and Intrinsity’s dynamic capabilities of
leveraging and learning they were free to explore the possibilities of the chips and use their
resources to improve the chips, making them faster.
Ex 2: Plessey was ARM’s first experience of working with a different semiconductor company who
wanted to maximize the communication bandwidth while keeping an eye on the costs. This is an
example of a combination synergy where their resources were similar and needed low modification.
ARM’s dynamic capability reconfiguration made it possible to recombine their resources and
achieve economies of scale while also reducing risk through licensing.
Ex 3: The consortium between TI, ARM and Nokia showed the need to reduce memory
requirements of CPU’s. ARM used its learning capability to innovate its chips and develop the
‘Thumb’ architectural extension together with TI, which accounted for half of ARM's royalties in
2000. This allowed for customization synergies.
Ex 4: With the use of the signal processing code of LSI-logic they tried different iterations to
develop a DSP extension that would enhance the ARM7’s performance to satisfy the needs of
Cirrus’s disk drive application. After this development they used the “widening” process where they
sought different applications for different partners for the same architecture. Here ARM created
synergies in between consolidation and customization on the level of similarity in resources but
need high modification is to fit the needs of different partners. The dynamic capabilities integration
and leveraging made it possible for ARM to use leverage resources into different business units
while also integration these resources across the business units to modify the product for different
purposes.
Ex 5: ARM decided to license its technology to competitors in order to make it easier for competing
operating systems to run on top of ARM's architecture. Reconfiguration allowed ARM to co-design
and co-verify its chips with competitors. This is an example of a consolidation synergy because
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