Nvidia: (Worlds leader in visual computing technologies and the inventor of the GPU)

Name: SAGAR P. SHAHStd: S.Y.BMS - “B”Roll No: 140Sub: STRATEGIC MANAGEMENT

INRODUCTION:

In the beginning

When the PC multimedia revolution was just starting, three industry veterans formed NVIDIA in January 1993. Jen-Hsun Huang, NVIDIA President and CEO, had been the Director of Coreware at LSI Logic's "system-on-a-chip" division. Curtis Priem, NVIDIA Chief Technical Officer, had been the architect for the first graphics processor for the PC, the IBM Professional Graphics Adapter, and more recently had developed the GX graphics chips at Sun Microsystems. Chris Malachowsky, VP of Hardware Engineering, was a Senior Staff Engineer for Sun Microsystems, Inc., and was co-inventor of the GX graphics architecture.

To give you an idea of the state of the industry at the time, "MPC Level 2" had just been declared to promote audio and video technologies on the computer. CD-ROMs and 16-bit sound cards just started growing in popularity. Graphics accelerators at the time supported full motion video as well as photo-realistic, high-color 15-bit and higher color depths. It was in this environment that NVIDIA developed its first graphics chip with the help of SGS-Thomson Microelectronics (ST Micro).

The rise of NVIDIA

NVIDIA needs no introduction at Firing Squad or anywhere else in the hardware industry. The company has become the poster child for consumer 3D graphics. Ever since the release of its RIVA 128 graphics card, NVIDIA has never let its momentum slow down.

When NVIDIA made its initial public offering three years ago, it was joining a club of only a handful public fabless graphics semiconductor companies: ATI, S3, Trident, Tseng Labs, Number Nine, Cirrus Logic, 3dfx, and 3Dlabs. We all watched as the company climbed through the ranks with the TNT, TNT2, GeForce, and GeForce2 line of graphics processors.

Big green juggernaut

Through aggressive product development, near-perfect execution, and very strong arms, NVIDIA rose to the top of the industry. Today, NVIDIA owns all of 3dfx's intellectual property, has numerous OEM PC deals and has recently become Apple's default high-performance desktop graphics provider. Soon we'll see the mobile GeForce2 Go shipping in laptops from Toshiba, and we can't forget the upcoming introduction of NVIDIA's next generation NV20 GPU. After that, NVIDIA can look forward to the launch of Xbox as well as its new line of motherboard chipsets.

How did NVIDIA grow to become the leader in its industry? Has NVIDIA made any mistakes? What technologies bridged the gap between the NV1 and the RIVA 128? What is NVIDIA's future strategy? Are there any cool random facts about NVIDIA that most people don't know? Do you think we'd be asking these questions if we didn't have the answers?

History:

Founded in 1993, NVIDIA Corporation is a leading designer of graphics processors. The company's products first became accepted by the computer gaming market, then by other market segments such as the corporate and mobile PC markets. NVIDIA has grown into a dominant force in the graphics market primarily through the introduction of new products that broadened its line, and through the acquisition of some smaller competitors such as 3dfx Interactive Inc. along the way. The company has been selected by Microsoft Corporation as the sole supplier of graphics processors for its X-Box gaming console. Although NVIDIA has been recognized as having the fastest graphics chips available, it remains locked in a battle for a dominant market share of the graphics market with Ontario-based ATI Technologies Inc.

NVIDIA has quickly become the worldwide leader in graphics processors and media communications devices. In fact, NVIDIA was the first 3D graphics semiconductor company to deliver a complete top-to-bottom family of 3D solutions.

Led by our co-founders — Jen-Hsun Huang (President and CEO), Curtis Priem (Chief Technical Officer) and Chris Malachowsky (VP of Hardware Engineering) — our employees are committed to developing innovative technologies that deliver stunning multimedia experiences. And they're doing it around the world, at NVIDIA offices located in the United States (AZ, CA, MA, NC, TX, and WA) as well as in England, France, Germany, Japan, Singapore, and Taiwan.

Wherever the location, NVIDIA makes a significant investment in its people — in addition to its methodologies, technology and brand — to ensure the Company continues to deliver to its customers a unique competitive advantage.

What's this commitment and investment mean in our everyday working lives? Quite simply, it means that NVIDIA offers a challenging, high-energy and rewarding work experience.

To support NVIDIA's employees, the HR team is committed to delivering programs and services to the nth degree. That means you can be sure that working at NVIDIA just may be the greatest experience in your professional life.

Our commitment also extends beyond the NVIDIA workplace to the communities in which we work and live. Just as the Company strives to maintain its leadership position in the graphics world, it is also committed to making a lasting and positive impact in the lives of the people in our community.

Through our corporate donations and fundraising program, we currently support such organizations as the American Red Cross, the Second Harvest Food Bank, the Humane Society, and other non-profit organizations.

Background:

NVIDIA awakened the world to the power of computer graphics when it invented the GPU in 1999. We have since led the industry with breathtaking graphics on computers ranging from smartphones to game consoles to engineering workstations. Our expertise in GPUs has led to breakthroughs in parallel processing, empowering scientists with access to ultra-efficient supercomputers.

GPUs: The Engines of Computer GraphicsOne of the most complex processors ever created, the GPU is the engine of computer graphics: the science and art of using computers to create and enjoy beautiful, interactive experiences. NVIDIA has shipped over one billion GPUs. And the rising importance of computer graphics is fueling growth. It’s estimated that by 2015, two billion computers a year will ship with GPUs.

A Culture of ReinventionFounded in 1993, NVIDIA has continuously reinvented itself to delight users and shape the industry. From our roots in PC graphics, we expanded into professional graphics and high-performance computing. Our recent move into mobile computing puts us at the center of one of the industry’s fastest-growing segments.

A Passionate FollowingThe passionate drive that fuels our company is most powerfully reflected back from our users. The devotion to our brand is truly rare and is expressed in deeply personal ways — including artwork, tattoos and even in naming their children “NVIDIA”.

NVIDIA offers four powerful brands of processors: GeForce®, Quadro®, Tesla™, and Tegra®.

Products:

3D vision:

3D VISION BUNDLE

3D vision kit

3D Vision Extra Glass

3D Vision Notebook

Motherboard:

nForce desktop MCPs

Geforce dektop motherboard GPUs

Geforce Notebook Motherboard GPUs

Mobile:

Tegra 2

Tegra APX

Game Console:

Playstation ® 3

Notebook:

Geforce GTX 580M

Geforce M Series

Desktop:

Quadra NVS

Tesla

Downloadable Games:

Geforce.com – the new destination for Geforse gamers

Home Entertainment:

Pure Video Decoder

Software:

Cuda

Quadro

Levels of strategy:

Enterprise strategy can be formulated and implemented at three different levels:

1. Corporate level2. Business unit level3. Functional or departmental level

The above levels of strategic management can be show with the following diagram.

The above diagram can be Explained as follows:

1) Corporate Level Strategy

I)Corporate level strategy encompassing the entire organization the entire organization. corporate leve strategy addresses fundamental question “what is the purpose of the company, What business it wants to be in,how to expand such business, etc”

II) In other words, corporate level strategy management is the management of activities which defines the overall character and mission of the organization. The product / segments it enter and leave the allocation of resources and management of synergy among it’s business.

III) The corporate level strategy is formulated by CEO, Chairmen, etc.

Nvidia corporation companies Board of Directors,

Co-founder, President and CEO is - Jen Hsun Huang.

Chairmen- Harvey   C.   Jones

Managing Director- Tench   Coxe , James   C.   Gaither

2) Business level strategy

I)Business level strategy occurs at the strategy business unit(sbu) or product level. Sbu level strategy sometimes is also referred to as competitive level strategy.

II) At this level,Decision pertaining to the product mix, Market segments & maneuvering competitive advantages for the business.

III) Corporate level particularly decides type of business where as the bls decides the strategies to be undertaken to succeed in choosen business.

IV) business unit level strategy has to confirm obviously to the corporate philosophy & expectation of the stake holder (having interest in particular activity)

V) In that, The Bls management of the SBU’s efforts to compete effectively in particular line of business & to contribute the overall organizational process.

Business level managers,

Bill   Dally , Philip   J.   Carmack , Jeff   Fisher

3) Functional level strategy

Functional level strategies are strategies for different Functional areas like production, marketing, finance, personal. In other words, Functional level strategy management is the management of relatively narrow areas of the activities which are vital, pervasive, containing important for the organizational overall development. Functional level strategies in marketing, finance, operations, human resources, and R&D involve the development and coordination of resources through which business unit level strategies can be executed efficiently and effectively.

Functional units of an organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on resources and capabilities on which the higher level strategies can be based. Once the higher-level strategy is developed, the functional units translate it into discrete action-plans that each department or division must accomplish for the strategy to succeed.

Thus to sum up levels of strategic management is characterized 3 different levels where in Cls is responsible for planning activities, Bls is responsible for implementation of activities and Fls is responsible for functional activities.

Process of strategic Management

The strategic management process is a systematic approach to it’s company & it’s environment. The strategic management process can be broadly devided in to 3 phase which consist of 19 steps. 3 phases in which strategic management process is designed are as follows.

I) Phase 1

Strategy Formulation

Strategy formulation can also be refferd to as strategic planning. This step is designed by the corporate level of the strategic management .The strategy formulation involves following steps.

1>Framing Mission & Objectives

The 1st step in formulation of strategy is to frame mission & objectives of a company. The objectives are the aims or the ends which the company seeks to achieve where as mission states the philosophy & purpose of the company.

2>Analysing the Internal environment

The analyzing of internal environment refers to analyzing of manpower, machine, procedure & other resources of the organization i.e. it revels strength & weakness of the company.

3>Analysing The External Environment

The external environment refers to government, combination, consumer, technological development & other Environment Factors that affect the organization.

4>Gap Analysis

Gap analysis is the analysis in which the management compare & analyse it’s present performance level & the desired Future performance level.

5>Framing Alternative strategy

After making Mission & Objectives analyzing the internal & external Environment & the Gap analysis the management must frame alternative strategies i.e. some strategies may be put on hold & some other needs to be framed for taking some decision.

6>Choice of Strategy

The organization can not implement all the strategies & thus a firm Strategy must need to be selected i.e. the strategy must need to be selected i.e the strategy which gives maximum benefit & minimum lost Would be Selected.

II) Phase 2

Strategy implementation

The strategies are formulated for each & every functional department such as Production, Marketing, Finance & personal. Once the strategy are formulated then the next step is implement of such strategies.

1>Formulation Of Plans, Programmes & Projects.There is a need to frame plan, programme & projects. i.e plans result in different kinds of programmes & results in different kinds of programmes & programme leads to the formulation of projects.

2>Project ImplementationProject passes through various stages before the actual implementation. The various phases includes Conception phase, Defination phase, Planning & Organising phase, Implementation phase, Cleanup phase, Etc.

3>Procedural implementationThe organization needs to be aware of the regulatory framework of the govt. authorities such as regulation in respect of foreign technology, foreign collaboration procedure, FEMA regulation, capital issue guidelines, Foreign trade regulation, etc before implementing the strategies.

4>Resource AllocationIt deals with the arrangement & commitment of physical, Financial & Human resources to various activities so as to achieve the goals of the organization.

5>Structural ImplementationStructure is the establish pattern of relationship among the components of parts of an organization. The organization structure for strategy implementation can be of Enterpreneul structure, Functional structure, Divisional structure, Matrix structure, etc

6>Functional implementationIt deals with the implementation of functional plans & policies. Strategies frame by the top management needs to be devided in to vital functional plans & policies which are compaitable with each other.

7>Behavioural implementationIt deals with these aspects of strategy implementation that have an impact on the behavior of strategist in implementing the strategies i.e. it deals with leadership, motivation, business ethics, corporate social responsibility, etc.

III) Phase 3

Strategy Evaluation.

Evaluation of a strategy is that phase of s.m process in which managers try to assure that the strategic choice is properly implemented & this meeting the objectives of the company this step is taken up by the business level at strategic management.

The strategy evaluation involves following elements.

1>Setting of standardsStrategist needs to established standards in term of quantity, quality, cost & time

2>Measurement of performanceThe next step is to measure the actual performance both in quantitative terms as well as qualitative terms.

3>Comparison of actual performance with standardsThe actual performance needs to be compared with standards. There must be objective comparison of actual performance with standards so as to find out deviations.

4>Finding out deviationsAfter a comparision, the managers may notice the deviation i.e the differences between the actual & standards.

5>Analysing DeviationThe deviation must be reported to the higher authorities. The higher authorities analysis the cause of deviation if any is available

6>Taking corrective MeasuresAfter identifying the Causes of deviation the managers need to take corrective steps to correct the deviations. The corrective steps must be taken at the right time so as to accomplish the objectives. Thus the strategic management process which involves three phases including 19 steps. To sum up the strategy management process can be showed with the following diagram.

Key Steps towards Strategic Planning:The preparation of a strategic plan is a multi-step process covering vision, mission, objectives, values, strategies, goals and programs. These are discussed below.

The Vision

The first step is to develop a realistic Vision for the business. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance, size, activities etc. Answer the question: "if someone from Mars visited the business, what would they see (or sense)?" Consider its future products, markets, customers, processes, location, staffing etc. Here is a great example of a vision:

I will come to America, which is the country for me. Once there, I will become the greatest bodybuilder in history.......... I will go into movies as an actor, producer and eventually director. By the time I am 30 I will have starred in first movie and I will be a millionaire...... I will collect houses, art and automobiles. I will marry a glamorous and intelligent wife. By 32, I will have been invited to the White House. Attributed to Arnold Schwarzenegger who was elected Governor of the State of California in 2003.

The Mission

The nature of a business is often expressed in terms of its Mission which indicates the purpose and activities of the business, for example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups.

Our mission is simple: Build a great company and be the most important 3D graphics company in the world.

The Objectives

The third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds), objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. These objectives could cover growth, profitability, technology, offerings and markets.

As the market rocks and rolls NVIDIA stays focused on its number one objective: to continue to build one of the most influential technology companies in the world.

The Goals

Next come the Goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives, for example, to achieve sales of $3m in three years time. Goals should be quantifiable, consistent, realistic and achievable. They can relate to factors like market (sizes and shares), products, finances, profitability, utilization, efficiency.

Our goal is to reduce our carbon footprint by reducing water, waste and energy usage and running our data centers as efficiently as possible.

The Strategies

Next are the Strategies - the rules and guidelines by which the mission, objectives etc. may be achieved. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example:

The company's internal cash flow will fund all future growth. New products will progressively replace existing ones over the next 3 years. All assembly work will be contracted out to lower the company's break-even point.

The Values

The next element is to address the Values governing the operation of the business and its conduct or relationships with society at large, customers, suppliers, employees, local community and other stakeholders.

At the center of NVIDIA’s corporate culture are our five core values. These values are willingness to take risks, striving for excellence, intellectual honesty, directness and making a contribution.

The Programs

The final elements are the Programs which set out the implementation plans for the key strategies. These should cover resources, objectives, time-scales, deadlines, budgets and performance targets.

Thus the key for strategy planning is based upon the 4 primary tools & 3

supporting tools..

Key Steps towards business Analysis (swot analysis):

Nvidia is a corporation that produces graphics processing units (GPUs) and chipsets that are used in desktops and laptops as well as gaming platforms. Nvidia started out a as a small graphics company in the early nineties and has since grown to a multi-billion dollar revenue company. Nearly everyone who uses computers or video games uses Nvidia technology whether they are aware of it or not.

Nvidia holds a large share in the GPU market because of their high performing products. One of the main strengths of the company is their excellent research and development capabilities. Though this is good now, Nvidia relies on temporary technological advantages that could be improved upon by others.

A few problems that the company currently faces are lack of global diversification, low numbers of high return accounts and low product differentiation. A large portion of the companies revenues come only form Taiwan. There are also only two companies, HP and Asustek, who are responsiblefor large portions of their income.

There are a few options that Nvidia should consider. One option that would help in all three problem area would be to focus on the hand held device segment. South Korea is one of the fastest growing countries in terms of hand held device producers. Nvidia has already produced a “computer on a chip” that could be extremely successful in this expanding market. This move would allow them to not only move away from the Taiwanese market, it would allow them to potentially sign contracts with more large manufacturers. Product diversification would also be improved as the platform is not limited to one type of mobile device.

While making efforts in new areas such as hand held device units, Nvidia should also focus on keeping their large market shares in the desktop and mobile GPU markets as they are expected expand rapidly in the coming years.

General Electric (GE) Matrix:

GE Matrix overcomes a number of the disadvantages of the BCG Box. Firstly, market attractiveness replaces market growth as the dimension of industry attractiveness, and includes a broader range of factors other than just the market growth rate. Secondly, competitive strength replaces market share as the dimension by which the competitive position of each SBU is assessed.

As Nvidia does not have any strategic business units (SBU’s), General Electric matrix cannot be implemented.

BCG Matrix:

Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool. It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). In other words, it is a comparative analysis of business potential and the evaluation of environment.

According to this matrix, business could be classified as high or low according to their industry growth rate and relative market share.

Relative Market Share = SBU Sales this year leading competitors sales this year.

Market Growth Rate = Industry sales this year - Industry Sales last year.

BCG Matrix Of Nvidia Visual Technologies

The McKinsey 7S model

The Seven Elements

The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

Hard Elements Soft Elements

Strategy

Structure

Shared Values

Skills

Stars:

GeForce 8400 GSGeForce 7800 GTXGeForce 8600 GSTegra 23D vision notebook Quadro Plex 6000

Question Marks:

GeForce GTX 460 SEGeForce GT 545 DDR3GeForce GTX 560 Ti OEM3D vision bundleTegra APX Quadro Plex 7000

Cash Cows:

GeForce 8800 GTS 112 (G80)GeForce 9500 GTGeForce 9800 GTX+GeForce GT 230 v.2Quadro 2000

Dogs:

GeForce 6800 UltraGeForce PCX 5950GeForce FX 5800GeForce4 MX 440SEQuadro Fx380

Systems Style

Staff

"Hard" elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.

The way the model is presented in Figure 1 below depicts the interdependency of the elements and indicates how a change in one affects all the others.

Let's look at each of the elements specifically:

Strategy: the plan devised to maintain and build competitive advantage over the competition.

Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to get the job

done.

Shared Values: called "super ordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the company.

Functional Strategy:

Every business unit develops functional strategies for each major department such as:

• MARKETING STRATEGY• FINANCIAL STRATEGY• HUMAN RESOURCES STRATEGY• OPERATIONS STRATEGY

1)Marketing Strategy:

Nvidia inculcates Marketing strategy which includes components such as:

Strategy based on marketing dominance

Nvidia is the leader in the graphic making company. Nvidia Geforce 256 (NV10) was the first computer graphic card which had features like hardware transform, lighting and shading. Even though these video graphic cards had the above features, the basic purpose for which these were made, for 3D games, came to be utilized much later. The impact of the Nvidia Geforce cards was so much that computer gaming companies started designing games keeping in mind the features that Nvidia Geforce graphics cards provided. Up until now, there have been ten generations of the design. Every upgrade was better in some aspect or the other when compared to the previous one. The rivalry between Nvidia GeForce and ATI Radeon pushed Nvidia Geforce to strive for excellence .It’s Challengers & followers

include Intel, AMD and Qualcomm. Strategy based on marketing are placed into three categories: Leader, Challenger, and follower

Innovation Strategies

As the world's first mobile super chip, NVIDIA® Tegra™ 2 brings extreme multitasking with the first mobile dual-core CPU, the best mobile Web experience with up to two times faster browsing, hardware accelerated Flash, and console-quality gaming with an ultra-low power (ULP) NVIDIA® GeForce®GPU. Get never-before-seen experiences on a mobile device with NVIDIA Tegra. Nvidia Tegra2 is pioneer in the mobile super chip & company has many Close & late followers like Exynos, Qualcomm snapdragon,Intel Atom.Innovative marketing strategies are placed into three categories: pioneers, early followers, and late followers.

2)Finance Strategy:

Nvidia inculcates finance strategy which includes components such as:

Mobilisation of funds-It means to move the available money or funds in to another business or in to some other products .

Working capital- Working capital is a financial metric which represents operating liquidity available to a business or to a organization. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Net working capital is calculated as current assets minus current liabilities.

3)Human Resource Strategy:

Nvidia undertakes numerous policies for human resource management:

Recruitment and training policies –Recruitment means select right candidate at right place. Usually a professional trainer (or sometimes an experienced employee) serves as the course instructor using hands-on training often supported by formal classroom training

Promotion policies Compensation policies

4)Operation Strategy:

Nvidia undergoes and applies various operation strategies such as:

Production capacity Size & location of plant Technology Quality of production Research & development Modernisation

Grand Strategy:

Definition :- Comprehensive, long-term plan of essential actions by which a firm plans to achieve its major objectives. Key factors of this strategy may include market, product, and/or organizational development through acquisition, divestiture, diversification, joint ventures, or strategic alliances.

Stability Strategy:

Under stability strategy Nvidia follows Sustainable Growth Strategy.Which shows how fast a company can grow using internally generated assets without issuing additional debt or equity

Growth / Expansion Strategy:

Internal Growth:

Under intensification strategy Nvidia undergoes product development policy. Under diversification strategy Nvidia follows Concentric diversification Which means to add new but related product/services.

E.g Nvidia launches different kinds of Graphic card with various Modal Numbers, like GeForce 8400 GS, GeForce 7800 GTX, GeForce 8600 GS,Etc.

External growth:

In May 2011, it was announced that Nvidia had agreed to acquire Icera, a baseband chip making

company in the UK, for $367 million in cash.

Conclusion:

Nvidia in my opinion is the World’s best Leading Graphic Visual Company. NVIDIA business

operations’ includes our international offices and data center facilities. it provide employees with an

online community where they can post ideas for any of its business areas and the committee reviews them

bi-weekly and implements the best ideas that provide a cost savings and environmental benefit for the

company and planet. company also hold quarterly “green bag” events to create awareness about the issues

They would like to tackle as well as brainstorm potential solutions for these issues. Environmental

Management System (EMS) and Environmental Health and Safety (EHS) programs are the backbone of

business operations. They dictate how we create a safe and healthy environment for employees and how

we run our offices with as little environmental impact as possible.