Saturday, May 9, 2009

How the Unglamorous Operations Department Can Impact a Company's Business Strategy

Since Apple acquired P.A. Semiconductor last year, there has been huge speculation about Apple getting back into the semiconductor business. And recently there have been Apple job postings looking for experienced semiconductor engineers.

Is this deja vu from the early 1990's Apple-IBM-Motorola PowerPC alliance? Back then, I believe it was more about building a competitive alternative to the Wintel monopoly. But since Apple hopped in bed with Intel a few years ago -- surprising many -- why would it get back into making its own chips themselves now?

It's even more surprising when most tech companies today have dissolved the vertical integration strategy, choosing to outsource this operations capability.

This is more about Apple and the super secretive Steve Jobs and his concerns about subcontractors or contract manufacturers leaking news of future products. Is Steve paranoid?

Maybe not. In fact, just a few days ago, news broke that Dell is looking into developing an Android-based netbook. Was the rumor leaked by a blogger? Were confidential documents stolen and disclosed publicly? No.

A small Bellevue, WA, company called Bsquare, in a press release Wednesday, announced it had developed a way to use Adobe video software on Dell netbooks running Google’s Android platform. I'd link to it but Bsquare subsequently announced it was “issued in error” as did a spokesperson for Dell. You can bet someone got torn a new one at Bsquare on Wednesday!

So, as you can see, even operations strategy like this can impact a company’s business strategy…especially in the highly competitive, sometimes hit-driven, tech industry!


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