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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (686)	1/7/2002 6:07:02 PM
From: Gottfried	Read Replies (1) \| Respond to of 25522

Brian, that should help WIND, a maker of embedded software >40-to-50 microprocessors will be used in embedded control< Gottfried

To: Proud_Infidel who wrote (686)	1/8/2002 1:14:34 AM
From: Jeffrey D	Respond to of 25522

Hi Brian, I hope all is well with you. Interesting article from The Financial Times on companies that increase market share during a downturn. AMAT, of course, is mentioned. Best regards, Jeff << INSIDE TRACK: Survival tactics are not enough: VIEWPOINT CARL SPETZLER: Companies should view the downturn as an opportunity to increase market share Financial Times; Jan 8, 2002 By CARL SPETZLER Many corporations have reacted to the economic downturn by cutting workforces, trimming budgets, reducing travel and eliminating marginal operations. That is to be expected. But while businesses wait for the economy to improve, they will lose out if they focus only on how to survive. Companies that are truly adept look beyond hard times and follow a course to outmanoeuvre rivals and emerge from the downturn with a bigger market share or greater competitive advantage. Some introduce new products, make a key acquisition or start a business. Eastman Kodak and Sanyo Electric, for example, have an- nounced plans to invest Dollars 350m (Pounds 242m) to create a new type of flat-panel screen display for use in electronic devices. Others may take less capitally intensive steps to capture options on future growth. Examples include establishing strategic partnerships with smaller firms, continuing research and development and brand investing. Think of these dual and compatible strategies as Job 1 and Job 2. Almost all companies roll up their sleeves and attend to Job 1: preserving value. Customers have less money to spend, so the chances of increasing revenues are slim. The only way to survive is to cut costs. This is fair enough for the near term. The smart and the brave, however, focus on Job 2, the opportunity that the downturn offers to take market share from rivals. That is what EMC did during the recession of the early 1990s. Coming out of the late 1980s, EMC was a medium-sized and troubled operator in the computer data storage business. At about that time Michael Ruettgers joined the company as executive vice-president. He straightened out a mess in manufacturing and reassured customers that EMC's other shortcomings were being dealt with. Most important, when he became president in 1990 he made the decision to take aim at a single market: storage for International Business Machines' mainframes. In doing so EMC dumped all its other product lines. IBM at the time was selling huge, expensive disc-drive systems. EMC came up with an alternative, the redundant array of inexpensive discs (Raid). It proved to be a successful raid on IBM's territory. Over four years IBM's market share shrank from 58 per cent to 33 per cent. EMC, which had gone into the recession of the early 1990s as a rather ordinary, uncertain contender, emerged with a 35 per cent share. In the current cycle, however, EMC has let IBM and Hitachi gain back some of the market share loss because it has taken its eye off the competition's improved products. Applied Materials seems to be doing well at both Job 1 and Job 2 in the most severe downturn in its history. The microchip-making equipment supplier has lowered its break-even point by cutting staff and expenses. At the same time it has increased R&D, acquired companies for additional competences and started a venture fund for optical technology. It is positioned to gain share in the new generation of equipment and continue to expand its offerings. During a downturn the best opportunities are likely to be outside a company's existing operations. The idea is simple. In a downturn the cost of developing opportunities internally remains relatively constant, while externally the price of opportunities falls. Bargains become available around the low point in the cycle, when the expectations of those with valuable assets to sell have adjusted to how dismal the current picture is. The potential for gaining an edge on a rival during a downturn - or even changing the competitive balance - is clear to those who pay attention. Recently, Strategic Decision Group, a consultancy, conducted an online seminar on the subject and took a straw poll of the 38 executives who participated. Almost half were convinced that if they really took advantage of the downturn with a great Job 2 effort, they might shift the competitive balance in their favour either dramatically or significantly. Another quarter thought such an effort would make at least a moderate difference. None of them thought it would make no difference at all. Why, then, is it that so few companies really step up and perform Job 2? Among the reasons: Job 1 seems so urgent that it screams for attention. The survival of the company is at stake or seems to be. Moreover, top management feels guilty about hiring people and investing in new enterprises while simultaneously making long-time employees redundant and cutting back traditional businesses. There are four principles that organisations should keep in mind, in order to carry out Job 2 successfully. * The opportunities that will vault a company to a better position in the upturn will not be obvious, so the search has to be innovative and comprehensive. * Do not simply contemplate the risks and potential value in the enterprise under consideration. Quantify them. * Embarking on a new venture in a hesitant economy is an unnatural act, so make sure top management is fully committed to it. * Know how to cope with complexity and be able to implement your strategic decisions very fast. Those who pay attention to creating future value will be the winners; but act now because there may not be a lot of time left in the current downturn. The writer is chairman of Strategic Decisions Group Copyright: The Financial Times Limited 1995-1998