Article of the Day... Qualcomm Looking Good

This article is taken from ttnews.com.  Qualcomm's fiscal year quarter 4 covers the dates from June 27th to Septermber 27th...

Qualcomm Reports Higher Profits for 4Q, Year

Qualcomm Inc. said its fiscal fourth-quarter net income rose 22% to $1.06 billion, or 62 cents per share, from $865 million, or 53 cents, a year ago.

Revenue increased 39% to $4.12 billion for the quarter ended Sept. 25, the maker of trucking communication devices and wireless chips said in a statement.

The company said it shipped 127 million units of its CDMA-based mobile station modem devices in the quarter, with sales rising 38% to $39 billion.

In the same period last year it shipped 111 million of units and generated sales of $28 million on the mobile station devices.

CDMA, or code division multiple access, allows several users to share a communications channel, or bandwidth.

For fiscal year 2011, Qualcomm said its earnings climbed 31% to $4.26 billion, or $2.52 per share, on revenue of $15 billion, up 36% from the previous year.

CEO Paul Jacobs said the company delivered record revenue, earnings and MSM chipset shipments this year, driven by the popularity of smartphones and continued adoption of 3G technology.

Intel Case

In all industries revolving around technology, it is seemingly impossible for any one company to be "top dog" in their respective fields for anything longer than a decade.  The rate at which significant changes happens is at dizzying pace (as Mr. Moore's Law would point out) and brilliant new products/innovations seem to pop out of any given garage or basement.  Having said that, Intel manage to be top dog for two decades.

You can't talk about Intel's dominance without talking about Andy Grove.  A dick, a "neat freak", a dictator... and a damn good manager.  In an industry where holding idle for even a brief moment can have crucial consequences, Grove kept the pedal to the floor.  "Only the paranoid survive." Grove said, and those on-board with him would buy into his philosophy and keep propelling the company forward.

You want to talk about thinking outside of the box?  Intel got people to think about something inside the box.  At a time when people only cared about the IBM, Compaq or Dell stamp on the outside of their computer "boxes", Intel came out and branded their microprocessors (think "Intel Inside" and that catchy little jingle).  Since their products performance backed up the hype, people started demanding that their PCs have an Intel chip in it.  Who the hell knew an AMD chip was or did... or better yet, didn't do.  Intel was able to be so damn successful because they could talk the talk, and their R&D would develop the products that would walk the walk.

Qualcomm Plays Musical Chairs at the Top

CEO Paul Jacobs is staying put as the leader of the company.  However, Steve Altman will step out of his role as president of the company and into the role of vice chairman of the board.  Altman, who had been president for the past 6 years and an employee of the company for 22 years, will go from handling day-to-day operations to a visionary position.

The president's seat will now be filled by Steve Mollenkopf (been with the company for 17 years), who was also named COO.  Mollenkopf's previously held the position of executive vice president, and this position will be filled by a man named Derek Aberle.

Week 5: "Talk to Chuck."

"An institution is the lengthened shadow of one man."  -Ralph Waldo Emerson

When Mr. Emerson said this back in the 1800's, he truly meant "man"... as in male.  However, in today's world you could add "or woman" to the end of that quote with the proof in women like Indra Nooyi, Ursella Burns, Meg Whitman, Irene Rosenfeld, Andrea Jung and many more important women in today's business world.  With that said, this week's case study is in fact about "one man" and he is Charles Schwab.  He took a small discount securities brokerage company and turned it into one of the most successful securities brokerage and financial firms.  

I truly admire cases like this because it's one of those good old underdog stories.  You got a small company with limited capital and resources, and they somehow come out ahead of the national full-line brokers by shaking up the industry.  This was only possible because Chuck was able to stick to his pricing strategy and leverage the emerging technologies at the time to change the way people traded stocks.  In order for companies to be successful with a pricing strategy, it is crucially important for them to manage their costs.  In this case, Schwab did an excellent job in flexing the size of his workforce in order to meet the demands of the market and keep the company's employment costs low.

Harley-Davidson Case Study Notes

BUS 475: Week 4

Tuesday's class analyzed the case study of Harley-Davidson.  This is a company with over 100 years of history, but the case concerned itself more with Harley's past three decade. In 1981, 13 executives in the Harley-Davidson division of AMF bought out the failing division with $1 million of their own money and $80 million of high-interest leverage from Citigroup Bank.

Thursday's class was a lecture on the four key aspects of functional-level strategies:  efficiency, quality, innovation and customer responsiveness.  It's important to point out that even though these are the "four key aspects", a company should not spread itself too thin and try to perfect itself in each aspect... one or two of these aspects, inline with a firms core competencies, will yield the best results for a company.

* I will try to post my notes on the Harley-Davidson case study.  

BUS 475: Week 3

On Tuesday we went over the Wynn Resorts case study.  We analyzed what makes Wynn Resorts so successful.  They're strategy of differentiating their hotels from the competition, in Las Vegas and Macau, is a key in the company being so profitable.  They target the "whales" by establishing a luxury brand through their upscale design/architecture and their product layering, providing luxury rooms, top notch spas, Ferrari and Lambo dealerships, and tour-quality golf courses at their locations.  A couple of the main threats that face Wynn Resorts are: 1)  What do they do when Steve Wynn steps down?  What is their succession plan for when the most important person in the company steps out?  2)  The future growth and profitability of their Macau location looks promising, but high political risk may impede upon that growth or even worse, force them to leave the location. Mr. Wynn has very important chess pieces throughout his BOD, and those members are arguably the companies greatest resources (outside of Steve Wynn) as the company looks to continue its expansion and growth.

On Thursday we covered a lecture going over "internal analysis"... covering the factors/concepts that can contribute to either a company's strength or a company's weakness; and how a company can create and sustain a competitive advantage.