ST Microelectronics – partnering for profit
Tang, Hung Kei
Date of Issue2001
College of Business (Nanyang Business School)
Asian Business Case Centre
The semiconductor industry was experiencing intense competition which had led to sustained downward pressure on prices and profit margins across many product categories. In the face of these pressures, ST Micro-electronics (formerly SGS-Thomson) had shifted its product mix towards higher value-added items. This in turn, was beginning to affect the company's relationship with its distributors. To facilitate the shift in product focus, ST Microelectronics had developed a Roadmap business planning tool. The company hoped that by negotiating the targets and actions steps contained in the Roadmap with its distributors, it could build a common mindset with them. But first, the company would have to convince its distributors in adopting Roadmap as a planning tool.
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