ARM Strengths And Weaknesses

717 Words3 Pages
What are the strengths and weaknesses of ARM’s business and partnership model? ARM’s biggest strength is the close relationship with their partners which provides them with early indications of future trends and allowing them to control the supply and design of products due to their early position in the value chain. However, the biggest weakness is that this partnerships are costly to maintain, difficult to scale and not easily transferable. The success of ARM’s business model is based on the relationships with OEMs and semiconductors. Due to the close reciprocal relationship with OEMs they get valuable insights into their technology and early indications of future trends. By designing processors and chips that fit their requirements, ARM makes itself indispensable. Semiconductors have to work with ARM designs in order to get contracts from big OEMs such as Nokia or Samsung. The strength of this business model relies heavily on knowing what the end customer (OEM) needs, but being at the beginning of the production process. Thereby ARM can control and steer the market (pull-push approach). Nevertheless, ARM respects the interests of the semiconductors and does not interfere with their business. They know exactly which segment to target and do not try to outcompete the main processor of the semiconductor’s product range, knowing that for many this is their differentiation point. ARM focusses on the chip-set, the “workhorses”, which will always be needed. Even though some OEMs
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